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Every year, the festive season shines up with Ganesh Chaturthi, with the crescendo building up through Navratri and Durga Puja, and the finale landing on Dhanteras and Diwali before the wedding season takes over. This is accompanied with higher footfalls, orders, ticket sizes and margins. This year’s festive season comes at a crucial juncture. Following the outbreak of the US-Iran conflict earlier this year, oil prices have seen a skyrocketing rally and spiked inflationary worries. Bajaj Broking in its monthly outlook report highlighted that this has increased input cost pressures and injected fresh uncertainty into corporate and consumer decision-making. Over the last two months, most of the market commentaries pointed towards a stronger consumer demand during the festive season despite implications of the war, the domestic brokerage however noted, adding that consumer companies, retailers, automobile manufacturers and e-commerce platforms are broadly preparing for high single-digit to low double-digit growth in festive demand, supported by urban consumption resilience, easier financial conditions and the continued premiumisation trend across product categories. What’s boosting hopes for a strong festive season? While concerns prevail, urban demand continues to remain resilient. Strong employment conditions in services sectors, healthier household balance sheets and moderating borrowing costs are expected to support discretionary spending, the domestic brokerage said, adding that retail financing, consumer durable loans, vehicle financing and credit card spending typically accelerate during the festive period, amplifying purchasing power. At the same time, aggressive promotional campaigns from retailers and e-commerce platforms are likely to stimulate sales across categories ranging from smartphones and electronics to apparel and home improvement products, it added. “Demand across premium automobiles, smartphones, jewellery, travel, hospitality and branded apparel has consistently outpaced mass-market segments as higher-income consumers remain relatively insulated from inflationary pressures. Market commentaries suggest that nearly 45% of consumers intend to increase festive spending this year, with purchase intentions strongest for jewellery, home appliances and personal gadgets,” Bajaj Broking said. Which sectors will outperform this festive season? Further, it believes e-commerce is also expected to remain a major beneficiary of increased demand during the festive season. India's festive shopping ecosystem has become increasingly digital, with Tier- II and Tier-III cities emerging as powerful demand centres. Industry studies indicate that smaller cities now contribute a disproportionately large share of festive online demand, reflecting improving internet penetration, digital payments adoption and logistics infrastructure. From an investment perspective, Bajaj Broking believes that the festive season represents an important test of earnings momentum for the second half of FY27. Strong festive demand would support corporate revenue growth across retail, consumer discretionary, automobiles, hospitality and financial services. Conversely, any weakness in rural spending, combined with inflationary pressures, could temper earnings expectations and keep margins under pressure, according to the brokerage. Ahead of the festive season, Sunny Agrawal, Head of Fundamental Research at SBI Securities, says that investors should focus on consumer facing non banking financial companies (NBFCs), like the ones who focus on auto, home loan and gold loan, along with auto and auto ancillary, consumption especially discretionary like jewellery, travel, hotel, QSR, fashion brands, as well as home improvement solution providers like paints, tiles, etc. “For equity markets, a measured and selective approach remains appropriate in the near term. Valuations in several consumer-facing segments already discount a meaningful demand recovery, leaving limited room for disappointment. Furthermore, developments in crude oil prices, inflation trends and monsoon outcomes will continue to influence market sentiment and earnings expectations over the next few months,” Bajaj Broking concluded. Overall, Bajaj Broking feels that consumer durables and retail have very higher sensitivity to festival season, followed by automobiles and private banks or NBFCs. Hospitality has a medium-high sensitivity, while that for FMCG is medium and low for IT services. 10 stocks that will remain in spotlight Shrikant Chouhan, Head Equity Research at Kotak Securities, listed out 10 stocks on which the brokerage has a positive view ahead of the festive season, amid expectations of a surge in discretionary spending. 1. M&M M&M is expected to continue outperforming industry growth across tractor and CV segments and a strong product launch cycle should help sustain SUV segment leadership, Chouhan said. He noted that the company aspires its SUV segment volumes to grow by mid-high teens yoy in FY27E. LCV cycle is also likely to continue its momentum, which aids well for the company. “M&M continues to execute well by maintaining a leadership position in all three segments, an improvement in return ratios and cash flow generation,” the analyst further highlighted. 2. Eicher Motors The analyst expects Royal Enfield’s domestic volume growth momentum to continue at a healthy pace, and believes that the capacity expansion along with model launches augurs well for the company. A potential entry into the 250 cc segment could further widen the addressable market and attract younger consumers, he said, adding that the aspirational nature of brand and growing disposable income should benefit Royal Enfield’s demand. “We expect gradual improvement in profitability, driven by price increases, value engineering and control over other costs,” he further said. Also read | Which auto stocks should you buy after August sales? Here are Nomura, other brokerages’ top picks 3. Eternal Zomato and Blinkit-parent Eternal is a leading Indian internet company operating food delivery, quick commerce (Blinkit), going-out (District), and B2B supplies (Hyperpure), Chouhan noted, adding that the company is transforming into a diversified consumer-tech platform, with Blinkit emerging as the key growth engine. “We expect Eternal to deliver a robust 49% revenue CAGR over FY26–29E, led by rapid expansion in quick commerce and sustained growth in food delivery. As scale improves and operating leverage strengthens, we forecast EBITDA margins to expand from 2.2% in FY2026 to 5.3% in FY29, driving a meaningful improvement in profitability,” he wrote. 4. Nykaa FSN E-Commerce Ventures’ Nykaa is a leading omnichannel beauty, personal care and fashion retailer with a growing portfolio of owned brands. The company expects strong long-term growth, driven by premiumization, AI-led personalization, faster deliveries, category expansion, and continued investments in customer acquisition, Chouhan noted, adding that improving operating leverage and the scaling up of its beauty, fashion, and owned-brand businesses are expected to support profitability. “We remain positive on the stock given its strong growth outlook and improving earnings profile.” 5. Apollo Hospitals Apollo Hospitals remains Kotak’s preferred hospital pick. “We like the combination of strong existing-hospital performance, manageable capacity expansion, improving pharmacy profitability and the approaching digital breakeven. Valuations appear reasonable for the quality and growth visibility,” said Chouhan. 6. Dr. Lal PathLabs Dr. Lal PathLabs is one of India’s leading diagnostic chains, offering pathology and preventive healthcare services through its extensive network of laboratories and collection centres. The analyst from Kotak Securities noted that the company is seeing a steady recovery in test volumes, with Q1FY27 sample volumes growing 11% YoY. Realization per test also increased around 8%. The turnaround in Suburban Diagnostics and calibrated network expansion should further support volume growth, he said. “With management now expecting mid-teens revenue growth in FY27, we expect sales and earnings to remain on a healthy trajectory, with EBITDA and adjusted EPS CAGR of 16% and 15%, respectively, over FY26-29,” he added. 7. ICICI Bank Adding to the slew of bullish brokerage calls for ICICI Bank, Shrikant Chouhan noted that the company has delivered best-in-class underwriting and resilient asset quality, with net NPLs at historical lows. Strong liability franchise and pricing discipline should support NIM resilience, while loan growth recovery and operating leverage provide scope for sustained 15% RoE, he added. Also read | Explained: What $127 billion FCNR(B) inflows mean for ICICI Bank, HDFC Bank, other bank stocks 8. Axis Bank Naming Axis Bank as another festive pick, Chouhan said the lender’s retail franchise offers significant growth potential through mortgages, affordable housing, gold and education loans. Technology-led execution and improving branch productivity should drive operating leverage, while lower credit costs and better loan mix provide a path toward improving RoE and potential valuation re-rating. 9. Shriram Finance The recent MUFG capital infusion and AAA rating upgrade provide a structural funding advantage to Shriram Finance, according to the analyst from Kotak Securities. He noted that lower borrowing costs and improved leverage should support margin expansion and 16% medium-term RoE. Strong asset-quality performance and shift toward newer, lower-risk vehicles support sustainable 17-18% medium-term AUM growth, he further said. 10. Bajaj Finance Strong 22% AUM growth demonstrates continued momentum across its diversified lending franchise were the key factors highlighted by Chouhan as he named Bajaj Finance as one of his festive picks. He noted that declining credit costs and Fin-AI-led operating leverage should support RoA expansion, while 21-26% medium-term earnings growth and 19-20% RoE offer a compelling growth-profitability combination. Why caution is warranted However, the outlook is not risk-free. Monsoon is the most immediate concern, according to Bajaj Broking. It noted that India's southwest monsoon has underperformed expectations, with cumulative rainfall running nearly 14% below normal by the end of August. Additionally, nearly 47% of India's districts have received deficient or large-deficient rainfall, according to IMD data. While agriculture is the obvious victim to deficient rainfall, the implications extend well beyond agriculture. Rural India accounts for a substantial share of demand for two-wheelers (at about 55-56%), entry-level automobiles (50%), consumer durables (6-7%), FMCG products (51%) and discretionary purchases (45%) during the festive season, the brokerage said, adding that a weaker kharif harvest and lower farm incomes could weigh on spending sentiment across large parts of the country. Inflation is another key variable. The combination of elevated crude oil prices, supply-chain disruptions and weather-related pressures on agricultural output poses an upside risk to inflation during the festive quarter, according to Bajaj Broking. Also read |Bigger market crash ahead? Analysts weigh how Sensex, Nifty may react if US 10-year bond yield touches 5% (With inputs from agencies) (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times) (What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2025, Share Market on Budget 2025 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .) Subscribe to ET Prime and read the Economic Times ePaper Online.and Sensex Today. Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price (What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2025, Share Market on Budget 2025 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .) Subscribe to ET Prime and read the Economic Times ePaper Online.and Sensex Today. Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price
Every year, the festive season shines up with Ganesh Chaturthi, with the crescendo building up through Navratri and Durga Puja, and the finale landing on Dhanteras and Diwali before the wedding season takes over. This is accompanied with higher footfalls, orders, ticket sizes and margins. This year’s festive season comes at a crucial juncture. Following the outbreak of the US-Iran conflict earlier this year, oil prices have seen a skyrocketing rally and spiked inflationary worries. Bajaj Broking in its monthly outlook report highlighted that this has increased input cost pressures and injected fresh uncertainty into corporate and consumer decision-making. Over the last two months, most of the market commentaries pointed towards a stronger consumer demand during the festive season despite implications of the war, the domestic brokerage however noted, adding that consumer companies, retailers, automobile manufacturers and e-commerce platforms are broadly preparing for high single-digit to low double-digit growth in festive demand, supported by urban consumption resilience, easier financial conditions and the continued premiumisation trend across product categories. What’s boosting hopes for a strong festive season? While concerns prevail, urban demand continues to remain resilient. Strong employment conditions in services sectors, healthier household balance sheets and moderating borrowing costs are expected to support discretionary spending, the domestic brokerage said, adding that retail financing, consumer durable loans, vehicle financing and credit card spending typically accelerate during the festive period, amplifying purchasing power. At the same time, aggressive promotional campaigns from retailers and e-commerce platforms are likely to stimulate sales across categories ranging from smartphones and electronics to apparel and home improvement products, it added. “Demand across premium automobiles, smartphones, jewellery, travel, hospitality and branded apparel has consistently outpaced mass-market segments as higher-income consumers remain relatively insulated from inflationary pressures. Market commentaries suggest that nearly 45% of consumers intend to increase festive spending this year, with purchase intentions strongest for jewellery, home appliances and personal gadgets,” Bajaj Broking said. Which sectors will outperform this festive season? Further, it believes e-commerce is also expected to remain a major beneficiary of increased demand during the festive season. India's festive shopping ecosystem has become increasingly digital, with Tier- II and Tier-III cities emerging as powerful demand centres. Industry studies indicate that smaller cities now contribute a disproportionately large share of festive online demand, reflecting improving internet penetration, digital payments adoption and logistics infrastructure. From an investment perspective, Bajaj Broking believes that the festive season represents an important test of earnings momentum for the second half of FY27. Strong festive demand would support corporate revenue growth across retail, consumer discretionary, automobiles, hospitality and financial services. Conversely, any weakness in rural spending, combined with inflationary pressures, could temper earnings expectations and keep margins under pressure, according to the brokerage. Ahead of the festive season, Sunny Agrawal, Head of Fundamental Research at SBI Securities, says that investors should focus on consumer facing non banking financial companies (NBFCs), like the ones who focus on auto, home loan and gold loan, along with auto and auto ancillary, consumption especially discretionary like jewellery, travel, hotel, QSR, fashion brands, as well as home improvement solution providers like paints, tiles, etc. “For equity markets, a measured and selective approach remains appropriate in the near term. Valuations in several consumer-facing segments already discount a meaningful demand recovery, leaving limited room for disappointment. Furthermore, developments in crude oil prices, inflation trends and monsoon outcomes will continue to influence market sentiment and earnings expectations over the next few months,” Bajaj Broking concluded. Overall, Bajaj Broking feels that consumer durables and retail have very higher sensitivity to festival season, followed by automobiles and private banks or NBFCs. Hospitality has a medium-high sensitivity, while that for FMCG is medium and low for IT services. 10 stocks that will remain in spotlight Shrikant Chouhan, Head Equity Research at Kotak Securities, listed out 10 stocks on which the brokerage has a positive view ahead of the festive season, amid expectations of a surge in discretionary spending. 1. M&M M&M is expected to continue outperforming industry growth across tractor and CV segments and a strong product launch cycle should help sustain SUV segment leadership, Chouhan said. He noted that the company aspires its SUV segment volumes to grow by mid-high teens yoy in FY27E. LCV cycle is also likely to continue its momentum, which aids well for the company. “M&M continues to execute well by maintaining a leadership position in all three segments, an improvement in return ratios and cash flow generation,” the analyst further highlighted. 2. Eicher Motors The analyst expects Royal Enfield’s domestic volume growth momentum to continue at a healthy pace, and believes that the capacity expansion along with model launches augurs well for the company. A potential entry into the 250 cc segment could further widen the addressable market and attract younger consumers, he said, adding that the aspirational nature of brand and growing disposable income should benefit Royal Enfield’s demand. “We expect gradual improvement in profitability, driven by price increases, value engineering and control over other costs,” he further said. Also read | Which auto stocks should you buy after August sales? Here are Nomura, other brokerages’ top picks 3. Eternal Zomato and Blinkit-parent Eternal is a leading Indian internet company operating food delivery, quick commerce (Blinkit), going-out (District), and B2B supplies (Hyperpure), Chouhan noted, adding that the company is transforming into a diversified consumer-tech platform, with Blinkit emerging as the key growth engine. “We expect Eternal to deliver a robust 49% revenue CAGR over FY26–29E, led by rapid expansion in quick commerce and sustained growth in food delivery. As scale improves and operating leverage strengthens, we forecast EBITDA margins to expand from 2.2% in FY2026 to 5.3% in FY29, driving a meaningful improvement in profitability,” he wrote. 4. Nykaa FSN E-Commerce Ventures’ Nykaa is a leading omnichannel beauty, personal care and fashion retailer with a growing portfolio of owned brands. The company expects strong long-term growth, driven by premiumization, AI-led personalization, faster deliveries, category expansion, and continued investments in customer acquisition, Chouhan noted, adding that improving operating leverage and the scaling up of its beauty, fashion, and owned-brand businesses are expected to support profitability. “We remain positive on the stock given its strong growth outlook and improving earnings profile.” 5. Apollo Hospitals Apollo Hospitals remains Kotak’s preferred hospital pick. “We like the combination of strong existing-hospital performance, manageable capacity expansion, improving pharmacy profitability and the approaching digital breakeven. Valuations appear reasonable for the quality and growth visibility,” said Chouhan. 6. Dr. Lal PathLabs Dr. Lal PathLabs is one of India’s leading diagnostic chains, offering pathology and preventive healthcare services through its extensive network of laboratories and collection centres. The analyst from Kotak Securities noted that the company is seeing a steady recovery in test volumes, with Q1FY27 sample volumes growing 11% YoY. Realization per test also increased around 8%. The turnaround in Suburban Diagnostics and calibrated network expansion should further support volume growth, he said. “With management now expecting mid-teens revenue growth in FY27, we expect sales and earnings to remain on a healthy trajectory, with EBITDA and adjusted EPS CAGR of 16% and 15%, respectively, over FY26-29,” he added. 7. ICICI Bank Adding to the slew of bullish brokerage calls for ICICI Bank, Shrikant Chouhan noted that the company has delivered best-in-class underwriting and resilient asset quality, with net NPLs at historical lows. Strong liability franchise and pricing discipline should support NIM resilience, while loan growth recovery and operating leverage provide scope for sustained 15% RoE, he added. Also read | Explained: What $127 billion FCNR(B) inflows mean for ICICI Bank, HDFC Bank, other bank stocks 8. Axis Bank Naming Axis Bank as another festive pick, Chouhan said the lender’s retail franchise offers significant growth potential through mortgages, affordable housing, gold and education loans. Technology-led execution and improving branch productivity should drive operating leverage, while lower credit costs and better loan mix provide a path toward improving RoE and potential valuation re-rating. 9. Shriram Finance The recent MUFG capital infusion and AAA rating upgrade provide a structural funding advantage to Shriram Finance, according to the analyst from Kotak Securities. He noted that lower borrowing costs and improved leverage should support margin expansion and 16% medium-term RoE. Strong asset-quality performance and shift toward newer, lower-risk vehicles support sustainable 17-18% medium-term AUM growth, he further said. 10. Bajaj Finance Strong 22% AUM growth demonstrates continued momentum across its diversified lending franchise were the key factors highlighted by Chouhan as he named Bajaj Finance as one of his festive picks. He noted that declining credit costs and Fin-AI-led operating leverage should support RoA expansion, while 21-26% medium-term earnings growth and 19-20% RoE offer a compelling growth-profitability combination. Why caution is warranted However, the outlook is not risk-free. Monsoon is the most immediate concern, according to Bajaj Broking. It noted that India's southwest monsoon has underperformed expectations, with cumulative rainfall running nearly 14% below normal by the end of August. Additionally, nearly 47% of India's districts have received deficient or large-deficient rainfall, according to IMD data. While agriculture is the obvious victim to deficient rainfall, the implications extend well beyond agriculture. Rural India accounts for a substantial share of demand for two-wheelers (at about 55-56%), entry-level automobiles (50%), consumer durables (6-7%), FMCG products (51%) and discretionary purchases (45%) during the festive season, the brokerage said, adding that a weaker kharif harvest and lower farm incomes could weigh on spending sentiment across large parts of the country. Inflation is another key variable. The combination of elevated crude oil prices, supply-chain disruptions and weather-related pressures on agricultural output poses an upside risk to inflation during the festive quarter, according to Bajaj Broking. Also read |Bigger market crash ahead? Analysts weigh how Sensex, Nifty may react if US 10-year bond yield touches 5% (With inputs from agencies) (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times) (What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2025, Share Market on Budget 2025 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .) Subscribe to ET Prime and read the Economic Times ePaper Online.and Sensex Today. Top Trending Stocks: SBI Share Price, Axis Bank Shar
document fetched 2026-09-05 02:58