The unlock trade or the entire space of leisure, travel and hospitality is likely to do well now, says Siddhartha Khemka, Head of Retail Research, MOFSL.
The exhibition stocks are on fire. The first day collections for RRR seems to be very strong. The opening weekend could garner Rs 300-500 crore is what they are talking about. Are you looking at some of these stocks?
I think there is definitely a case to look at these multiplexes, the movie theatre companies, especially after the government has removed most of the Covid restrictions. The only restriction is that people should wear masks in public places, which is a big positive.
On the back of that, we have a spate of big movies slated for release. There is a sleeper blockbuster – The Kashmir Files – but the larger ones like RRR now and the KGF-2 is coming in a few days. And to add to it, the IPL season is also kicking off and that will add on to the overall bookings for the multiplex theatres. So, definitely we are looking at this space very positively.
Not only that, some of the other travel, tourism and leisure companies like Indian Hotels, Mahindra Holidays are talking about how occupancies as well as the average room rates have reached pre Covid levels. That goes on to say how much more people are travelling, going out and spending on these places.
One can add to it the companies like Delta Corp as well as the list of multiplexes. So, this entire space of leisure, travel and hospitality is likely to do well.
What is the outlook when it comes to the entire capital goods space? What within the capital goods space stands out according to you?
Post this sharp run up in crude oil, a lot of countries and companies would be looking at how to generate electricity from alternate sources. There is hydro, solar, wind and then there are other alternate sources like hydrogen. So renewables will be a lot in focus and in the capital goods space, even for L&T, a lot of their core business comes from the hydrocarbon business which will get impacted.
But if one looks at the other businesses, they are going to benefit a lot from the increased focus. Overall, there would be a steady demand for the capital goods companies going forward and specifically if you look at companies which are developing new age and alternate fuel technologies.
So apart from the usual L&T, Cummins and Siemens, I think Praj, which is working on the ethanol space will also be in focus within the broader capital goods space.
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