Market Outlook
The second lockdown had dampened the businesses as well as consumer sentiments. However, with the gradual easing of COVID restrictions & the vaccination drive, economic activity in India is picking up pace and further upside to growth is expected as the global economy opens gradually. Global institutions such as the World Bank and the International Monetary Fund (IMF) have welcomed India’s gradual climb out of the pandemic slump, while ratings agency Moody’s upgraded India’s outlook from ‘negative’ to ‘stable’.
Normalization of economic activities continued through the month of September. Since the August monetary policy meeting of the RBI, people have become optimistic about spending. The upcoming festive season has also contributed to the release of pent-up demand. The RBI expects economic growth to be around 9.5 % in the current fiscal year. Sustained growth in agriculture, strong rebound in manufacturing industry & resumption of services activities are indicating recovery.
The stock market had a spectacular year on the back of the support from retail investors and domestic institutions. The base of equity investment in the country has also increased with record additions of new Demat accounts. Another encouraging sign is the IPOs. So far, in 2021, over 40 companies have floated their IPOs to raise more than Rs. 70,000 crore. The continuous support from the government to ease the stress of the telecom sector, the production-linked incentives for auto and auto-part manufacturers also helped to lift the mood in the stock market amidst the pessimism.
Market outlook looks promising, our expectations on India’s further journey is backed by:
- Vaccination drive picking up pace
- The government’s focus on capital expenditure and continued reform push
- Large Foreign Direct Investment flows
- With major restrictions lifted, the jobless situation has improved and low risk of unemployment is expected over the years.
- Production Linked Incentive scheme for the manufacturing sector will further increase domestic demand
However, near term risk can come from rising inflation. India still imports the bulk of its crude oil requirement and gas. Any rise in price will have to be passed on to the consumer. Other commodities like natural gas or coal have also spiked due to shortage issues across several countries.
Change in Markets from Last Diwali
| SECTOR | Return |
| Bank Nifty | 41.66% |
| Auto | 37.61% |
| Fin services | 40.08% |
| FMCG | 24.51% |
| IT | 65.11% |
| Media | 54.14% |
| Metal | 112.24% |
| Pharma | 18.96% |
| PSU Bank | 99.95% |
| Pvt Bank | 32.22% |
| Realty | 111.17% |
| INDEX | Return |
| NASDAQ | 29.75% |
| FTSE | 27.42% |
| Nikkei | 12.87% |
| SSE | 8.23% |
| NSE | 42.41% |
| Crude | 97.78% |
| Currency (USDINR) | 0.39% |
Closing price as of 25th October 2021 close. Source: Company, Marwadi Research, Ace Equity, Reuters.
Auspicious moments call for auspicious beginnings. Here’s a list of fundamental picks for your portfolio, as we step into a new Samvat.
Heranba Industries
Heranba Industries Limited is an India-based crop protection chemical manufacturer, exporter and marketing company. It manufactures Synthetic Pyrethroids and its intermediates in India. These are used in insecticides, fungicides and herbicides. Know more
IndusInd Bank
IndusInd Bank is one of the largest private bank in India with loan book size of INR 3.73 lakh crore. Bank focuses predominantly towards vehicle finance, large corporate finance and becoming an active player in the microfinance lending market. Presently, the bank operates a network of 2,015 branches, 2385 microfinance branches, 821 vehicle financing marketing outlets & 2,870 ATMs. Know more
Jyothy Labs
Jyothy Labs is an emerging FMCG player with a pan-India presence and company caters into fabric care (detergent powder and bars), dishwashing (bars and liquid), household insecticides (liquid vaporizer and machine, coil, magic card and incense sticks), personal care and laundry services. Know more
Kansai Nerolac Paints
Kansai Nerolac Paints is the largest industrial paint and third largest decorative paint company in India. The company manufactures a diversified range of products, ranging from decorative paints coatings for homes, offices, hospitals, and hotels to sophisticated industrial coatings for most of the industries. Know more
Tata Motors
Tata Motors is a leading global automobile manufacturer; it offers a wide and diverse portfolio of cars, sports utility vehicles, trucks, buses and defense vehicles to the world. It is the leader in commercial vehicles in each segment, and among the top three in passenger vehicles with winning products in the compact, midsize car and utility vehicle segments. Know more
United Spirits
United Spirits is the leader in the Indian spirits market, with ~33% volume share. The company manufactures, sells, and distributes a wide portfolio of premium brands such as Johnnie Walker, Black Dog, Black & White, VAT 69, Antiquity, Signature, Royal Challenge, McDowell’s No.1, Smirnoff and Captain Morgan. Know more
Closing price as of 25th October 2021 close. Source: Company, Marwadi Research, Ace Equity, Reuters.
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