Stock ideas from new sectors: Of the two pillars of the ‘India’ story, ‘consumption’-related sectors have lagged capex-driven ones in the past couple of years.
Strong resurgence in urban income is now a proven fact and better agricultural growth this year will likely drive rural spending. This may trigger new investor interest in domestic and “consumption”-related themes this year. But playing this theme through the usual routes — FMCGs, MNC pharmaceuticals or retail — may not be the best way to go.
Equity broking firms, financial services companies and banks may be a good proxy to piggyback on the swelling appetite for consumer goods and all forms of investment. The long line-up of foreign players waiting to enter insurance/asset management will continue to drive deal-making and thus, better valuations for recently listed financial services firms. Media stocks, which are catching up recently, remain good picks for investors who seek growth, albeit at a high price. Realty companies, both national and regional, may witness further re-rating as interest rates cool off, and new investment vehicles such as REITs redirect funds into this sector.
Strong resurgence in urban income is now a proven fact and better agricultural growth this year will likely drive rural spending. This may trigger new investor interest in domestic and “consumption”-related themes this year. But playing this theme through the usual routes — FMCGs, MNC pharmaceuticals or retail — may not be the best way to go.
Equity broking firms, financial services companies and banks may be a good proxy to piggyback on the swelling appetite for consumer goods and all forms of investment. The long line-up of foreign players waiting to enter insurance/asset management will continue to drive deal-making and thus, better valuations for recently listed financial services firms. Media stocks, which are catching up recently, remain good picks for investors who seek growth, albeit at a high price. Realty companies, both national and regional, may witness further re-rating as interest rates cool off, and new investment vehicles such as REITs redirect funds into this sector.
For investors looking for value picks that will contain downside risk, pockets of ‘value’ remain in PSU banks, smaller housing finance companies, automobile components (companies with a diversified product profile and those focussed on passenger car OEMs) and select capital-goods makers.
Robust rural growth and spiralling farm goods prices may throw up ‘dark horse’ opportunities from sectors that have been moribund: fertilisers, crop protection and seeds.
Robust rural growth and spiralling farm goods prices may throw up ‘dark horse’ opportunities from sectors that have been moribund: fertilisers, crop protection and seeds.
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