Food companies to gain as monsoon, drought maul farms

By Swati Pandey & Rajendra Jadhav

MUMBAI (Reuters) - Ironically, in a year spotty rains and drought across 278 of India's 626 districts cuts output and pushes up food prices in the world's second fastest growing major economy, food companies stand to profit the maximum.

Sugar firms, grain suppliers, breweries and diversified agri businesses will see their fortunes rising in FY10 as prices of key commodities soar, analysts said.

Brokerages have upgraded FY10 profit estimates for sugar firms, Tata Tea, rice producer Lakshmi Energy and Foods and the diversified Jain Irrigation Systems, among others.

"Realisations will definitely rise due to higher commodity prices," Ajay Parmar, head of research at Emkay Share and Stock Brokers said. "If prices are higher, earnings per unit will grow too."

For graphics on companies' performance, click here and here

CAKES AND ALE, ALL THE WAY