As India’s festive season kicks off, understand the key sectors you must keep an eye on.
The festive season in India is a vibrant and joyous time that usually begins in early September and continues until the end of December. It kicks off with festivals like Rakshabandhan and Janmashtami, followed by the grand celebration of Ganeshotsav that spreads across the nation. We also have the nine-day festival of Navratri and the festive victory of Dussehra; each celebrated uniquely in different regions. Finally, the much-anticipated festival of Diwali, which people eagerly await throughout the year, marks the grand finale.
This festive season is a significant time for various sectors of the economy. The surge in consumer spending and the overall enthusiasm make it an appealing period for investors to consider specific industries. Now, let’s delve into some of the key sectors that capture the attention of investors during this festive season.
The festive season in India follows the harvest season, which means there is better disposable income, even in rural areas. Festive season sales hold a significant role in shaping companies’ stock performance and the market’s overall mood.
People save up for festive shopping all year round. During this time, there is a surge in demand for various products in India. People buy new clothes, jewellery and household appliances like refrigerators, TVs, and washing machines. Additionally, there is a noticeable increase in the purchase of cars and two-wheelers during this period.
Real estate companies often offer discounts on home purchases, prompting people to invest in homes.
Now, let’s take a closer look at the sectors for which this festive season holds immense importance.
1. Consumer Goods
During festivals, FMCG (Fast-Moving Consumer Goods) and consumer durables companies experience a substantial surge in sales. People purchase items like electronics, appliances, clothing, and home decor for personal use or as gifts.
The Retailers Association of India (RAI) CEO, Kumar Rajagopalan, believes that the upper-middle class and middle class are enthusiastic about spending during festivals, which include premium products in various categories. Sales are estimated to witness strong growth of 10% to 11%.
2. Airline Industry
The last quarter of the year is the busiest for Indian airlines. Thousands of Indians travel to reunite with family and friends during major festivals like Navratri and Diwali.
IndiGo Airlines has exciting news for travellers during India’s festive season. They have introduced several new flights departing from Pune and Bengaluru to meet the growing passenger demand in the upcoming months. Starting September 5th, they have added more flights on the Chennai-Pune route. Additionally, they have launched new routes, including Pune to Vadodara, Mangaluru to Bengaluru, and Bengaluru to Raipur, all on the same day.
According to Ahmedabad Mirror, two international and two domestic airlines are gearing up to launch extra flights departing from Ahmedabad starting in October 2023.
3. Retail Sector
The retail sector experiences tremendous activity during the festive season in India. Retailers offer various discounts and offers to attract buyers, and brands introduce specially designed collections for this occasion. Online shopping also witnessed a significant uptick, as shoppers can conveniently purchase from home through online retail platforms.
4. Automobile Sector
During the festive season, the automobile industry experiences a surge in sales, particularly in two-wheelers and small cars.
To entice customers, many car manufacturers and dealerships roll out special promotions, financing options, and even gifts.
A report from Mint reveals that Indian automobile manufacturers have high hopes for this festive season. This optimism stems from a boost in rural sentiments and a reduction in supply chain challenges. Industry experts predict a substantial increase in sales for both passenger vehicles and two-wheelers this year.
According to the report, passenger vehicle sales may surpass the remarkable milestone of 10 million units for the first time during this festive season.
5. Real Estate
The festive season brings exciting opportunities in the real estate sector as developers offer discounts and enticing incentives to encourage property purchases.
India Today reports that the festive season of 2022 marked the best performance in a decade for the real estate sector.
In 2023, home sales continued to reach all-time highs each quarter. As a result, experts predict that this year may surpass the records set in 2022, making it another exceptional year for the real estate sector.
For investors considering opportunities in these sectors, it is crucial to conduct a thorough analysis. Look closely at market trends, economic conditions, and the companies’ financial stability before making investment decisions.
While the festive season can certainly boost sales and revenue for businesses, it is important to remember that the sustainability and long-term prospects of a company’s growth should be assessed beyond seasonal fluctuations. Don’t rely solely on short-term gains.
Diversification is key to managing risk in your investment portfolio. Don’t put all your money into a single sector or company. Spread your investments across various industries to minimise potential losses. Remember, a well-researched investment strategy is essential for success.
That’s it for today. We hope you’ve found this article informative. Remember to spread the word among your friends. Until we meet again, stay curious!
*The companies mentioned are for information purposes only. This is not an investment advice.