Festivals ring in big-time spends

Tags: News

Auto, paint, housing, media stocks in demand

Festivals ring in big-time spends
With the festival season set to kick in, stock market analysts are picking up early signs of recovery in discretionary spending. They believe investors can safely pick up stocks from select consumer discretionary counters ranging from automobiles to retail, paint, jewellery and media.

The festival season has already started in Kerala. From September, several regional/national festivals will start. Data show car sales are rebounding after months of lacklustre performance. While rural gold demand might peter out due to a weak monsoon, overall jewellery demand could rise ahead of Diwali. The anticipated pickup in the economy is also likely to boost ad spending, generating higher revenues for media companies.

Market watchers believe home sales and consumer goods purchases would show stronger gains on account of better job prospects, higher household incomes and rising optimism about India’s economic prospects. This will further increase demand in the consumer discretionary sector.

Debopam Chaudhuri, chief economist at ZyFin Research, said, “This is the first time since 2012 that we have observed such a sharp increase in sentiment indices. This is encouraging sign since 55 per cent of the Indian real economy is driven by private spending. This should be reflected in actual sales over the next four to six months.”

Dipen Shah, head of research at Kotak Securities, expects automobile and paints sectors to see a revival. He is positive on both sectors.

A recent global study by Nielsen on consumer confidence and spending intentions ranked the confidence of Indian consumers highest among 60 countries in the June quarter. India was at number 2 in its last reading.

“We are selectively positive on the auto space with a bias for four-wheelers and commercial vehicle firms over two-wheeler makers. We are also positive on paint companies on account of recovery in industrial growth and rising demand for higher value decorative paint segment. We believe the recovery in these two sectors would not be V-shaped, rather U-shaped,” said Dipen Shah, head of reasearch at Kotak Securities.

Full report in FC Invest

EDITORIAL OF THE DAY

  • Public musn’t pay for domestic servants for our diplomats

    Nothing seems to have changed in the year and half since the fur that flew thick and fast over the case of diplomat Debjani Khobragade and her maid Sa

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

Sarthak Raychaudhuri

vice-president, HR, Asia South Whirlpool of India

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

TODAY'S COLUMNS

Urs Schoettli

Economic integration in east Asia

As trade agreements within a global framework have become increasingly ...

Rajgopal Nidamboor

Up the ante of your conscious existence

It sounds cryptic, but is not as complex as it ...

Gautam Gupta

The ‘fake’ issue needs to be taken seriously

E-commerce players are witnessing unbelievable growth globally. Competition is increasing ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture