Asian Paints, Hindustan Unilever (HUL), Tata Power, Voltas, TVS Motor Company and Indian Hotels are the some of the stocks that have given a negative return during the lockdown period.
“Economic recovery is expected to be slow and prolonged and vary significantly across sectors. Sectoral improvements are expected from Q3FY21 onwards, though reaching the pre-lockdown normal would probably get extended into financial year 2021-22 (FY22),” says Madan Sabnavis, chief economist at CARE Ratings.
That said, analysts remain bullish on the pharma sector despite the run up. The Indian pharma market, they suggest, was already undergoing consolidation, which has got an additional nudge due to the COVID-19 pandemic and expect the bigger companies / brands / distributors are likely to gain market share going ahead.
“The consumption basket can be divided into two parts – essentials and non-essentials. Within the essential basket, the demand for products like personal care may see a dip, while that of food group, pharmaceuticals and telecom services is likely to stay intact. People will postpone purchase of big ticket items such as cars, air conditioners etc. given the pay cuts and job losses. Investors can base their investment decision accordingly and selectively exit the consumption stocks,” says G Chokkalingam, founder and managing director at Equinomics Research.
“We continue to maintain our defensive stance on Indian equities with a preference for sectors linked to agriculture, telecoms, information technology, and certain consumer and utility stocks from a three – six month perspective,” wrote Jitendra Gohil, head of India equity research at Credit Suisse Wealth Management, India in a co-authored note with Premal Kamdar.