Rising concerns over the air quality index, amidst high pollution levels, have kept the National Capital Region of Delhi in the spotlight. While the government is focusing on various measures to reduce pollution, citizens' focus will also be on insulating themselves from the impact of high pollution.
With higher pollution the demand for air purifiers should rise, said Ambareesh Baliga, an independent market expert. However, Baliga believes the increase in demand may come from select pockets. Air purifiers are high-end products. Therefore, the affordability of air purifiers by the masses remains a question.
Consumer durables stocks
The consumer durables manufacturers, which have seen a lean period of demand in the last few quarters nevertheless will try to encash the opportunity thrown by air purifiers to drive growth. Some of the major air purifiers and related product manufacturers include Voltas, Havells, Symphony, etc. in the listed space.
In addition to air purifiers, Baliga believes the demand for health policies could also increase. Insurance providers that benefit from rising consumer awareness will see further benefits and insurance penetration will rise, helping companies like HDFC Life, ICICI Lombard, Star Health, and allied insurance companies.
Healthcare companies will be other major beneficiaries and may see a significant increase in demand for preventive medications. Vitamin and mineral supplements may see an increase in consumption, while sales of another group of acute products such as respiratory care, antibacterials, pain relief and so on may see an uptick. Demand for an acute range of products remained subdued in Q2 and hence some uptick may benefit pharma companies earning a higher proportion of revenue from domestic markets like Cipla, Sun Pharmaceuticals, Zydus Healthcare, Lupine, IPCA, and so on.
Besides Santosh Meena, Head of Research Swastika Investment said, we generally see some health concerns among people; So, so we can expect a positive impact on stocks like Apollo Hospital, Max Healthcare, Dr. Lal PathLab, Metropolis, etc.
Meena said pollution, especially during winter in Delhi, remains a serious concern, prompting the government to respond quickly. In the short term, we mainly see sentiment-driven effects in stocks related to fossil fuels, energy, and construction, with a negative trajectory. Conversely, stocks associated with renewable energy may witness a positive upswing he added.
While people are facing health problems due to poor air quality, sectors like pharma (Cipla), hospitals (Apollo Hospitals, Global Health), and diagnostic companies (Dr. Lal Pathlabs, Metropolis) are direct beneficiaries, said Manish Chowdhury, Head of Research, StoxBox. Chowdhury also added that fast food restaurant companies and food delivery companies could be indirect players due to the restricted movement of people.
However, according to Meena, stocks like DLF, NBCC, Larsen & Toubro, M&M and Ashok Leyland may see a temporary negative impact, while stocks like Indraprastha Gas (IGL) and Everest Kanto Cylinder may see a positive impact in the short term.
Compressed natural gas (CNG), which remains a cleaner and more cost-effective fuel, may also keep finding favor. Demand for CNG-powered vehicles may remain strong as high pollution is a motivating factor. Therefore, city gas distribution companies like Indraprastha Gas (IGL) may also see better investor confidence.
Disclaimer: The opinions and recommendations above are those of individual analysts or brokerage firms, and not of Business2Business. Investors are advised to consult certified experts before making any investment decisions.
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