Top 10 Stocks To Benefit From ‘Pent up Demand’ After Covid-19 Lockdown

“Pent up Demand”: Looking at brighter side of lockdown

The theory of Loss Aversion states that “pain of anticipated loss is quite higher than actual loss itself.”

If we corroborate the above theory with the present situation in markets, the theory is getting practised to a high degree. The end result is ferocious dislocation of stock prices in relation to its core intrinsic business value. Taking the current panic into account, there is strong uncertainty on how the future will pan out. However, if one looks at the brighter side of the situation, when it ends, will bring strong “pent up demand” across various sectors/business. Hence, there are several dislocated opportunities across the “pent up demand” theme.

Therefore, we list out a few companies that will be direct beneficiaries of the above theme. The universe of stocks that we would like to bet have the following in common:

Strong brands and products with established distribution network coupled with reasonable pricing power

Credible management and clean governance record, who have seen such turbulence in the past and have come out stronger from such a crisis

From a financial perspective, these companies have solid balance sheets coupled with ability to generate strong cash flows and comfortable leverage profile. More importantly, they have a track record of creating shareholder wealth across business cycles

Out top picks under this theme are Aditya Birla Fashion & Retail, Apollo Hospitals, Exide Industries, Gujarat Gas, Havells India, Kansai Nerolac, Shree Cements, VST Industries, TCI Express and United Spirits