Investment Tips: Top 7 sectors to consider during the current scenario

Telecom has been one of the most important services and sectors during the global pandemic. It has been a key enabler in helping government and healthcare authorities in timely communication, tracking the developments and also, implementing work from home and keeping the economy going. 

As demand for bandwidth is expected to go up from existing customers, telecom will likely remain among well-performing sectors.

FMGG - Fast-moving consumer goods

The nationwide lockdown and supply chain challenges created panic among consumers in 2020, especially concerning essential commodities. 

The existing uncertainty around the future of the new pandemic waves may cause an uptick in spending by consumers on essentials which will boost sales of FMCG companies.

• The overall impact on the agricultural sector should be very low. As states have cleared that seeds fall under the essentials category, the impact is likely to be low. 
• Talking about agrochemicals, companies that depend on imports of raw ingredients, as well as exports of finished goods, will likely be impacted.

Aviation was one of the adversely impacted sectors during the first wave of Covid-19 and the situation during the second wave is slowly turning grim as restrictions continue to rise. 

Hence, the days ahead don’t seem to be good for aviation. The same goes for the hospitality sector as well. But hopefully, in the next few months, things are going to be better.

Note: Be careful in this industry.

Banking stocks will be under pressure due to reduced offtake of loans under recessionary market conditions and a cautious customer outlook will impact the profitability of the banks. 

Also, there will be a decline in banking income due to lower cross border trade.

Automobiles are one of the discretionary items and vehicles sales will largely depend on consumer sentiments. 

• During the first wave, the sector witnessed a steep decline in sales except for tractors that continued to experience solid growth. 
• Now, amidst the uncertain situation, consumer sentiments remain weak and the demand for non-essential items is likely to fall further. The recovery of the sector depends on how fast countries can bring the next waves under control.

In times like these, the investors need to stay invested in good companies – the ones with good balance sheets and those run by market leaders because they are least likely to be unable to survive the storm.