The current market position indicates a lot of situations and perceptions for the future. The current bull run and market touching new highs is phenomenal. But in such times the most difficult question is where to invest the money. The reason is every share seems overpriced in this bull run and 16000 points of Nifty50. Thus in such situations one should never look at the Nifty50 as it is just a derivation from the best 50 companies in India. Rather the real focus should be on the future of the country and businesses. This would be the reason for real development of the nation. Such business segments would boost the economy or at least keep the nation’s growth stable. Hence One should always look at the future opportunities.
The real stressed sectors in current times are not oil businesses or ports business. Neither the power nor the agriculture sector or pharma sector has suffered much. Even the auto segment, steel and iron industry has suffered as much. The real suffering happened for Hospitality and Hotel Industry, Travelling and Tourism Industry.
Dine outs and restaurants have suffered from many major crises. Recently the news regarding Hyatt Group of Hotels closing its Mumbai branch has hit the market. This is an example of how stressed the entire sector is. Also in traveling the specific hits for the Aviation industry The reason is low customer rate and ban on international Travelling. Hence the pick should be on these industries.
Why Pick up The Stressed Sectors ?
The real reason is not that the industry is stressed and under pressure. The main reason is the nature of Indian Public and their characteristics. There is no hiding from the fact how much Indians are fond of restaurant foods and travelling and entertainment. The Indians though cannot afford the luxury of international trips but they definitely look forward to spending every weekend or holidays at new locations and exploring places. This is the real reason for picking up these industries.
Also Indians cannot stay into their homes forever. Hence once the vaccination drives gear up, there would be no resorts empty and no flights with less than 70% occupancy. These investment tactics are never going to offer a return in a short time. Rather the time frame set for such investments is 2 years at maximum levels. The obvious reason is the company’s time in getting up from the debt ridden patterns of their balance sheet or as we say getting back on track. Hence the COVID situation may have impacted the current working but there is high possibility for future growth in these sectors. The probability for better returns becomes obvious in the long run.
Segment Wise Stock Selection
There are various stocks available under every segment. In such situations one should always prefer the ones that are known for their strong liquidity position or high asset valuation. This would give such companies the benefit of more business opportunities than current times. The impact of this would be directly noticed in the balance sheets over 2 years. Hence boating the EPS of the shares from current levels.
The best company in India for current times is Interglobe Aviation. One can also look towards Spicejet given its low cost seats. The reason to pick up these companies is because of their low fares. In the case of Interglobe Aviation there is a high class facility of seating also available. Hence these should be the ideal pick in this segment given their high number of domestic flights and International Tie-ups.
The people in India love to visit adventure parks. The reason is simple, it gives them a break from their daily boring life. The stocks of this segment have been under pressure of low sales and loss in Balance sheets. Though they have recovered from their lows but in coming times they have high chances of quick growth and development. Some highly trusted companies in this segment are Wonderla, Nicco Parks and Imagica.
When coming to the COVID situation no one can bear the hospitality and Hotel Segment. This sector accounts for its maximum revenue from people travelling across various famous destinations and locations. Also a part of their income comes from the salesman or managerial level employees performing a tour on behalf of the company. Thus these companies also have high growth potential once the situation gets better than current times. The stocks under this segment are Westlife Dev, Lemon Tree, Taj GVK and Indian Hotel Company Ltd.
The theatres haven’t been doing any well given the ban on their working in every phase. Also once they started functioning there was a strict eye on the occupancy that is allowed. Hence such stocks can be heaven stocks for the investors in current times. Even if they are at their border lines for breakout but there can be high inflow of volume in them once the lockdown gets lifted up. So without any delay one should look up such stocks. The major players in this segment are PVR and INOX Leisure.
Never invest without studying factors like company potential and risk capacity available in your potential. Hence analyse these companies and choose your fit for investment. Again the returns can take more time than 2 to 3 years given the high debts on such companies.