sector review

Affordable housing finance companies (AHFC): Small caps with big valuations

While we generally look at lenders by their book size (advances) and network, the market has a different take when it comes to valuation and that has a significant impact on shareholder returns. AHFCs have become the market darlings in recent times over their conventional, broad based home lending counterparts, as reflected in their market valuations. So, what makes AHFCs market favourites? 

Consumer durables: On the comeback trail

Consumer durables is a category that stands between staples and lifestyle goods. This category has been hit on one hand by Covid-led lockdowns, and on the other by inflation eating into margins and hurting demand. The category has seen a more severe impact as it is neither buoyed by the non-discretionary nature of staples nor by the quick demand rebound that lifestyle consumption tends to see.

FMCG sector: Pressures mount on earnings and valuations

When markets are in a correcting mode, one sector that jumps to mind for its ‘defensive’ qualities is the FMCG sector. With their staple business, non-discretionary spending holds revenues in good stead. But FMCG companies have instead corrected about 20% from their October ’21 peak. Against the Nifty 50, they have been underperformers over the past two years. So, what gives?

Result update: 2 reasons why IT stocks are correcting and what to do

A year ago, when we did the result review of the IT stocks after the Q4FY21 earnings, the sector was moving to a new orbit on the back of robust growth prospects.
The Covid-19 pandemic increased the urgency of digital transformation for enterprises across the globe, and this paved the way for the IT sector to emerge as a strong growth story. Since we wrote about this last year, the sector has delivered stellar earnings performance during and post pandemic.

Cement Industry: 5 things to know before you choose a stock

India’s cement industry has always been a good proxy for the core economy, with steady volume growth and players enjoying considerable pricing power unlike other commodities. With cement industry leaders such as UltraTech Cement, Ambuja Cements, Dalmia Bharat and Birla Corporation correcting between 10% and 20% in the last 3 months, could there be an opportunity? We take a deep dive into the cement industry to assess its prospects.

Sector analysis: What’s changing in the textile sector?

A long-forgotten sector that has made a big comeback in the most recent leg of India’s bull market is the textile sector. The rally was pretty hard to miss. The stock price of KPR Mills has more than doubled from July 2021 to January 2022 while Vardhman Textiles and Welspun surged over 60%. AK Spintex, a textile stock that has flown under the radar for a while, climbed nearly 190% in just the first two weeks of the new year, leaving many baffled. One-year stock returns have been in excess of 100% for many players. Here are the absolute stock returns on a few textile stocks.

Steel Stocks – Hot and Shining!

For the first quarter of FY-22 listed steel stocks have generated profits that are already three-fourth that of the full year ending FY-21. The sector has thus stood out for its June quarter earnings, the 2nd wave of Covid lockdown and drop in consumption notwithstanding. Higher prices and export opportunities buttressed earnings despite a drop in domestic sales. 

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