Business News Desk – During the Corona pandemic, when people were sitting at home and had limited options to spend, they turned to the stock market. Increasing investments by retail investors, low valuations made stock markets an attractive investment option. People also turned to Futures and Options (F&O) to make quick profits. This enthusiasm of investors took the stock market to new heights. The market recovered the losses incurred during the pandemic and is now setting new record levels every year.
Most analysts believe that the main contribution to this was the investment coming into the market through retail investors and SIPs, which gave new life to the market even during the global economic recession. Instead of traditional savings accounts and fixed deposits, more people are now getting attracted towards investing in the stock market. This process of change does not seem to be stopping at the moment. In the month of October, investment in mutual funds through SIP (Systematic Investment Plan) reached a record level of Rs 25,322 crore.
“Investment” has now become the new mantra of “savings”. This is being called the “financialisation of savings”, with people investing in the stock market instead of their traditional savings options. Nearly 20 per cent of wealth creation over the past decade has come from equities, while only 3 per cent of annual savings have been invested in it. According to a report by Morgan Stanley, Indian families have assets worth about $9.7 trillion, a large part of which can come in the stock market. The returns on investment in shares are considered to be the best and in comparison, the concept of earning 7% returns from FD has now become weak.
What does this change mean for India? Well, one thing is that there is no possibility of any major recession in the market. All corrections will recover quickly and the market is set to deliver stable double-digit returns to investors over time. Analysts believe that the rise in the stock market has just begun and this rise is likely to continue.
Asian Paints
On Monday, November 11, the stock closed at Rs 2,547.8, down nearly 8 per cent. Many brokerage firms have expressed disappointment over the company’s weak performance in the September quarter. After this its shares declined. Bulls say that Birla Opus’ entry into the market in the September quarter had less impact as it is still expanding its reach. Volumes may pick up in H2FY25 due to delayed demand and recovery in rural areas. The full impact of better sales mix and recent price hike will be seen during the September quarter.
On the other hand, bearish investors say unusually long monsoon, weak consumer sentiment and greater focus on the urban market have led to the decline in the company’s decorative volumes. The company’s sales and EBITDA are expected to remain flat or weak in the second half as well. Its gross profit margin (GPM) has also declined. This was driven by lower sales of high-margin exterior paints, increase in raw material costs, weak demand and discounts offered by dealers due to competition.
Aarti Industries
On Monday, November 11, the stock closed at Rs 439.25, down about 7.4 per cent. The main reason behind this decline was the weak performance of the company in the September quarter. Bulls say that the stock has fallen drastically by more than 42 percent in the last three months. According to Nuvama, this decline makes the company’s valuation attractive. The company is moving up the value chain and emerging as a preferred global supplier, which will help its growth as the industry conditions improve. On the other hand, Byers says that due to the challenges faced by the industry There is significant pressure on the margins of its key products, which is likely to slow down earnings growth. The company’s management has also reduced its EBITDA guidance, indicating no possibility of relief in the near future.
