Easing of Pandemic-led Restrictions and its impact on Hospitality and Textiles Sector
With speedy vaccination drives in India as well
as in other countries, the pandemic-led restrictions are gradually
easing out. The direct impact of this improvement can be seen in
the Hotel, Hospitality and Travel Sectors as these were the worst
hit sectors due to the Covid-19 restrictions world-wide.
Hospitality
and Hotel Industries
With the gradual ease of restrictions and opening up of the
lock-downs, business function has gradually started moving towards normalcy all
across the country. Everyone’s favorite
malls, shops and eateries have begun bustling with crowds reminiscent of the
pre-Covid era and in order to meet the demands of these business centers,
productions have to jumpstart in all sectors.
Opening up of the production units will facilitate the migrant
workforce to rejoin the job movement. This will initiate the process of movement
of the workforce all across the globe and business travel. The Travel and Hospitality
industry will be the major beneficiary to this situation.
The European Hospitality industry hopes that the removal of health
restrictions would boost demand during the summer and thus, revenue growth; and
has already taken pro-active measures.
To leverage this situation, some chains which have
operations in India, have also started launching projects in new avatars.
Recently as per article published in The Economic Times [Hotel companies put
Covid blues behind them, to launch more properties - The Economic Times
(indiatimes.com)], ITC Hotels, InterContinental
Hotels Group (IHG) and Radisson Hotel Group have
announced the launch of new hotel brands.
The indication of improving situation of the Hospitality
industry can be noticed from the recent range shift in the price movement in
their stock prices in this sector. The increase in delivery volume
in stocks like INDIAHOTEL, ASIAN HOTEL (EAST), KAMATH HOTEL, ROYAL
ORCHID, ORIENT HOTEL and ETIHAD HOTEL indicates this
sector, which was, otherwise, in a drowsy state due to pandemic lock-down, will
now start displaying a positive rally for a considerably longer time period.
This will attract stock investors to put their
money on these industries.
Textile
Industries
Similarly, for investors, it is a golden opportunity to invest
in stocks in Cotton and Garment sectors as they have also been sluggish since
the pandemic. With the retail outlets that have started opening up, demand for
clothes have grown multifold. Lock-down had restricted the public to their
home, thus leading to the success in the sales of home worn outfits, which were
primarily marketed through on-line platforms.
In a recent study it was indicated that due to lock-down people
have put on extra weight which makes their old garments unusable. Now, when
people have started coming to roads and markets, the demand for new garments
will rise exponentially for a considerable amount of time.
Share Prices of all garment
companies have started showing positive movement. Textile
industries in India faced major losses in FY2020 caused by the
shutting down of production as well as outlet units due to pandemic situation.
To recover from this predicament, industries have already started implementing
new strategies so that they can meet the growing demand of today's un-locked market.
The positive movement of Share Prices of Textile and related
companies can be evident from the recent stock price movements of companies like HIMATSINGKA,
RUPA, LAXMIMACH (Spinning Equipments), LOVABLE, MIRZA
International (Leather garments), RSWM (Rajasthan Spinning
and Weaving Mills), ZODIAC Cloths, KITEX, Bombay Dying, Siyarams
Industries (SIYSIL), ARVIND Mills, etc. The delivery
volume has been growing on these stocks.
In the coming days, investors will be putting their bets on
these industries for multi-bagger returns. NRIs who have missed riding
the recent rally in Metal and Pharma can eye on these stocks for decent return
in coming days.
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