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Unlock beneficiaries: Stage set for structural uptrend
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What’s Buzzing:
The central government as well as state governments are further relaxing the Covid-19 related restrictions that will allow public gatherings, benefitting many businesses that were impacted over two years. Has the price already discounted the same or is there more juice left?
Context:
Businesses across travel, cinema exhibition segments have been adversely impacted over the past couple of years. Companies operating in these sectors, especially hotels, have been underperforming over the past several years dating back even to the pre-Covid period and have undergone significant price/time correction. Many stocks are now breaking out of their multi-year consolidation phase, indicating a structural turnaround. Historically, such breakouts were followed by significant returns to the tune of 30-40% over a few quarters, thus leading to outperformance. These sectors have exhibited relative outperformance in the ongoing corrective phase indicating inherent strength. They are expected to resume their uptrend as soon as anxiety around geopolitical events cools off.
Our Perspective:
Our bottom up statistical models and long term chart structure studies of these sectoral players reveal that these sectors, benefitting from a complete unlock of the economy, are expected to outperform over the medium term and should form part of the portfolio. We remain constructive on companies from hospitality/leisure sector like Easy Trip Planners, Lemon Tree Hotels, Oriental Hotels, Taj GVK Hotels and Resorts, EIH Ltd, VIP Industries, Inox Leisure along with consumption proxies like Phoenix Mills and United Spirits.
Disclaimer – I ICICI Securities Ltd. ( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400 025, India, Tel No : 022 - 6807 7100. I-Sec is acting as a distributor to solicit bond related products. All disputes with respect to the distribution activity, would not have access to Exchange investor redressal forum or Arbitration mechanism. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. Investments in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein mentioned are solely for informational and educational purpose.
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