Top 3 Stocks to Buy ahead of Upcoming Festive Season
Concern and the attraction of holidays like Diwali are there as the calendar approaches the eagerly anticipated holiday season.
These colourful celebrations foster community and familial bonds while also laying the groundwork for a spike in business activity.
In all of this celebratory mood, a sharp eye can spot a special investment opportunity—the ability to choose the best stocks that are well-positioned to benefit from this impending holiday frenzy.
These five businesses might grow tremendously as a consequence.
1. Khadim: Stepping into Celebration with New Shoes
Khadim, India's second-largest footwear retailer, is gearing up to make its mark this festive season. With a significant presence in East India and a strong footing in South India, Khadim has been steadily growing its market share in the organized footwear market, currently standing at 5%. The company offers a wide range of choices, with 10 brands and 9 sub-brands catering to every price bracket.
Khadim's financials show promise. Although its revenue in the March 2023 quarter experienced only a marginal increase, the net profit for the year surged by an impressive 66% year-on-year. This indicates a solid financial foundation and the potential for further growth.
Khadim has ambitious plans for the future. The company intends to invest between Rs 120-130 billion in capital expenditures for the fiscal year 2024. In the next 2-3 years, they plan to open 100-120 new stores, especially in western and northern markets, focusing on Exclusive Brand Outlets (EBOs), Brand Outlets (BOs), and COCO stores. Additionally, Khadim is actively expanding its presence in e-commerce while enhancing its offline customer touchpoints.
Another interesting aspect of Khadim's strategy is its focus on premiumisation. This includes the introduction of premium-priced shoe ranges and the reframing of their value proposition. This could resonate with consumers looking for high-quality, fashionable footwear options this festive season.
In summary, Khadim appears to be a strong contender to ride the wave of economic activity before the festive season. With its expanding footprint, focus on e-commerce, and premiumisation strategy, this footwear retailer could be a stock to watch out for.
2. Hero MotoCorp: Riding High on Festive Demand
Hero MotoCorp, the world's largest manufacturer of two-wheelers in terms of unit volumes sold by a single company, is gearing up for a resurgence in sales this festive season. The company boasts a portfolio of strong brands, including Splendor, Passion, Glamour in the bike segment, and Pleasure and Maestro in the scooter segment.
Festive Season Demand:
The festive season typically ushers in a surge in demand for two-wheelers, particularly in rural areas. As the pandemic subdued festive demand in previous years, Hero MotoCorp is poised to make a comeback and capitalize on the expected rebound in sales.
3. Aditya Birla Fashion & Retail
Given that buying new garments is traditional over the Christmas season, the stock is the ideal benefactor.
After the Aditya Birla Group's branded clothing businesses—which included ABNL's Madura Fashion division and its subsidiaries Pantaloons Fashion and Retail (PFRL) and Madura Fashion & Lifestyle (MFL)—consolidated in 2015, the firm was created.
Madura Fashions, the firm that owns many brands like Louis Philippe, Van Heusen, Allen Solly, and Peter England, provides 60% of the company's revenue.
This section also oversees its portfolio of overseas brands, which includes The Collective and a few more carefully chosen names including American Eagle, Ted Baker, and Ralph Lauren.
In conclusion, Hero MotoCorp's strong market presence and diverse product range make it a potential star performer during the festive season. As consumers gear up for celebrations and shopping, demand for two-wheelers is likely to rise, and Hero MotoCorp could be well-positioned to meet this demand.
As we approach the festive season in India, both Khadim and ABFR present compelling investment opportunities. Khadim's expansion plans, focus on e-commerce, and premiumisation strategy make it a strong contender in the footwear market. Meanwhile, Hero MotoCorp, with its dominant position in the two-wheeler market, is ready to take advantage of the anticipated surge in demand during this joyous season. Investing in these stocks could be a smart move for those looking to capitalize on the festivities while potentially reaping the rewards of economic activity.
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- Dec 08, 2023Read More