Stocks to Buy Today: Vaccine Winners: Stocks Benefiting India’s Rapid Inoculation Campaign
With nearly 44% of citizens receiving one dose of the COVID-19 vaccine and 15% receiving both doses, there is growing confidence that the country will be able to contain the third wave of the pandemic as it unfolds. His arrival.
The increased vaccination rate has therefore also given investors confidence in reopening trade in the economy as contact-intensive sectors such as travel and tourism and retailing steadily come back to life. It has also been facilitated by the fact that states are gradually relaxing restrictions on mobility.
Against this background, here are some actions that analysts say could benefit from the easing of the pandemic’s grip on economic life:
The largest airline in the country prides itself on being in pole position to benefit from the return of travelers. Air passenger traffic soared 34 percent in one month in August, prompting the government to increase domestic flight capacity to 85 percent of pre-pandemic level, from 72.5 percent earlier .
Brokerage firm Kotak Institutional Equities recently noted that InterGlobe has been able to gain market share due to balance sheet issues at rivals without requiring much equity infusion. Indigo Airlines saw its market share gains jump to 59% in July, up from 48% before COVID-19.
“It did better than its peers in terms of load factors during the first half of August 2021 and would benefit more from the flexibility of fares for trips booked 30 days or more in advance,” Kotak Equities said. .
It is relevant to note that on Monday, when the losses were spread across sectors, Indian Hotels finished at the top of the Nifty500 index with gains of 8%. The stock has risen 16% over the past month as the travel and tourism sector appears to pick up where it left off before the advent of the second wave.
During the quarter ended in June, earnings at Indian Hotels were impressively resilient despite the second wave. Brokerage firm Motilal Oswal Financial Services was impressed with the resilience and raised its guidance for the company’s revenue and operating profit by 2% and 4%, respectively.
The owner of the mall has been another story of resistance during the pandemic. With the rise in vaccinations raising hopes of greater footfall in shopping malls, analysts believe the long-term history of Class A shopping center owners like Phoenix Mills remains intact.
In addition, the mall operator has managed to amass a war chest of nearly Rs. 3,000 crore, which could help him explore opportunities for inorganic growth in the future given the struggling valuations of companies. shopping centers across the country. Brokerage firm ICICI Securities believes the company could experience 14% growth in annualized rental income over the next three years, further strengthening its status as one of the largest shopping center operators in the country.
Recently listed Devyani International, operator of Yum Brands quick service restaurants in India, has had a mixed start to life as a listed company. However, with the economy opening up and Indians ready to venture out for their food, analysts are optimistic about the company’s ability to capitalize.
“With increased vaccination and a gradual opening up of the economy, brands are hoping for an increase in footfall in shopping malls and a recovery in restaurants,” said brokerage firm KRChoksey Shares and Securities, which launched coverage of the title last week with a buy note. .
Analysts believe the growing penetration of online delivery for QSRs has been a boon during a pandemic and will continue to drive growth as footfall gradually improves.