Even though fear and uncertainty have increased in the market due to the ongoing tension in the world, a part of the Indian stock market is quietly giving good returns. This indicates in which sectors the money of sensible investors is currently going. According to Ace Equity data, at least 45 stocks have performed well in the last one month despite the market decline. This happened as tensions related to Iran increased volatility in crude oil prices, intensified selling by foreign investors and sent major indexes down.
Nifty is currently below the important level of 22,500 and there are indications that it may go up to 22,000-21,700. Despite this, some shares of pharma, energy and industrial sectors are attracting investors.
Shares of electricity and renewable energy sectors have performed best. Shares like Premier Energies, Waaree Energies, Emmvee Photovoltaic Power and ACME Solar have given returns of up to 27% in a month. Adani Power and NTPC Green Energy also remain strong. There are many reasons behind this rise. On the one hand, tensions related to Iran have increased concerns about energy security, driving investors toward domestic companies that are less dependent on imported fuel.
On the other hand, this sector is benefiting from strong long-term plans. India aims to achieve 500 GW non-fossil fuel capacity by 2030. Also, the demand for electricity is also expected to increase continuously, due to which development of infrastructure, data centres, increasing use of electricity and better distribution system.
However, now the situation is changing a bit. Due to increase in electricity production, the gap between demand and supply has reduced, which may put pressure on prices. Now the focus is not just on solar or wind, but on storage and hybrid energy solutions. In this environment, companies like Premier Energies stand out. These companies can grow due to strong domestic demand, government support and better utilization.
Another trend is that commodity related stocks are performing better. Shares like Nalco, Lloyds Metals, Godawari Power and Supreme Petrochem have shown strength. Usually, when tension increases in the world, the supply chain gets affected, due to which commodity prices increase and these companies benefit.
Fluctuations in oil prices affect costs, but metal and industrial companies often compensate for this by increasing prices. Therefore investors are showing interest in these sectors. It is also believed that the commodity sector may remain strong in the coming times due to lack of demand and supply of infrastructure.
Good performance has also been seen in the pharma sector. Companies like Emcure Pharmaceuticals, Aurobindo Pharma, Granules India, Ipca Laboratories and Lupine have consistently given good returns. The special thing about this sector is that it is generally not much affected by market fluctuations. Also, exporting companies benefit from the weakening of the rupee.
India's pharma market is also growing, especially due to increasing demand for treatment of chronic diseases. New treatments such as GLP-1 therapy are also becoming increasingly popular. According to Axis Securities, companies like Lupine and Aurobindo Pharma are in a better position because they have strong products and good business in India as well as America.
Apart from these sectors, infrastructure, logistics and some consumption stocks are also showing strength. IRB Infrastructure and Great Eastern Shipping have gained momentum, which shows growing investment and freight opportunities in the country.
Consumption stocks like Zydus Wellness and Avenue Supermarts are also holding up. This shows that investors are not completely leaving this sector, but are investing in selected companies thoughtfully. Despite the decline in the IT sector, some stocks like Persistent Systems and Affle remain strong.
The financial sector, especially private banks, is still under pressure. Real estate and FMCG sectors have also not performed as per expectations due to weak demand and pressure on profits.
Disclaimer: This article is for information only and should not be considered as investment advice in any way. TV9 Bharatvarsha advises its readers and viewers to consult their financial advisors before taking any money-related decisions.
