Corona Virus Reboot 2020

• FMCG goods will be stocked up more by households.

• FMCG retail will go further near to the customer and know them better.
Retail will go from locality to society.
• Habits pertaining to online gaming, video-conferencing, work from
home, etc. will stay on after the crisis
• Medical facilities will be upgraded and density per capita will be
increased. Ripple effect on the increase of medical college seats.
Private as well as government investment will favor this sector.
• Increased consumption of online content & mobile data.
• Governments are already creating money supply. They will create
demand by investing further in Infrastructure.
• Importance of organic food, supplements, vegan culture will increase.

Devang Kabra
 Corona Virus Reboot 2020
• More people will follow yoga, meditation and traditional mind and
body balancing techniques. Godmen will have an increased following.
• Focus on domestic production will increase. Import substitutes will be
encouraged by government and consumers, both.
• Indian Pharma Companies will have a better foothold in international
markets. More focus on high profile R&D in Indian pharma companies.
• Family entertainment centers like malls, markets, etc will face high
customer expectation for hygiene, service quality, promo schemes, etc.
More pronounced shift to organised retail will take place.
• More investment of FMCG companies on product packaging and
presentation for showing the genuineness of their product ingredients.
• Serious organic farming will take place and a range of genuine costly
organic produce will become a new product category.
• Insurance penetration and awareness will increase.
Devang Kabra
 What to do in Equity Markets ?
• Technicals show that we are in a Bear Market
• Fundamentals show we are in a recession
• Strategy of buying – in 5 installments of 20% each spread across 18 to 24
months. No rush into buying.
• Strategy of holding – follow strict Stop Loss and actively monitor the trade
• Strategy for current holding – book and cash out if no buying demand is seen
at dips.
• Companies to buy are companies which have:
• Negligible debt – Max 0.90 debt to avg 5 yr profits
• Minimum 45% Promoter holding
• 100% Unpledged promoter holding
• Reducing debt, +ve operations cash flows, -ve investment and finance cash flows
• Scale of manufacturing advantage . One of the top 3 companies by market share
• High CMP
• High ROE and ROCE
• Last priority to PE
Devang Kabra
 Corona Virus Reboot 2020
Sectors at Advantage Companies to watch / Buy
Niche Pharma Sanofi India IPCA labs
Granules India Alkem Labs
Alembic Pharma JB Chemicals & Pharma
Astrazenca Pharma

Big Pharma Abbott India Divis Labs

Torrent Pharma Pfizer

Pharma Chemicals Navin Flourine Alkyl Amines

Pharma Allied Industry GMM Pfaudler Amrutanjan Healthcare

Pathology & Testing Dr. Lal Pathlabs

Devang Kabra
 Corona Virus Reboot 2020
Sectors at Advantage Companies to watch / Buy
Medial Consumables Poly Medicure

Telecom Bharti Airtel

FMCG / Necessity supplies Avenue Supermarts Hindustan Unilever

GSK Consumer Healthcare

Agricultural Equipment Escorts

Infra EPC (Secondary Asian Paints Berger Paints

Demand)

Cement Coromandel Shree Cement

India Cements
Devang Kabra
 Corona Virus Reboot 2020
Sectors at Advantage Companies to watch / Buy
Ayurveda FMCG Dabur

Import Substitute Deepak Nitrite Atul ltd

(chemicals)
Pidilite Alkyl Amine
JB Chemicals and Pharma Navin Flourine

Import Substitute (Metals) APL Apollo Tubes Apollo Tricoat Tubes

Mishra Dhatu Nigam Ratnamani Metals

Job Work / Mass Amber Enterprises Tasty Bite

Manufacturing
Granules India Vinati Organics
JCHAC Honeywell Automation
Devang Kabra
 Corona Virus Reboot 2020
Sectors at Advantage Companies to watch / Buy
Insurance Nippon Life India

Family Weekend Phoenix Mills PVR Cinemas

Entertainment
Jubilant Food works

Packaging Essel Propack

Devang Kabra
 Corona Virus Reboot 2020
Sectors to Avoid Remarks

Banks / Financial Institutions EMI Defaults / Deferment on recent RBI policy

/ NBFC’s Heritage NPA resolution not yet over
Luxury Products Retail Companies and People will find their respective feet after
the lockdown normalizes. Priority to consume luxury
products and services will take a second priority.
Automobile Adjustments to the changed business scenarios after
Corona virus resolution will postpone passenger car
purchases.
General slowdown across globe will have an added effect.
Travel & Tourism Skeptical Consumers will take their own time to get back
to exploring the world.
Aviation The already struggling sector has now been completely
thrashed due to lockdown. The high debt companies will
now revive only on government support.

Devang Kabra
 Corona Virus Reboot 2020
Sectors to Avoid Remarks

Container Logistics Demand will reduce on account of reduced international

Companies trade; although on a temporary basis.

Developing nations like India will try and substitute

domestic production to reduce other country
dependability.
Ports Similar effect as stated above. High capital cost and long
payback period is not advisable for equity investments.
Power High debt power supply companies will bear the brunt of
demand slow down and add more pressure to the already
constrained cashflow.
Hotels & Hospitality Reduction in personal and corporate travelling because of
virus aftereffect as well as economic slowdown.

Devang Kabra
 Corona Virus Reboot 2020
Sectors to Avoid Remarks

Real Estate Cutting costs will immediately result in reduction of office

spaces and layoffs by companies.

The ‘work from home’ culture will take off and reduce
commercial real estate requirement.

Large spread between rent yield and EMI will correct and
cause the residential real estate prices to come down.

Investor community demand will be close to zero.

Consumer Durables, After effects of the real estate sector slowdown
Furniture, Sanitary fittings,
etc.

Devang Kabra