The Indian festival season begins with Ganesh Chaturthi and continues in full swing in the following months with Navratri, Karva Chauth, Dussehra, Diwali, Eid, Christmas and more. Amidst this festive season, there is a surge in demand for consumer products.
Various events during this season act as catalysts which trigger renewed excitement in the air, the marketer’s cash in on the excitement through the Big Festival Sale or the Great Indian Festival offers etc.
As we go through this season, we realize that festivals bring us back to a state of excitement, spreading good vibes and giving us a break from our daily routines. This creates an environment that’s good for creating consumer product demand. The spirit of celebration was maimed and muted in the past two years due to the intermittent COVID-19 disruptions, but this year the excitement seems to be reinvigorated along with a momentum pick up in economic activities, all thanks to the large-scale inoculation drive undertaken by the government (which just reached a milestone of 213Cr, by September 04th, 2022).
Catalysts that Trigger the Festive excitement and Economic Boost include:
- The Indian economy’s resilience in FY23 with all the major indicators in green.
- Improvements in urban and rural demand Normal monsoons restored rural areas’ confidence in demand recovery.
- Post covid contact intensive service sectors, including Travel & Tourism, Hotels, Schools etc., are now fully operational along with all modes of public transport and travel, thus supporting the recovery of economic activities.
- Remittances that significantly contribute to rural income are returning to pre-COVID levels with the pickup in the services sectors.
- Trade boost in the festive season has given a lot of hope to the stock traders as well. Many brokers, financial analysts have been observing the season closely and with that as the basis, our team has compiled a few stocks that are believed to be in a better position and will benefit from the economic recovery due to festival season and other economic developments around us.
1. Maruti Suzuki
On the NSE, Maruti Suzuki is trading at a price of ₹ 8,692.25 as of October 4th, 2022. The market cap of the company is around ₹2,70,231.76 crore.
Maruti Suzuki shares have risen by 30% in the last year alone. The shares were around ₹ 6,801 on the 9th of September last year. In the June quarter of 2022, the company posted a net profit of ₹ 1012 crore, an increase of 129.76% over ₹ 441 in the corresponding quarter of the previous year.
2. Bajaj Finance
The NBFC was trading at ₹ 7,412.50 on the NSE as of October 4th, 2022.
Bajaj Finance shares have had a roller coaster ride throughout the year, even though the performance is slightly lower by about 3% compared to last year’s. Still, the recovery has been about 22% over the previous three months.
Bajaj Finance witnessed a strong June 2022 (Q1FY23) quarter, with a net profit of 159% in the green of ₹2,596 crores as compared to ₹ 1,002 crores in the corresponding quarter of the previous year. During Q1FY23, new loans booked jumped 60% to 7.42 million from 4.63 million in Q1FY22. Net interest income also jumped by 48% to ₹ 6,638 crores from ₹ 4,489 crores in Q1FY22.
On the NSE, Trent was trading at ₹ 1,424.05 as of October 4th, 2022, the afternoon marginally up by 2.5% from the previous trading day. The company has a market cap of about ₹ 50,486 crores.
Within a year, Trent’s shares have jumped about 35%. In Q1FY23, the company registered a consolidated net profit of ₹114.93 crores against a loss of ₹138.29 in the corresponding quarter last year. The revenue earned from operations stood at ₹1,803.15 crore – significantly up from ₹491.99 crores in Q1FY22.
4. Relaxo Footwear
The popular footwear brand was trading on the NSE at a price of ₹1022 as of October 4th, 2022, closing with a fractional increase of about 0.8%. Relaxo has a market cap of ₹ 25,436 crores. In the last three months, the shares have gained about 3%.
During Q1FY23, the company posted a net profit of ₹38.67 crores against ₹30,96 crores in Q1FY22. Operational revenue grew from ₹497.13 crores in Q1FY22 to ₹667.15 crores in Q1FY23.
5. SBI Cards and Payment Services
On The National Stock Exchange, SBI Card shares closed at ₹890 as of October 4th,2022, closing, Slightly up from the previous closing. The NBFC has a total market cap of around ₹ 84,386 Crores.
Even though the stock dabbled in the red in the past year, losing about 15% in that time. The stock made a robust recovery, picking up over 22% this year.
During Q1FY23, SBI Card registered a growth of about 105.80% in the net profits from ₹ 304.61 crores in Q1FY22 to ₹616.91. The revenue from operations stood at ₹3100 crores during the quarter under review, taking a jump of 31% YoY and 9% QoQ. The interest income climbed by 20% YoY and 10%QoQ at ₹1,387 crores. SBI cards can be potentially rewarding this festive season.
Because of the increase in people’s disposable income, the Indian consumption story is going to be much more buoyant in the coming days, despite the rising interest rates, global trade deficits, and inflation. Festival vibes are supporting the growth. We can always invest and participate in the growth of the markets during these exciting festivals to potentially bring Ma Lakshmi to our home through equity investments – direct or private.
Investing in various instruments such as listed stocks, unlisted shares, and corporate FDs during the period of economic growth will not only diversify your portfolio but will also help you achieve your financial goals in an efficient manner.
RURASH is one of India’s investment management firms, providing financial solutions to augment the client’s wealth and facilitate building a legacy.