Unlock theme stocks are in focus on Dalal Street once again with the lifting of COVID-related restrictions in parts of the country. Through the three waves of the coronavirus pandemic, restrictions imposed to curb infections have led to wild swings in stocks from spaces such as restaurants and hotels, tourism, cinema and consumption.
Are the best opportunities in the unlock theme now behind? Most analysts think so. They believe the unlock theme is already approaching a climax on the Street.
"Given the strong growth and rebound in demand reported in the previous quarter, stock prices seem to have already factored in the fast recovery... The pandemic has certainly led to constructive changes in the business models of many companies linked to the unlock theme and these are expected to bode well in the long term," Yesha Shah, Head of Equity Research at Samco Securities, told CNBCTV18.com.
Yet, there may be spaces investors can bank on.
Shah's advice: Investors should keep a long-term horizon and seek out opportunities in quality names within the theme, where the multiples have room to expand and the risk-reward has turned favorable amid correction.
"There are multiplexes and hotels focusing on asset light models in order to improve their margins as well as to drive faster expansion," she pointed out.
And she's not the only one eyeing themes within the unlock play.
"Hotels as an industry look very good at the current juncture... Otherwise, everything related to the unlock theme has played out or might correct due to price increases," AK Prabhakar, Head of Research at IDBI Capital Markets, told CNBCTV18.com.
In the current scenario, he likes Indian Hotels, Mahindra Holidays Resorts, Chalet Hotels, PVR and Inox Leisure.
Here's how some of these stocks have performed in the past one year:
| Stock | Change (%) |
| Specialty Restaurants | 221.4 |
| IRCTC | 130 |
| Oriental Hotels | 100.6 |
| Indian Hotels | 62.4 |
| Chalet Hotels | 57.9 |
| Mahindra Holidays | 39.4 |
| Thomas Cook | 34.9 |
| EIH | 34.2 |
| Inox Leisure | 33.3 |
| Lemontree | 22.9 |
| PVR | 20.1 |
| Godfrey Philips | 13.9 |
| ITC | 5.9 |
| Jubilant FoodWorks | -2.8 |
| Westlife Development | -7.9 |
| Restaurant Brands Asia | -26 |
Indian equity benchmarks have come within one percent of their all-time highs reached in October 2021, and retreated thanks to heightened geopolitical tensions after Russia's invasion of Ukraine, and fluctuations in crude oil. A near one-sided 18-month-long run in the Indian market till October 2021 had taken equity valuations in many pockets to unprecedented heights. 
The Russia-Ukraine conflict sent the India VIX index -- also known as the fear gauge -- soaring to levels last seen 20 months ago.
And the wild swings in the markets came amid predominant fears about faster-than-expected rate hikes. Any aggressive rate increases in the developed markets such as the US may worsen foreign institutional investor outflows from emerging markets such as India.
It was not so long ago that hopes around the reopening of economy and the return to normalcy from the ravages of the pandemic were playing out in a big way.
A missed bus indeed
Right now, there is positivity all around as far as the end of COVID is concerned, and unlock theme stocks may not provide the biggest bang for your buck. That is the message from Rahul Shah, Co-Head of Research at Equitymaster.
"It is said that in the stock market, you either get good news or good prices but never both. So, if the news is good, chances are that it is already reflected in the stock prices," he told CNBCTV18.com.
The time to bet on unlock theme stocks was "when negativity (with respect to COVID-19) was at its peak and when there was fear all around", he explained.
"This doesn't seem to be the case currently. In fact, smart money is perhaps already moving in the other direction with sectors such as technology correcting more than others," added Shah.
First Published: Mar 1, 2022 5:48 PM IST
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