TASK 2

Stocks that will go up when economy is downward

1. FMCG Sector

Irrespective of the period an economy is going through, people cannot live without
certain items. Even though people might stop spending on expensive restaurants
they still will keep buying the food essentials required. People still have to take
care of themselves and buy toothpaste, soap, shampoo detergent, dish soap etc.
Another interesting aspect one would come across during covid was that hosiery
stocks flourished! This was because with the lockdowns in place every person was
stuck in their homes. Miserable as the lockdowns were everyone tried their best to
remain cozy and comfortable in their innerwear at home. This in turn led to
boosting the prospects of these companies.
As these products are always in demand irrespective of the economic environment
they are called consumer staples. This industry is generally the first choice when it
comes to investing during a recession.

Following are some of the top FMCG companies in the Indian markets.
Company MCap (In Cr) CMP PE Debt Equity

Hind. Unilever 5,90,957 2,515.8 58.40 0

 Company MCap (In Cr) CMP PE Debt Equity

Nestle India 2,11,885.59 21,971.35 83.15 0.01

Dabur India 91,050 517.9 53.34 0.11

Godrej Consumer 96,538 951.3 59.81 0.14

ITC Ltd. 5,36,144 423.8 29.44 0

2. Discount Retailers Sector

This is where playing it smart comes in. The consumer staples have to be
purchased somewhere. This itself makes the place selling these products an
investment opportunity in times of recession. If we take a look at the covid-19
crash one can find out that billionaire RK Damani was among the few around the
globe to not only protect his wealth but also increase it in the midst of covid.
This was because of his company DMart which is engaged in one of the top retail
chains in the world. The company’s operating model is quite special. DMart only
includes products that have a low shelf life. This means that consumer staples
make up a large portion of their product portfolio.
But investors must take caution while investing here. This is because not every
retail chain operates as a discount retailer. Most of them expand their product
portfolio to include as many products as possible or to include luxury items as
well. Both of which are harmful in times of recession.
3. Pharma Sector

Similar to consumer staples another sector that does not receive a shortfall in
demand during a recession is the pharma industry. Irrespective of the economy
individuals with chronic diseases have to keep accessing healthcare.
Even on other fronts, a failing economy will only result in further worsening of
people’s health depending on the cause of the calamity. This unfortunately
increases the demand for products released by Pharma companies.
Following are some of the top Pharma companies in India.
 Company's Name MCap (In Cr) CMP PE Debt Equity

Sun Pharma.Inds. 2,30,768 957.45 54.79 0.03

Divi's Lab. 87,246 3,383.2 36.42 0

Dr Reddy's Labs 81,706 4,933.25 22.43 0.18

Cipla 75,283 939.2 28.53 0.04

4. Power and Gas Sector

After noticing other industries on this list it would not come as a surprise to see
this industry. Power and Gas products belong to another group of essentials whose
demands are not as affected as much in comparison to other industries. These
utilities like electricity, fuel are very important as something that cannot be
compromised in today’s day and age. Following are some of the top companies in
the power and gas sector.
5. Other Sectors
There are many other sectors that also have significant advantages over others in
times of recession. This is where investors’ adaptive abilities come to the test. In
recent times technology also has come to play a very important role in times of
recession.
One of the best examples posts the covid crash was Zoom. This technology
allowed many companies to function during the lockdowns. The shares of the
company increased in multi-folds thanks to this. There are many companies today
that operate completely online. These turned out to be multi-baggers during covid
as their work was not affected.
In addition, Alchohol companies are another sector investor that can find shelter. It
has been observed that during recession companies that sell high-end alcohol
generally suffer. This is because although consumers reduce intake they shift to
other cheaper brands in times of recession. This however was not the case in India
during covid as the sector suffered due to the strict lockdowns.

The Top 5:

Brittania:

Britannia Industries is one of India’s leading food companies with a 100-year legacy and annual revenues
in excess of Rs. 9000 Cr. Britannia’s product portfolio includes Biscuits, Bread, Cakes, Rusk, and Dairy
products including Cheese, Beverages, Milk and Yoghurt

The FMCG Brand basic necessities like food and household products in the consumer goods industry.
Britannia has a strong brand reputation and customer loyalty. The company has been operating in India for
over 100 years and has built a strong brand image as a trusted provider of high-quality bakery and dairy
products. This brand reputation and customer loyalty are likely to help Britannia maintain sales even
during an economic downturn. Britannia has a strong financial position with solid cash flows, which can
help the company weather economic turbulence.

KRBL:

KRBL Limited is an Indian rice processing and exporting company, and the world’s largest rice miller. It
is best known for its India Gate brand of basmati rice, which is the largest selling rice brand in India.
ITC:

ITC Limited is an Indian conglomerate company headquartered in Kolkata. The conglomerate has a
diversified presence across industries such as FMCG, hotels, software, packaging, paperboards, specialty
papers and agribusiness. The company has 13 businesses in 5 segments. It exports its products in 90
countries.

ITC is Brittania’s competitor. This brand has a strong presence in various sectors. The ITC Conglomerate
caters to consumers across economic segments with different purchasing power parity. From farmers to
luxury hospitality, ITC has a legacy footprint in various industries. This makes the brand more resistant to
recession.\

Colpal:

Colgate-Palmolive (India) Limited was incorporated on September 23, 1937. In the year 1983, the
company introduced their successful product Colgate Plus toothbrush in the market. In the year 1988,
CPIL received a licence for producing 24,000 tonnes per annum of fatty acids.

ColPal is the Desi Subsidiary of Colgate – the International Conglomerate . The brand is the major market
player in a variety of consumer goods, primarily – toothcare. Colgate is a household name in India and is
synonymous to toothpaste and toothbrush. This means that consumers will buy toothpaste regardless of the
state of economy.

Denora India:

With over 95 years of activity in the electrochemical industry, De Nora is recognized worldwide as a
leading supplier of technologies for the production of chlorine, caustic soda, and derivatives for the Chlor-
alkali industry, as well as the world’s largest manufacturer and recoater of noble metal-coated electrodes.

The brand has a strong presence in India due to sheer loyalty of clients who have stayed with the brand.
The massive use of chemicals and a legacy brand name advantage ensures that the stock is recession proof.

Stocks that will go up when economy is upward

List Of Best Growth Stocks in India

 COMPANY CMP (21 BSE
NSE CODE INDUSTRY
NAME Dec 22) CODE

Bajaj Finance 6,527 BAJFINANCE 500034 Finance (NBFC)

Britannia
4,419 BRITANNIA 500825 Packaged Food
Industries

Muthoot Finance 1,085 MUTHOOTFIN 533398 Finance (NBFC)

Oil Marketing &

Petronet LNG 211 PETRONET 532522
Distribution

Coromandel
912 COROMANDEL 506395 Fertilizers
International

Polycab India 2,669 POLYCAB 542652 Electrical Equipment

Gujarat State
268 GSPL 532702 Utilities
Petronet

Commodity
Deepak Nitrite 2,049 DEEPAKNI 506401
Chemicals

Avanti Feeds 386 AVANTIFEED 512573 Food Products

Alkyl Amines 2,733 ALKYLAMINE 506767 Specialty Chemicals

Caplin Point
727 CAPLIPOINT 524742 Pharmaceuticals
Labs

IOL Chemicals 400 IOLCP 524164 Pharmaceuticals

Bharat Rasayan 9,923 BHARATRAS 590021 Argochemicals

 COMPANY CMP (21 BSE
NSE CODE INDUSTRY
NAME Dec 22) CODE

KEI Industries 1,479 KEI 517569 Electrical Equipment