• Analysts say FMCG, automaker and apparel company stocks are expected to see strong demand.
• Raksha Bandhan, Ganesh Chaturthi, Navratri, Diwali, Dussehra are considered auspicious for buying valuable items such as cars, housing or even going shopping for clothes, watches, electronics etc.
• Also, India’s consumption history appears to be strong, although inflation could hurt household budgets.

The holiday season, which begins in August and lasts through December, puts a spotlight on stocks of companies whose products and services are in high demand during this time.

The festivals of Raksha Bandhan, Ganesh Chaturthi, Navratri, Diwali, Dussehra are considered auspicious for buying valuable items such as cars and housing. Also, in this season, people tend to go on shopping sprees to buy clothes, watches, electronics, etc.

Analysts say FMCG stocks are the best performers during the season, led by demand for candy, chocolate and snacks.

“The holiday season is upon us and some stocks in sectors like FMCG, autos and banks could see some good action due to increased demand during these times. Recently, despite inflation concerns, there has been record growth in auto sales with long waits. Some stocks to look out for could be Tata Motors, Mahindra and Mahindra, Titan and other banking stocks,” Manoj Dalmia, founder and director of Proficient Equities, told Business Insider India.

And there are weddings too
Along with festival season comes wedding season, and that’s only going to drive demand even further – and make the shopping season last longer. “FMCG stocks tend to do well over the holiday season, with stocks like DMart, Shoppers Stop taking the spotlight. Aside from the festive season, it’s also the wedding season so stocks like Manyavar, Raymond, those stocks would be in focus again because of the shopping spree,” Kranthi Bathini, director of equity strategy at WealthMills Securities, told Business Insider India.

In addition, India’s consumption history appears to be strong, even if inflation could hurt household budgets. Consumers, experts say, are not yet skimping on discretionary items like skincare and cosmetics.

In a recent interview with Nykaa CEO Achint Nayar, he said that despite inflation, consumers are not skimping on small luxuries. In the premium category in particular, there have been fewer consumers who are different from FMCGs in recent months.

Morgan Stanley also supported India’s consumption story, saying in a recent report that consumption will pick up in the coming quarters as the economy is now fully reopened and supported by job creation and income growth.

It said India’s fiscal balance sheets are healthy and a benign macro backdrop will keep consumer confidence high.

“India’s consumption story is not a story of a day or a season, it will be a very vivid story in the coming days as people’s disposable income increases. Also, despite the rise in interest rates, real estate is picking up as people tend to book during the holiday season,” added Bathini.

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