Summary
Many times, defensive stocks are used on the street. Mostly FMCG, Pharma and other stocks are referred as defensive stocks. The reason is that the demand for these companies is stable and is not affected much even if there is any slowdown in the economy. The question is, in a fast-growing economy, where new consumption areas are coming up every second day, where seasonal and cyclical demand has reached a point where it is above single digits in all economic conditions, isn’t that even? Defensive and rated accordingly. The Indian economy may have reached a point where the demand for tiles, ceramics and building materials, ex-cement, has reached a point where it will not go down at worst.
Among the sectors that were re-evaluated at the start of the bull run in 2014, when Modi 1.0 was launched, some selected sectors related to housing were re-evaluated. The reason was that when the economy saw a recovery, the costs of home construction and improvement were expected to rise. Also, government spending on building infrastructure, which is expected to increase, will definitely decrease.
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