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Business News/ Markets / Delhi pollution: 16 stocks that stand to gain as air quality worsens to ‘severe’
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Delhi pollution: 16 stocks that stand to gain as air quality worsens to ‘severe’

Delhi AQI worsens: Air purifiers, health insurance, healthcare, renewable energy sectors in focus. Indraprastha Gas, Everest Kanto Cylinder may see a positive impact in short term.

Delhi PollutionPremium
Delhi Pollution

Rising concerns on air quality index, amidst high pollution levels have kept the National Capital Region of Delhi in the spotlight. As government is focusing on various measures to reduce pollution, the citizens' focus will also be towards 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, the rise in demand may be from select pockets, feels Baliga. Air purifiers are high-end products. The affordability of air purifiers by masses thereby remains a question.

Consumer durables stocks

The Consumer durables manufacturers, that have seen 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 key air purifiers and allied product manufacturers include Voltas, Havells, Symphony etc. in the listed space.

Insurance stocks

In addition to the air purifiers, the demand for healthcare policies may also see a rise feels Baliga. The insurance service providers benefitting from rising consumer awareness will see further benefits and the insurance penetration will rise, helping companies such as HDFC Life, ICICI Lombard, Star Health and allied Insurance company.

Healthcare stocks

The healthcare companies will be other key beneficiaries and may see a significant rise in demand for preventive medications. Vitamins and mineral supplements may see a rise in consumption while sales of other acute range of products such as respiratory care, anti-bacterial, pain relief and so on may see an uptick. The demand for acute range of products remained subdued in Q2 and hence some uptick may benefit pharma companies that derive higher share of revenues from domestic markets as Cipla, Sun Pharmaceuticals, Zydus Heathcare, Lupin, IPCA and so on.

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Besides Santosh Meena, Head of Research Swastika Investmart said we generally see some health concerns among people; therefore, we can expect a positive impact on stocks like Apollo Hospital, Max Healthcare, Dr Lal PathLab, Metropolis, etc.

Pollution, particularly during Delhi's winter season, remains a critical concern, prompting swift government responses, said Meena. In the short term, we observe primarily sentiment-driven effects on stocks linked to fossil fuels, power, and construction, with a negative trajectory. Conversely, stocks associated with renewable energy may witness a positive upswing he added.

With people facing health issues due to poor air quality, sectors such as pharma (Cipla), hospitals (Apollo Hospitals, Global Health) and diagnostic companies (Dr. Lal Pathlabs, Metropolis) are some of the direct beneficiaries, said Manish Chowdhury, Head of Research, StoxBox. Also, QSR companies and food delivery businesses could be indirect plays due to the restricted movement of people, added Chowdhury

However, as per Meena stocks like DLF, NBCC, Larsen & Toubro, M&M, and Ashok Leyland may see just a temporary negative impact, while stocks like Indraprastha Gas (IGL) and Everest Kanto Cylinder may see a positive impact in the short term.

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Compressed Natural Gas (CNG) that remains a cleaner and cost-efficient fuel may also keep finding favor. The CNG vehicles demand may remain strong as high pollution provides a trigger, Thus City Gas Distribution companies as Indraprastha Gas (IGL) may also see better investor confidence.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions

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ABOUT THE AUTHOR
Ujjval Jauhari
Ujjval Jauhari is a deputy editor at Mint, with over a decade of experience in newspapers and digital news platforms. He is skilled in storytelling, reporting, analysing and writing about stocks, investment ideas, markets, corporates and more. He is based in New Delhi.
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Published: 08 Nov 2023, 09:49 AM IST
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