From home sales and jewellery to power consumption, these are all the sectors that are back to pre-pandemic levels

Advertisement
From home sales and jewellery to power consumption, these are all the sectors that are back to pre-pandemic levels
Canva
  • Boosts of demand in several sectors explain a pick-up in economic activities and earnings recovery for businesses.
  • Mobility across India has moved above pre-pandemic level for the first time in September, according to Google’s COVID-19 community mobility report.
  • Moreover, as festivities begin and economic activities surge, several sectors see spurt in demand as a domino effect.
As sectors like railway, travel companies, hotels, luxury product firms start to report constant improvement in demand and sales, it becomes quite evident that the economy is moving back to normal or say pre-pandemic stage.

Signs of returning to normalcy can also be seen in the improving mobility trends. Mobility across India has moved above pre-pandemic level for the first time in September, according to Google’s COVID-19 community mobility report.

With this, daily consumption of electricity has also increased due to which the Power Ministry has asked power generating stations to optimise utilization, which eventually enables coal factories to operate fully.

Advertisement
"The daily consumption of electricity has crossed beyond 4 billion units per day and 65% to 70% of the demand is being met by coal-fired power generation only, thereby increasing dependence on coal," said the Power Ministry.

Mobility across places of retail, recreation, grocery, pharmacy, parks, transit stations, places of work and residence turned positive in the second half of September and has continued to rise since, according to data from Google's Covid-19 community mobility reports.

“Individuals are eager to spend time outside and travel again,” Yuvika Singhal, economist at QuantEco Research told BloombergQuint.

Advertisement

Moreover, as festivities begin, the trend only seems to be picking up with demand across sectors.

Credit card spending has crossed pre-pandemic levels

Consumer spending trends also explains a lot about economic activity in the country, which currently is on a positive rally. There are 63.9 million credit cards in the country, which are usually used for buying high valued electronics and other products, which explains the consumer spending power.

With festive fervour playing around, credit card spending went up 54%, as per Reserve Bank of India (RBI) data to ₹77,981 crore in August 2021 even more than ₹62,902 crore in February 2020, before the pandemic cursed everything.
Advertisement

“We are seeing a significant revival on [the] ground, which shows that consumer spending is back,” Parag Rao, group head -- payments, consumer finance, digital banking, and information technology at HDFC Bank, told The Economic Times.

Not only credit spending, but attractive home loan rates, vehicle loan rates from banks speak a lot about improved consumer spending and economic recovery.

Banks’ home loan book grew by 8.9% year-on-year to ₹14.66 trillion till July, according to the RBI data.
Advertisement

Currently, mortgage loans in the country are at its lowest at around 6.5%-7%.

Improvement in lending business means improvement in banking financials and hence most bank stocks have performed well in the last six months:
Banks % returns in last 6 months
State Bank of India41%
ICICI Bank26%
Axis Bank20%
Punjab National Bank17%
HDFC Bank16%

Domino effect of the uptick in economic activity has played out well for India’s hotel industry

Advertisement
Revenue per occupied room as of June quarter in some leisure destinations have already crossed pre-pandemic levels reflecting the encouraging trend in demand, said a report by ICICIdirect.

Corporate segment (stay), which has remained a laggard so far due to work from home culture till Q1 (Apr-Jun), has also been seeing some traction during Q2 (Jul-Sep 2021), added the report.

Further, analysts expect the tourism demand to reach pre-pandemic levels sooner than estimated. The government, on Tuesday, announced that domestic flights will operate with full capacity from October 18.

Advertisement
Investors in hotel company stocks have already factored in the positives as they expect the industry to speed with the economic activity.

Hotel company stocks have rallied immensely in the last 6 months showing a boost in demand for the space.
Hotel company % return in last 6 months
Kamat Hotels129%
Indian Hotels Company103%
Chalet Hotels81%
Lemon Tree Hotels72%
EIH58%
Asian Hotels (North)37%
Taj GVK Hotels35%

IRCTC was rather the first one to benefit from the pick-up in movement

While international flights remained closed for a long period of time, inter state travelling paced up for Indian Railway Catering and Tourism Corporation (IRCTC). In fact, spotting an emerging trend in inter state travel, IRCTC launched several trains in 2021 including travel packages for pilgrimage sites.
Advertisement

Increase in train booking was reflected in the company’s financials wherein it made a profit of ₹82.53 crore in June quarter 2021 as compared to a loss of ₹24.60 crore during the same period last year.

The company’s aggressive expansion strategy and boost in train bookings rallied its shares listed on the stock exchanges. Apart from online ticket services, IRCTC also has started focusing on the hospitality business by tying up with hotels, tour and travel service providers, local food suppliers and aviation companies as well.

Shares of IRCTC have been in the limelight for the last six months as it tripled investors’ money by surging 203% since April 2021.
Advertisement

Casino company Delta Corp’s stock almost doubled in the last three months

Befitting from the boost in tourism and travel industry, casino operating company Delta Corp witnessed a surge in sales in July to September. Net sales of the company nearly doubled to ₹74 crore in September quarter from ₹38 crore in the same quarter a year earlier. The company operates casinos in Goa and Sikkim where the government has legalised gambling. It also operates hotels under several brands.

Net sales of the company doubled even as it operated casinos and hotels with 50% capacity as restricted by the government.

Advertisement
E-commerce platforms and retail chains boom with ease in restrictions

While e-commerce companies, offering groceries, like Amazon, Flipkart, JioMart, DMart, BigBasket continued to operate during lockdown, it had faced supply crunch in the initial days of the lockdown, last year. Now with ease in restriction along with festive season sales, these platforms are attracting buyers with steep discounts.

E-commerce platforms, including social commerce and grocery, garnered about $2.7 billion in sales in the first four days of the festive sale (October 2- October 5), said consulting firm RedSeer.

Moreover, these platforms are expected to potentially clock over $9 billion gross GMV (gross merchandise value) during the entire festive season this year as against $7.4 billion last year.
Advertisement

Real estate developers back in action with rising demand

With rising consumption power, record low home loan rates, sops offered by realty developers are helping real estate business gain momentum in both residential and commercial property segments

Top seven property markets across India have reportedly recorded over 124% year-on-year jump in housing sales between July-September as the country began to cautiously return to normal economic activities in various states supported by aggressive vaccination drives.

Advertisement
Now, with the festive seasons around the corner, developers are offering various discounts such as straight-up price discounts, deferred payment plans and other incentives like no pre-EMIs (monthly installments) for under-construction properties, waiver of floor rise and car parking charges, free home furnishings, attractive gifts and so on to attract fence-sitters and prospective home buyers.

Real estate segment that was reeling with the dull demand due to lockdown restrictions and poor economic activity are now back in action with pick up in demand.

Shares of most property developers have surged significantly in the last one month.
Real estate developers% return in the last six months
Macrotech Developers (Lodha)155%
Indiabulls Real Estate90%
Godrej Properties86%
Oberoi Realty73%
Sunteck realty73%
Brigade Enterprises73%
DLF67%
Sobha61%
Prestige Estates Projects56%

Advertisement
SEE ALSO: TPG makes a billion dollar bet on Tata Motors’ EV dreams

Former SBI chair Rajnish Kumar joins BharatPe to guide its transformation to a small finance bank

RBI has barred one of the country's top auditors from looking at the books of any company regulated by the central bank
{{}}