Ideal way to prepare portfolio of companies involved in gold business!

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Indian markets are trading at record high. On September 11th, Nifty achieved a milestone by crossing the 20,000 mark. In just 36 trading sessions, Nifty has reached a record high again. Prior to this, Nifty had touched a record high of 19,991.85 on July 20th. On September 12th, Nifty reached a record high of 20,110 as well. What is the reason behind this rapid rise in the market?Well, there are several reasons behind this buying spree. One of them is the expectation of strong demand during the festive season. So, if there is an anticipation of increased demand during the festive season, which stocks will benefit from this? And how can you invest in them? Let’s find out.

Announcements made during the G20 summit, improvements in bank loan growth, a decrease in vegetable prices leading to hopes of lower inflation, and a market sentiment boost from monthly investments of over 15,000 crore rupees through SIP for the past 2 months, despite foreign institutional investors selling off is driving the market.

But apart from all this, there’s another factor. And that’s the festive demand. It is believed that this time, the festive demand could be quite strong, which will have an impact on the results of companies in the second and third quarters. In India, the festive season usually begins with Raksha Bandhan, which extends until Christmas on December 25th. But this year, Raksha Bandhan was on 30th August and PM Modi announced during the G20 summit that this year, festive season started from August 23rd, coinciding with the successful landing of Chandrayaan-3.

During the festive season, especially due to Diwali, Dussehra, Christmas, and weddings, we typically see an increase in demand. A significant portion of shopping during weddings is related to jewelry, especially gold. So, companies engaged in the business of gold jewelry or any form of gold-related business. These primarily include companies like Titan, Senco Gold, Rajesh Exports, Kalyan Jewellers, Thangamayil Jewellery, Goldiam International, Manappuram Finance, and Muthoot Finance. Some of these companies are leaders in their respective sectors and are performing well, which is reflected in the returns of these companies.

The best part is that companies involved in gold-related businesses typically do not face crises because they have gold reserves as a safety net, especially companies like Manappuram and Muthoot Finance, which are involved in gold loan businesses.

Arun Mantri, the founder of Mantri FinMart, believes that during the festive season in India, gold is the most purchased precious metal after automobiles and electronics. It is considered auspicious, and investing in it is a good strategy for the future.

Now, the question is whether it’s possible to create a golden portfolio by investing in the shares of these companies? If yes, how can such a portfolio be constructed? Arun Mantri suggests that there is expectation of buying in the gold market during this festive season. Therefore, companies in precious metals and gold financing will remain on the market’s radar. Among these companies, Titan, Thangamayil, and Kalyan Jewellers are some of the top picks. And we also have expectations of good performance from Muthoot Finance and Manappuram, which provide gold loans.

Overall, it can be said that to take advantage of the increasing demand for gold during the festive season, you can create a golden portfolio for the long term by investing in companies related to the gold business, in addition to investing in physical gold itself.