The festive season has started with strong momentum in the stock market, and investors are now looking at which sectors could deliver the best returns in the coming months. Autos have already seen a sharp rally, while consumer durables, FMCG, PSU banks, and infrastructure are also emerging as areas to watch.
In the past month, auto stocks have led the rally, with individual companies rising between 15% and 30%. Maruti Suzuki has touched a record high, supported by strong demand and favourable policy changes. Market capitalisation in the auto space has added nearly Rs 1 lakh crore during this period. Maruti alone has been one of the biggest winners from GST changes, gaining about 26% in the last month.
AUTO SECTOR STILL ATTRACTIVE
According to Devarsh Vakil of HDFC Securities, auto demand will remain strong as several factors align in favour of the sector. Lower interest rates, GST cuts, better monsoon, and softer input costs are expected to support margins.
“We actually prefer the two-wheeler and the tractor side of the markets. Most OEMs are suggesting mid-single digit growth. For 2025, Maruti was one of our yearly picks and we still see 30-40% upside from current levels. On the commercial vehicle side, Ashok Leyland could see 20-25% upside. Investors can also look at TVS Motors and Eicher Motors,” Vakil said.
CONSUMER DURABLES AND FMCG IN FOCUS
Beyond autos, consumption-oriented sectors are also expected to gain during the festive season. With GST cuts and lower borrowing costs, urban demand is showing early signs of improvement.
Vakil said, “We are expecting a good second half for companies in FMCG and consumer durables. Stocks like Crompton Consumer and Symphony have higher target prices under our coverage. These can be considered by investors who want to participate in festive demand-led growth.”
PSU BANKS, CEMENT AND PHARMA EMERGING STRONG
For longer-term investments, Vakil suggested looking beyond the festive season into sectors supported by structural reforms.
“PSU banks look attractive with earnings growth potential and possible mergers. Cement companies are also expected to perform well, especially in the eastern and northeastern regions, as demand is strong and GST cuts help reduce costs. Pharmaceuticals, too, are a sector to watch,” he said.
LARGE CAP VS MID CAP VS SMALL CAP
Investors are also debating whether to focus on large, mid, or small-cap stocks. Vakil advised that the choice depends on risk appetite and investment goals.
“Large caps are stable, easy to track, and less risky. But mid and small caps offer higher growth potential. At the start of the year, we were cautious on mid and small caps. But now, we feel investors can take more risk and consider a balanced approach with an equal mix of large, mid, and small caps,” he explained.
The festive season often boosts demand across sectors, and this year the rally has already started in autos. Experts believe consumption-led sectors like FMCG and consumer durables, along with PSU banks, cement, and pharma, could be strong picks. Investors, however, are advised to align their choices with their risk appetite, balancing long-term stability with the potential for higher returns.
(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)
