close
close

economy: In a developing economy, new defensive sectors usually appear: 5 companies from the tiles and ceramics industry and producers of household products with a growth potential of up to 41%

Posted on by darion

summary

The word “defensive actions” is often used on the street. In most cases, these are FMCG, pharmaceutical and other companies that are called defensive stocks. The reason is that the demand for these companies is constant and not greatly affected, even in the event of an economic slowdown. The question is, in an economy that is growing faster and with new areas of consumption emerging every other day, and in which seasonal and cyclical demand has reached a stage where it remains above single digits under all economic conditions, shouldn’t they too should be considered defensive and priced accordingly. Arguably, the Indian economy has reached a stage where demand for tiles, ceramics, construction products and surplus cement has reached a level where, in worst-case scenarios, it will not fall below a certain point.

Among the sectors that were re-rated at the very beginning of the bull market that started in 2014 when Modi 1.0 was kicked out, some select homebuilding sectors were re-rated. The reason was the expectation that, along with economic recovery, spending on building and modernizing houses would increase. Also, government spending on infrastructure construction, which was expected to increase, had to be destroyed

ETMarkets.com

  • FONT SIZE

    ABCSmall

    ABCMediocre

    ABCBig

  • RESCUE
  • PRINT
  • COMMENT

Oh oh! This is an exclusive story available only to selected readers.

Don’t worry. You’re one step further.

Why ?

  • Exclusive articles, editorials and expert opinions from the Economic Times. in over 20 sectors

  • Inventory analysis. Market research. Industry trends for over 4,000 shares

  • Pure experience with
    Minimal ads

  • Comment and engage with the ET Prime community

  • Exclusive invites you to Virtual events with industry leaders

  • Trusted team Journalists and analysts who can best filter the signal from the noise

  • Get it 1-year free subscription to TOI+ worth Rs.799/-​