Friends, today's video is going to be very interesting
as I will tell you about 3 such sectors that have shown great recovery after COVID 19
recovery in any sector doesn't only mean that their share prices have gone up but
we have seen a good activity there fundamentally
and parameters like sales and others have reached their pre-Covid level
or are about to reach that point
today, we will talk about 3 such sectors in which we have seen the best recovery
and to make it more interesting, I will try to discuss some of the companies in those sectors
and will see the impact of it in their share price
so that you understand when fundamentally the business of the company improves, their share price automatically increases
I, Jagdeep Singh, welcome you to Groww YouTube channel
Let's quickly start today's video!
But before that, if you haven't subscribed Groww yet, do hit the subscribe button now!
Without further delay, let me take you to the first industry where we can see the best improvement
after covid situation
The first sector on our list is the automobile sector
taking about Automobile sector after Covid situation as there are many business units that operates under automobile sector
so autombile sector has segments such as passenger vehicles and commercial vehicles
so it has multiple segments
if I talk about the whole auto sector, during Covid situation, there was a time when it has done zero sales
but if I talk about August or Sept. sales and specifically passenger segment
so if we compare the total sales of these two months with the the same months of last year
compared to that it has made better sales
which means from zero sales we have seen nice growth in the last month
so, do we see its sales impact in its index?
or the top companies of automobile sector
let's take two examples of automobile sector - Maruti Suzuki, Mahindra and Mahindra
so, do we see the impact in these as we have seen after the Covid situation
when I was talking about automobile sector, I have already told you about commercial vehicles and passenger sector
there was one more segment where this Covid situation impact was very less
and the segment was tractor sales
talking about tractor sales, starting from Covi situation to now, it has been the the highest selling sector till now
the reason why Mahindra & Mahindra did not get impacted much as their tractors' sales was quite high
talking about overall auto sector, so, motorcycle, passenger, commercial vehicles & tractor segments
here, some segments have shown a very good growth
but commerical vehicle is such segment where we haven't seen any growth for sometime
let's quickly discuss the auto index and compare it based both pre Covid situation and now
if I see the pre Covid situation, the Nifty auto index used to trade at almost 8000
becasue it already had some downturns as it there were many cocerns dueto which the shares were trading low
due to which, their index - auto index also used to trade low
but when the Covid situation came and duw to which, auto sector was impacted badly
and the index value also touched 4500 once
which means almost 50% down it had came and if we talk from that time till now which is post covid situation
we can see a recovery of 75%
If I talk about Nifty Auto Index today, it is currently trading at 7800-7900
as i have told you that auto sector is one such sector post Covid situation
where we have seen a very good improvement
Mahindra and Mahindra touched a price of Rs. 270 when Covid situation was at its peak
but, talking about the present day, the share price of this is trading at above Rs. 590
which means this company has provided 10% growth to its investors from Covid situation till now
it tells us that the complete sector had positivity and due to which the companies that had a diversified portfolio
Mahindra & Mahindra has a segment which works around Tractor segment
which was not impacted by Covid at all and because of which we have seen good returns in the last few months
If we see Maruti Suzuki, the share price of Maruti Suzuki even touched Rs. 4000
after touching Rs. 4000, today its share price is trading at almost Rs. 7100
if you talk about passenger segment sales numbers, we have done a video on it earlier on Tata Motors
where we talked about its sales numbers and if you want to see it you can check it in detail
even companies like Tata Motors have shown a good growth in passenger segment
overall, automobile sector is a sector where we have seen a good growth after Covid situation
the impact can be seen fundamentally in its numbers and Nifty Auto Index
if I consider 2-3 big companies of this segment, almost all of them have provided good returns to its investors in these times
But if I talk about commercial vehicle segment, we haven't seen much growth in this segment under automobile segment
but time will tell how much much recovery we can expect from there
but overall, automobile sector has shown a very good recovery as a sector in the last few months
let's talk about the next sector where we can see growth like we have seen in the automobile sector
talking about the 2nd sector which has recovered after Covid situation, actually not only recovery
but this was such a sector even during Covid which was not impacted much
and the name of this sector is FMCG sector, which can be tracked by an index called Nifty FMCG index
So, Nifty FMCG index tells you how is the work going on there and how are the companies performing
as this index is made up of top FMCG sector
so if we talk about pre covid situation, NIFTY FMCG index was trading around 30-31 level
but when the covid situation came, all companies were affected and the FMCG sector was affected as well
and its index also touched 2300 at sometime
but if I talk about the present day, it has again come to 30,000 level
if we discuss some of the important parameters that tell us about the FMCG sector
all the parameters indicate that in recent times, we can see a steady growth here as well
to understand the growth of it, we will try to understand the recent quarterly results
so that you know how the companies have performed in the recent quarter results
if we check out top 2-3 companies and get a good performance in their quarterly results
and if we see good numbers then it means we can see revival in the FMCG sector after covid situation
let's talk about HUL (Hindustan Unilever Limited) which is the market leader of this sector
So HUL is such a company whose share price didn't go down even in the midst of Covid situation
if currently, we see the last 1-year return, the share price of this company is almost constant
so if we talk about HUL recent quarter results, let me take you to my screen quickly where
you can see the total sale of HUL in September quarter was of Rs. 11,683 crores
comparing it to Sep 2019 sales, it used to be Rs. 10,105 Cr
comparing both, HULhave made more sales
which means it started demand pick up in the last quarter
because of which company's topline has improved immensely
if we talk about HULs operating profit margin which is an important parameter for FMCG Sector
In HULs case, the operating profit margin of the company was 25%
If we check the Net profit of the company in September quarter of 2020, it booked a profit of Rs. 1974 Cr
and if we see the September quarter of 2019, it booked a profit of Rs. 1814 Cr
so this means that company has done a good performance in September quarter
if we compare this to pre-covid situation also, the company has still made a good profit for its investors
but there was no movement in the share price of the company as such during and after the covid situation as well
this sector has one more company called Britannia which shows through its quarterly results that is demand is picking up lately
let's take you to my screen where I will show you the quarterly results of Britannia
If we see Sep 2020, company's revenue was Rs. 3419 Cr
if we compare this to the same quarter of last financial year, company had a revenue of Rs. 3049 Cr
which means the revenue of the company has improved as the topline has improved
Topline improved means that the company's sales have improved and compared to Covid situation, company's sale have increased
one more good thing about Britannia is company's operating profit margin has increased from 16% in Sept 2016 to 20% in Sept 2020
which means that the company's sales have improved and company's operating profit margin has improved as well
the impact of which can be seen in its net profit as well
company had booked a profit of Rs. 404 Cr in the last September
Currently in this quarter, company has booked a profit of Rs. 498 Cr
which means what we can see from Top FMCG companies result is the current result produced by the companies
and the sales have almost reached its pre-covid level
and compared to which, company had peformed really well for its investors
let's now talk about the third sector where we have seen a very good improvement after the covid situation
and the name of the sector is IT sector
you must be aware that ITsector major companies such as TCS, Infosys, Wipro all of them
all the companies have made good profit for their investors in the last few months
not ony returns, if we see the company's fundamentals, returns and margins
and costs, then in every sector, these companies have performed good in the last few months
if we take the example of the biggest company in IT sector which Tata Consulatancy Services (TCS)
so when the COVID situation was at its peak, this company even touched a price of Rs 1600
but if we talk about the present day, the share price of this company trades around Rs. 2600
and has come up almost 60% from its bottom
this is a large cap company and the biggest company in IT sector and you can imagine when the economy was getting impacted by Covid
this sector was a sector which was least impacted
and after Covid, IT companies have changed their hiring strategy and said that they will increase the hiring in the coming days
this implies that companies are hiring nirmally and their business are also not getting impacted
if we take any parameter of the company, then it has performed very good for its investors
After TCS, if we take Infosys, its share price touched its bottom once around Rs. 500
then after going up to almost 100%, its share price is almost around Rs. 1075
so by now you must have understood that how IT sectors have given good performance to its investors
and apart from that, fundamanetally, all the results were good of this quarter
apart from that if you consider Wipro or any other mid cap company which have good fundamentals
so all the companies have performed well fundamentally, the impact of which we can see in its share price
so these were the 3 sectors whcih Iwanted to explain to you
that which were the companies of this sector that performed good and Idid not choose the company; I just took the market leaders
and tried to explain how they have performed
so if the sectors have performed good and we see a good recovery there
then the same impact you see in the market leaders of those industries
so just as we discussed 3 sectors, viz. Auto, FMCG and the last was IT sector
so if you see all the three sectors, all the companies have performed really well
in the last few months
here, I want to explain about an approach which is called top down approach
top down approach is basically when you think of investing, there are two ways of investment
first method is choosing a company without knowing about its industry
this is basically bottom up approach in which you see the company is good, the industry is good and the growth is good, so you invest
but the second approach is top down approach
so in top down approach, suppose you thought that in the near future, IT sector will perform well
so, first, you did your research about IT sector and its growth in the coming days and then only you invest when you see potential
but once you have selected the IT sector, which company you want to invest in?
then you will check different parameters such as large cap, mid cap and small cap, where you want to invest
based on these parameters, you will choose a good company of the industry which you are sure will give a good return in the future
so this approach is called top down approach
so the sectors that we have discussed, if you think any of the sectors can give a good performance in the future
you can do your own reseach about that and after that as per your risk appetite, choose a good company from an industry
read about its management and efficiency and plan a long term investment in it
so these can be various approaches to choose a good company
my motive of today's video was just this, that for educational purpose if you want to select a company then what are the parameters you can check
and recently, after covid, what are the sectors that have given a good returns to ts investors
now let's talk about some of the questions asked in the last video
let's discuss the first question
the first question asked by our viewer is - if my mobile number is not linked to my Aadhar then how can I buy/sell shares
so ,there is a very easy way to do this when you create your account on Groww
you get an option called download account opening form
so, you have to download the account opening form and there it will be mentioned, where and all you have to sign
after signing, you have to courier that form to the address mentioned
and once we recieve the form and after verifying it, your account will be activated shortly
so there are two methods of trading in stocks - first is if your mobile is linked with Aadhar
then you can activate your account within a few minutes
and start investing in stock market
but if your mobile number is not linked with your Aadhar card
then you have to download a form and after signing it you have to courier it
after that your job is done and your account will be activated shortly
so the second questions is - how many days does it take after record date to receive the dividend amount in your bank account
so the dividend process is decided by the company
company tells you about record date and x date and after that whenever you receive your money in your account
it will be according to the payment date mentioned by the company
so here you have to check in detail in the company's corporate action
and check when the company has mentioned the date of credit
because broker doesn't do anything here, the company directly credits your bank account with the money
the bank account you have mentioned while creating your demat account
so you will get the money directly in that bank account
if you want to check the date when the company credits the money after record date, you can go to the company's website and check it there easily
the you will know when you will get the money into your account
Hope you have liked the video, if yes, then hit the like button and comment which sector you prefer from the three of them
and where you are planning to invest in the coming days
f you haven't subscribed Groww's channel yet, do hit the subscribe button
as we come up with 3-4 educational videos on this channel every week
which can help you to become a good investor
Happy Investing!