Top 10 Best Summer Stocks in India

With the rising heat and scorching sun, a different kind of buzz begins to form in the Indian stock market, the buzz around summer stocks. As our bodies acclimatize to warmer temperatures, there are certain companies that experience an increased demand for their products and services. Now that we know why the mid-year period sparks growth, we can focus on the companies that you should consider investing in during summers. 

In this blog, we will discuss the top 10 summer stocks in India, their overview along with benefits and disadvantages of investing in them.

What is Summer Stock?

Summer stocks, or stocks for summer season refer to the shares of the companies which experience a boost in their sales during summers. The reason for this increase in sales is the fact that people spend money on the products that help them beat the scorching sun.

Just think about the hot scorching sun. While standing outside under the glaring heat the first thing that the majority of people think of is:

• Cooling Appliances: During summers, appliances such as air conditioners, refrigerators, and air coolers literally become lifesavers and are bought by many. As a result of an increase in demand, companies that manufacture such appliances witness a rise in their revenues.
• Beverages: During summers, juices and cold drinks are consumed much more than compared to any other season. Want to cool off with something refreshing? Each sip of juice on a hot day helps people stay cool, not to mention that they even taste amazing.
• Power & Utilities: The use of electricity generally increases with the increased usage of refrigerators, air conditioners, etc., hiking the revenues of the power & utilities sector as well.

Firms in these sectors tend to enjoy a boom in revenues and profits during this time, which in turn can be beneficial for their stock prices. 

Top 10 Summer stocks to keep an eye on!!

Company Name	Current Price (₹)	Market Cap (₹ Cr )	52 Week High (₹)	52 Week Low(₹)
Varun Beverages Ltd	522	1,76,410	544	381
Havells India Ltd	1,272	79,812	1,633	1,142
Dabur India Ltd	450	79,825	577	401
United Breweries Ltd	1,484	39,239	2,245	1,401
Voltas Ltd	1,506	49,831	1,582	1,186
Blue Star Ltd	1,890	38,866	2,050	1,450
Amber Enterprises India Ltd	8,134	28,625	8,626	5,400
Whirlpool of India Ltd	1,003	12,726	1,474	756
Bosch Home Comfort India Ltd	1,425	3,876	1,854	1,021
Epack Durable Ltd	297	2,856	415	196

Read Also: Best Air Conditioners Stocks in India

Overview of Best Summer Stocks in India

An overview of the best summer stocks in India is given below:

1. Varun Beverages Ltd

One of the world’s largest franchisees of PepsiCo is Varun Beverages Ltd. which manufactures, distributes and sells carbonated soft drinks, juices and even packaged drinking water. During summer they perform better because everyone associates the summer season with higher consumption of refreshing beverages. VBL sells beverages under some of the leading brands such as Pepsi, Mountain Dew, 7UP, Slice, and Aquafina which significantly bolsters their revenues and profitability.

Know the Returns:

1Y Return (%)	3Y Return (%)	5Y Return (%)
0.17%	77.81%	532.57%

2. Havells India Ltd

Havells India is a company in the electrical equipment sector and they manufacture switchgear, cables and wires, electric motors, fans, home appliances, and even air conditioners which are sold under Lloyd brand. Havells benefits from the summer season primarily through increase in sales of fans and air conditioners (Lloyd brand). The temperature rise translates directly into a rise in demand for cooling fans and air conditioners. Furthermore, other electronic products offer sustained demand due to infrastructure spending and consumer spending on homes.

Know the Returns:

1Y Return (%)	3Y Return (%)	5Y Return (%)
-20.64%	3.96%	22.06%

3. Dabur India Ltd

Dabur India is one of the oldest and leading Ayurvedic and natural healthcare brands in India. Its range of products include health care, personal care, and food items. During hot seasons certain items from Dabur’s vast product portfolio witness a rise in demand. Beverages such as fruit juices, glucose based drinks, etc. experience heightened demand as people try to beat the heat. It was founded by S.K. Burman in 1884 and has its headquarters in Ghaziabad.

Know the Returns:

1Y Return (%)	3Y Return (%)	5Y Return (%)
-6.94%	-15.35%	-17.07%

4. United Breweries Ltd

It is one of the largest manufacturers and sellers of beer in India. It is a subsidiary company of Heineken. They are well known for their Kingfisher brand and other alcoholic beverages. Reasons for increase in revenues during summers is due to the hot weather which typically leads to increased consumption of alcoholic drinks. Social gatherings and outdoor events tend to increase sales volume for UBL which, in turn, helps boost their revenues. 

Know the Returns:

1Y Return (%)	3Y Return (%)	5Y Return (%)
-30.24%	1.87%	25.05%

5. Voltas Ltd

It is part of the Tata group and has one of the highest market share in the air conditioning segment. They are known for a variety of room air conditioners, commercial refrigeration equipment, refrigerators, etc. During summers Voltas’ stocks performs well as it has dominant market share in India for AC’s. The rise in summer heat increases the demand for air conditioners. The company’s extensive distribution network and strong brand presence make them a consistent favorite among summer stocks. 

Know the Returns:

1Y Return (%)	3Y Return (%)	5Y Return (%)
22.98%	85.89%	52.28%

6. Blue Star Ltd

It is one of the leading Indian multinational companies engaged in the design, manufacture and distribution of air conditioning systems and commercial refrigeration systems. They have a product line that includes room air conditioners and central air conditioners, water coolers, and water purifiers. 

Blue Star enjoys higher revenue volumes during periods of increased temperatures as their main source of revenues is by selling cooling products and services. The onset of summer is accompanied by higher demand for ACs, refrigerators, and water coolers from both the commercial and residential sectors, which translates to significantly higher revenues.

Know the Returns:

1Y Return (%)	3Y Return (%)	5Y Return (%)
6.89%	156.86%	334.77%

7. Amber Enterprises India Ltd

It is a well-known manufacturer of air conditioners and its related components (OEM or ODM) for various brands in India. They are also engaged in manufacturing of other consumer durable components also. Amber Enterprises works as an OEM (original equipment manufacturer) for some of the major air conditioning companies and thus stands to gain from the overall surge in sales. During peak summer season, their clients witness an increase in demand for ACs and related components, which translates to increased sales and profits for Amber Enterprises. This role qualifies them as a strong summer player due to their strategic position in the air conditioning value chain.

Know the Returns:

1Y Return (%)	3Y Return (%)	5Y Return (%)
27.32%	342.24%	151.38%

8. Whirlpool of India Ltd 

Whirlpool of India Ltd is a subsidiary company of Whirlpool Corporation, which is one of the top companies in the home appliances sector. The company deals in various domestic appliances like refrigerators, washing machines, microwaves, and air conditioners. Their stock generally rises during summers as the company deals in air conditioners and fridges that are primary revenue drivers in the summer season. 

Know the Returns:

1Y Return (%)	3Y Return (%)	5Y Return (%)
-13.25%	-24.13%	-54.47%

9. Bosch Home Comfort India Ltd

Bosch Home Comfort India Limited manufactures air conditioners, chillers, VRF systems, and refrigeration products for residential and commercial use. The company focuses on energy-efficient cooling solutions backed by strong Bosch technology. With growing demand for climate solutions in India, it offers steady potential, making it a noteworthy stock to watch.
Its expanding product portfolio and brand strength further support long-term growth opportunities in the Indian cooling market.

Know the Returns:

1Y Return (%)	3Y Return (%)	5Y Return (%)
-20.19%	25.19%	-41.21%

10. Epack Durable Ltd

It is one of India’s leading Original Design Manufacturers (ODM) and Original Equipment Manufacturers (OEM) of room air conditioners and small home appliances. They also provide component manufacturing services for these appliances. Like many other businesses, EPACK Durable forms an integral segment of the AC manufacturing ecosystem. The small appliances under their diversified product range also offer some protection from seasonality.

Know the Returns:

1Y Return (%)	3Y Return (%)	5Y Return (%)
-17.57%	34.32%	33.54%

Taking advantage of summer stocks can be a unique strategy to profit during the peak summer season. Regardless, it is wise to conduct a thorough fundamental analysis on the company and consult a financial advisor before investing. 

Key Performance Indicators (KPIs)

Company Name	Net Profit Margin (%)	ROE (%)	ROCE (%)	Debt to Equity Ratio
Varun Beverages	13.17	15.62	20.86	0.14
Havells India	6.75	17.68	22.51	0
Dabur India	13.84	16.36	20.31	0.07
United Breweries	4.96	10.12	14.49	0.13
Voltas	6.23	12.91	19.29	0.13
Blue Star	4.95	19.28	24.82	0.07
Amber Enterprises India	2.81	10.65	15.72	0.85
Whirlpool of India	4.58	9.08	11.47	0
Johnson Controls-Hitachi Air Conditioner India	2.13	9.17	12.10	0
EPACK Durable Ltd.	2.67	5.79	12.62	0.39

Read Also: Best 5G Stocks in India to Invest

Benefits of Investing in Summer Stocks in India

Various benefits of investing in summer stocks in India are:

• Expected Rise in Demand: The surge in demand for specific goods and services during the summer season stands out as the most prominent benefit of investing in these stocks. The makers and sellers of air conditioners, refrigerators, fans, beverages, ice-creams, etc. enjoy a seasonal spike in sales. 
• Possibility for Short-term Gains: Summer stocks can provide quick returns for those investors looking for short-term profits. Purchasing these stocks during the offseason and selling just after the summer season can lead to quick profits due to stock price appreciation associated with the increased demand.
• Portfolio Diversification : Integrating a seasonal aspect with your portfolio holdings up to some extent may help in diversification. Inclusion of these summer stocks can reduce the overall volatility of one’s portfolio, if these stocks rise independently of broader market movements. 

Disadvantages of Investing in Summer Stocks in India

Some of the disadvantages of investing in Summer stocks in India are:

• Change in Weather Patterns : If the temperature is on the milder side or if there is unseasonal rain; the demand for these products can plummet, severely impacting sales and profitability. This makes these firms extremely sensitive to weather fluctuations.
• Increased Competition and Price Wars: The summer season creates a surge in demand for air conditioners, beverages, etc., leading to fierce competition among companies. Heavy discounts, advertising, and attractive offers may lead to increased sales, but prevent the company from operating with their usual profit margins.
• Inventory Management Challenges: Such companies face inventory management challenges as unexpectedly mild summers can lead to overstocking and holding costs. This can hurt profits and result in poor stock performance.
• Short-Term Trading Risks: Quick gains are always accompanied by increased risks due to which it is necessary to stay updated about the weather and market conditions.

Conclusion 

Summer stocks often present unique prospects for market participants who are willing to invest based on the seasonal increase in demand of a company’s goods and services. The demand for cooling appliances as well as refreshment beverages soars during the summer months. Like any other investment strategy, it is crucial to know the risks. Regardless of competition, buying these shares for short intervals means the trader needs to be smart and have incredible precision about when to buy and when to sell. Although summer stocks can contribute to portfolio diversification, never forget the importance of risk management. It is advised to consult a financial advisor before investing.

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