India is all set to welcome the festive season, with analysts noting which sectors and stocks may benefit as the domestic consumption engine speeds up amid a stellar and cherished lineup of festivities.

Every year, the festive season shines up with Ganesh Chaturthi, with the crescendo building up through Navratri and Durga Puja, and the finale landing on Dhanteras and Diwali before the wedding season takes over. This is accompanied with higher footfalls, orders, ticket sizes and margins.

This year’s festive season comes at a crucial juncture. Following the outbreak of the US-Iran conflict earlier this year, oil prices have seen a skyrocketing rally and spiked inflationary worries. Bajaj Broking in its monthly outlook report highlighted that this has increased input cost pressures and injected fresh uncertainty into corporate and consumer decision-making.

Over the last two months, most of the market commentaries pointed towards a stronger consumer demand during the festive season despite implications of the war, the domestic brokerage however noted, adding that consumer companies, retailers, automobile manufacturers and e-commerce platforms are broadly preparing for high single-digit to low double-digit growth in festive demand, supported by urban consumption resilience, easier financial conditions and the continued premiumisation trend across product categories.

What’s boosting hopes for a strong festive season?

While concerns prevail, urban demand continues to remain resilient. Strong employment conditions in services sectors, healthier household balance sheets and moderating borrowing costs are expected to support discretionary spending, the domestic brokerage said, adding that retail financing, consumer durable loans, vehicle financing and credit card spending typically accelerate during the festive period, amplifying purchasing power.

At the same time, aggressive promotional campaigns from retailers and e-commerce platforms are likely to stimulate sales across categories ranging from smartphones and electronics to apparel and home improvement products, it added.
“Demand across premium automobiles, smartphones, jewellery, travel, hospitality and branded apparel has consistently outpaced mass-market segments as higher-income consumers remain relatively insulated from inflationary pressures. Market commentaries suggest that nearly 45% of consumers intend to increase festive spending this year, with purchase intentions strongest for jewellery, home appliances and personal gadgets,” Bajaj Broking said.

Which sectors will outperform this festive season?

Further, it believes e-commerce is also expected to remain a major beneficiary of increased demand during the festive season. India’s festive shopping ecosystem has become increasingly digital, with Tier- II and Tier-III cities emerging as powerful demand centres. Industry studies indicate that smaller cities now contribute a disproportionately large share of festive online demand, reflecting improving internet penetration, digital payments adoption and logistics infrastructure.

From an investment perspective, Bajaj Broking believes that the festive season represents an important test of earnings momentum for the second half of FY27. Strong festive demand would support corporate revenue growth across retail, consumer discretionary, automobiles, hospitality and financial services. Conversely, any weakness in rural spending, combined with inflationary pressures, could temper earnings expectations and keep margins under pressure, according to the brokerage.

Ahead of the festive season, Sunny Agrawal, Head of Fundamental Research at SBI Securities, says that investors should focus on consumer facing non banking financial companies (NBFCs), like the ones who focus on auto, home loan and gold loan, along with auto and auto ancillary, consumption especially discretionary like jewellery, travel, hotel, QSR, fashion brands, as well as home improvement solution providers like paints, tiles, etc.

“For equity markets, a measured and selective approach remains appropriate in the near term. Valuations in several consumer-facing segments already discount a meaningful demand recovery, leaving limited room for disappointment. Furthermore, developments in crude oil prices, inflation trends and monsoon outcomes will continue to influence market sentiment and earnings expectations over the next few months,” Bajaj Broking concluded.

Overall, Bajaj Broking feels that consumer durables and retail have very higher sensitivity to festival season, followed by automobiles and private banks or NBFCs. Hospitality has a medium-high sensitivity, while that for FMCG is medium and low for IT services.

10 stocks that will remain in spotlight

Shrikant Chouhan, Head Equity Research at Kotak Securities, listed out 10 stocks on which the brokerage has a positive view ahead of the festive season, amid expectations of a surge in discretionary spending.

1. M&M

M&M is expected to continue outperforming industry growth across tractor and CV segments and a strong product launch cycle should help sustain SUV segment leadership, Chouhan said. He noted that the company aspires its SUV segment volumes to grow by mid-high teens yoy in FY27E. LCV cycle is also likely to continue its momentum, which aids well for the company. “M&M continues to execute well by maintaining a leadership position in all three segments, an improvement in return ratios and cash flow generation,” the analyst further highlighted.

2. Eicher Motors

The analyst expects Royal Enfield’s domestic volume growth momentum to continue at a healthy pace, and believes that the capacity expansion along with model launches augurs well for the company. A potential entry into the 250 cc segment could further widen the addressable market and attract younger consumers, he said, adding that the aspirational nature of brand and growing disposable income should benefit Royal Enfield’s demand. “We expect gradual improvement in profitability, driven by price increases, value engineering and control over other costs,” he further said.

Also read | Which auto stocks should you buy after August sales? Here are Nomura, other brokerages’ top picks

3. Eternal

Zomato and Blinkit-parent Eternal is a leading Indian internet company operating food delivery, quick commerce (Blinkit), going-out (District), and B2B supplies (Hyperpure), Chouhan noted, adding that the company is transforming into a diversified consumer-tech platform, with Blinkit emerging as the key growth engine. “We expect Eternal to deliver a robust 49% revenue CAGR over FY26–29E, led by rapid expansion in quick commerce and sustained growth in food delivery. As scale improves and operating leverage strengthens, we forecast EBITDA margins to expand from 2.2% in FY2026 to 5.3% in FY29, driving a meaningful improvement in profitability,” he wrote.

4. Nykaa

FSN E-Commerce Ventures’ Nykaa is a leading omnichannel beauty, personal care and fashion retailer with a growing portfolio of owned brands. The company expects strong long-term growth, driven by premiumization, AI-led personalization, faster deliveries, category expansion, and continued investments in customer acquisition, Chouhan noted, adding that improving operating leverage and the scaling up of its beauty, fashion, and owned-brand businesses are expected to support profitability. “We remain positive on the stock given its strong growth outlook and improving earnings profile.”

5. Apollo Hospitals

Apollo Hospitals remains Kotak’s preferred hospital pick. “We like the combination of strong existing-hospital performance, manageable capacity expansion, improving pharmacy profitability and the approaching digital breakeven. Valuations appear reasonable for the quality and growth visibility,” said Chouhan.

6. Dr. Lal PathLabs

Dr. Lal PathLabs is one of India’s leading diagnostic chains, offering pathology and preventive healthcare services through its extensive network of laboratories and collection centres. The analyst from Kotak Securities noted that the company is seeing a steady recovery in test volumes, with Q1FY27 sample volumes growing 11% YoY. Realization per test also increased around 8%. The turnaround in Suburban Diagnostics and calibrated network expansion should further support volume growth, he said. “With management now expecting mid-teens revenue growth in FY27, we expect sales and earnings to remain on a healthy trajectory, with EBITDA and adjusted EPS CAGR of 16% and 15%, respectively, over FY26-29,” he added.

7. ICICI Bank

Adding to the slew of bullish brokerage calls for ICICI Bank, Shrikant Chouhan noted that the company has delivered best-in-class underwriting and resilient asset quality, with net NPLs at historical lows. Strong liability franchise and pricing discipline should support NIM resilience, while loan growth recovery and operating leverage provide scope for sustained 15% RoE, he added.

Also read | Explained: What $127 billion FCNR(B) inflows mean for ICICI Bank, HDFC Bank, other bank stocks

8. Axis Bank

Naming Axis Bank as another festive pick, Chouhan said the lender’s retail franchise offers significant growth potential through mortgages, affordable housing, gold and education loans. Technology-led execution and improving branch productivity should drive operating leverage, while lower credit costs and better loan mix provide a path toward improving RoE and potential valuation re-rating.

9. Shriram Finance

The recent MUFG capital infusion and AAA rating upgrade provide a structural funding advantage to Shriram Finance, according to the analyst from Kotak Securities. He noted that lower borrowing costs and improved leverage should support margin expansion and 16% medium-term RoE. Strong asset-quality performance and shift toward newer, lower-risk vehicles support sustainable 17-18% medium-term AUM growth, he further said.

10. Bajaj Finance

Strong 22% AUM growth demonstrates continued momentum across its diversified lending franchise were the key factors highlighted by Chouhan as he named Bajaj Finance as one of his festive picks. He noted that declining credit costs and Fin-AI-led operating leverage should support RoA expansion, while 21-26% medium-term earnings growth and 19-20% RoE offer a compelling growth-profitability combination.

Why caution is warranted

However, the outlook is not risk-free. Monsoon is the most immediate concern, according to Bajaj Broking. It noted that India’s southwest monsoon has underperformed expectations, with cumulative rainfall running nearly 14% below normal by the end of August. Additionally, nearly 47% of India’s districts have received deficient or large-deficient rainfall, according to IMD data.

While agriculture is the obvious victim to deficient rainfall, the implications extend well beyond agriculture. Rural India accounts for a substantial share of demand for two-wheelers (at about 55-56%), entry-level automobiles (50%), consumer durables (6-7%), FMCG products (51%) and discretionary purchases (45%) during the festive season, the brokerage said, adding that a weaker kharif harvest and lower farm incomes could weigh on spending sentiment across large parts of the country.

Inflation is another key variable. The combination of elevated crude oil prices, supply-chain disruptions and weather-related pressures on agricultural output poses an upside risk to inflation during the festive quarter, according to Bajaj Broking.

Also read |Bigger market crash ahead? Analysts weigh how Sensex, Nifty may react if US 10-year bond yield touches 5%

(With inputs from agencies)

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

The US may be the bigger trading partner, but Canada shouldn’t be counted out quite yet in the escalating trade war between the two countries.

It is the top customer for 26 US states, including Maine, Michigan, and Wisconsin, as well as being in the top three for 45 of the 50 American states – suggesting Prime Minister Mark Carney has room to manoeuvre in a trade fight.

BBC’s Jessica Murphy explains how Canada has more leverage than it may seem in the spiralling dispute.

Read the latest on the escalating tariff fight here.

Video by Eloise Alanna.

Docusign DOCU 3.70%increase; up pointing triangle raised its sales outlook for the second time this year, citing a boost from artificial intelligence-related demand.

The digital document-signing platform said Thursday it now expects annual revenue to be $3.50 billion to $3.51 billion, up from its previous guidance of $3.49 billion to $3.50 billion.

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After foreign currency non-resident (bank) or FCNR(B) scheme closed in August with a bumper accretion of more than $127 billion, Jefferies said small private banks and NBFCs will benefit more while noting that the overall banking sector may see an earnings boost to the tune of Rs 10,000-11,000 crore.The bumper collections have taken the total inflows from such special schemes so far to $136.4 billion, according to provisional data released by the RBI. The scheme was launched in June to boost dollar inflows and strengthen foreign exchange reserves, allowing banks to swap eligible overseas borrowings with the central bank at concessional rates, significantly lowering their cost of funds.

While fortnightly data on credit growth won’t change much as it captures domestic credit, Jefferies noted that banks’ balance sheet credit growth can improve by 3-4 ppt as it captures the leverage provided by banks from foreign branches. For the banking sector, Jefferies expects domestic credit growth to moderate from 18% now to 15% by March 2027 as base resets in December 2026 and supply from bonds and ECB normalise.

The strong FCNR(B) inflows meanwhile can lift deposit growth from 12% pre FCNR-B to 17% (currently at 15%), Jefferies said, adding that it expects slight normalisation by the end of March 2027 to 16%. Fortnightly LDR data meanwhile will likely fall from 83% pre-FCNR-B to 80% (82% now), the international brokerage said.

What happens to banks’ margins?
Net interest margins (NIM) for banks will likely fall in the second quarter due to a timing gap in the placement of banks’ fund-raising, Jefferies said in its latest report. It added that banks are likely to quantify the short-term non-recurring impact on NIMs in their earnings print for Q2. Structurally, FCNR-B is a lower NIM business due to the double-counting of deposits and assets, and the first leg makes a 10-15 bps spread, the analysts added.
While FCNR-B deposits dilute NIMs and return on assets (ROA), they are accretive to net interest income (NII) and return on equity (ROE), Jefferies said. In fact, it estimates that at the sector level, it may boost earnings by Rs10,000-11,000 crore, annually, which is 2% of PBT. “We feel it’s better to see from the lens of an incremental profit pool, instead of margins. We feel banks may be able to normalise margins over 2-4 quarters by reducing dependence on high cost wholesale deposits, reducing share G-Secs that is held towards LCR and lower share of low-margin overseas trade financing.
Also read | Explained: What $127 billion FCNR(B) inflows mean for ICICI Bank, HDFC Bank, other bank stocks

Nomura says FCNR(B) scheme gives forex firepower to RBI

Nomura in its note said that the bumper finale to the FCNR(B) scheme has given the RBI ample foreign exchange reserves firepower, adding that the challenge now is how it will mop up the surplus liquidity. It expects this to boost the balance of payments surplus to $66 billion in FY27 from a deficit of $23.6 billion in FY26.

Motilal Oswal Financial Services meanwhile said that the record high FCNR(B) inflows have backed its estimates of a 150 bps increase in system credit growth to 15.5-16% for FY27. It noted that ICICI Bank mobilised $17.9 billion, capturing 14% market share of the total FCNR(B) inflows. SBI has garnered $9 billion a few days prior to the close and is expected to beat its $10 billion guidance. RBL Bank has added $3.4 billion, capturing 2.7% share, better than its deposit market share of nearly 0.5%.

“FIIs, who were on a selling spree before the FCNR(B) deposit scheme, have added net inflows of $4.8b in the last two months, while INR depreciation against USD has also stabilized,” Motilal noted. While net interest margins are expected to be under pressure in the near term on account of limited spread on the overseas leveraged portion of FCNR(B) deposits, the deployment of these deposits and an improving asset mix will drive faster balance sheet growth and support earnings, according to the domestic brokerage.

Also read | Which stocks should you buy ahead of the festive season? Here are Kotak Securities’ top 10 picks

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

TOKYO — Japanese physicians say the debate over popular weight-loss injections has been aimed at the wrong target. Stopping off-label prescriptions and black-market sales is necessary, they argue, but it will not prevent the most serious harm if people keep starving themselves while the drugs suppress appetite.

In an editorial published Aug. 26 in Diabetology International, researchers led by Wataru Ogawa of Kobe University wrote that “inappropriate use” of GLP-1 and dual GIP/GLP-1 medicines should be judged on two tracks at once: whether the drug was obtained legally, and whether the weight loss itself was medically safe.

“We argue that inappropriate use should be understood from two complementary perspectives: regulatory appropriateness and medical appropriateness,” they wrote. Medical appropriateness, they added, “encompasses not only drug-related risks but also the safety of weight reduction itself.”

The warning follows a cluster of Japanese hospital reports in which young women without type 2 diabetes developed ketosis or ketoacidosis after using tirzepatide, the active ingredient in Mounjaro and Zepbound. The three patients cited in the editorial were 21, 21 and 23 years old. Two were not obese when they started the drug. The third began treatment with a body mass index of 30.2 and had already fallen to 21.9 by the time she was hospitalized. None of the reports documented nutritional counseling or ongoing medical supervision.

Two of the women were on the lowest weekly dose, 2.5 milligrams. The third had moved up to 5 milligrams after four weeks at the starting dose. One case involved deliberate carbohydrate restriction. In all three, the authors said, “inappropriate dietary restriction during weight-loss attempts may also have contributed.”

The distinction matters because GLP-1-based drugs are already known for nausea, vomiting, diarrhea and constipation. Those gastrointestinal effects can quickly cut food intake. Combined with a crash diet, the result can be starvation metabolism: the body burns fat so fast that ketone acids accumulate in the blood. That pathway is different from classic diabetic ketoacidosis, and it can appear even when blood sugar is normal or only mildly high.

Published case reports fill in the clinical picture the editorial summarized. In one, a 21-year-old Japanese woman with obesity started weekly 2.5-milligram tirzepatide while restricting carbohydrates, lost 21 kilograms in a month, then arrived in an emergency department with hypoglycemia and severe metabolic acidosis after persistent vomiting. Intravenous glucose corrected the acidosis within 12 hours; she did not need insulin. In another, a 23-year-old woman who was not obese obtained 2.5-milligram tirzepatide from an aesthetic clinic, gave herself a second dose, and developed nausea, vomiting and diarrhea. Tests showed high-anion-gap acidosis and sharply elevated ketone bodies. A third report described a 21-year-old who bought tirzepatide through an online service, dropped from 47 kilograms to 41 kilograms, and was later found to have anorexia nervosa after presenting with starvation ketosis.

Ogawa and colleagues said those events should not be dismissed as rare quirks of one molecule. Tirzepatide and related drugs cause weight loss mainly by reducing appetite. That happens whether the prescription is on-label for obesity or type 2 diabetes, off-label for cosmetic slimming, or obtained through an unofficial channel. The authors wrote that many of the worst metabolic complications “may reflect unsafe weight-loss practices rather than the intrinsic pharmacological toxicity of the drug,” while adding that drug toxicity remains a separate concern.

Japan’s reimbursement rules help explain why diversion has become a political issue. Wegovy, a semaglutide product approved for obesity, and Zepbound, tirzepatide approved for obesity, are covered only at specialized institutions and only after a structured six-month lifestyle program. Mounjaro contains the same tirzepatide molecule but is reimbursed for type 2 diabetes without those obesity-program gates. Japanese media have reported illegal resale of insured Mounjaro to people seeking cosmetic weight loss. The Health Ministry issued a notice in mid-June on improper off-label use of GLP-1 drugs for dieting and has said it is weighing tighter guidance with the bureau that oversees medical practice.

The editorial’s larger claim is that a compliance crackdown will not be enough. “Current efforts to promote the appropriate use of GLP-1-based medications have largely focused on regulatory compliance related to off-label prescribing and illegal acquisition,” the authors wrote. Messages that simply tell people not to use the drugs off-label, they said, “are unlikely to curb inappropriate use.”

What they want instead is a shift in how success is defined. “We propose that the discussion surrounding GLP-1-based therapies should move beyond appropriate drug use toward appropriate weight reduction,” they wrote, “regardless of whether weight loss is pursued to improve obesity-related health conditions or for cosmetic purposes.”

That standard includes realistic targets, enough protein and calories to avoid undernutrition, and monitoring for the point at which further loss becomes harmful. The authors pointed to a recently proposed idea they call female underweight/undernutrition syndrome, a framework for the physical and psychological damage that can follow when women are driven below a healthy weight. Underweight, they noted, is itself a clinical problem, not a cosmetic victory.

The argument lands in a global market that has already outrun clinic capacity. GLP-1 and dual agonists have changed obesity care by producing large average weight losses and improvements in blood pressure, lipids and diabetes control. Demand has also produced compounded products, online questionnaires with little follow-up, social-media marketing aimed at people who do not meet obesity criteria, and a secondary trade in leftover pens.

International agencies have begun to describe the same pattern. In a July 30 statement, World Health Organization advisory committees said they were concerned about people obtaining GLP-1 medicines “outside approved indications and medical settings, including through online platforms,” especially those without obesity and without a prescription from a qualified clinician. The committees urged patients to use only authorized sources and to stay under medical follow-up. WHO’s own guidance on the drugs for adult obesity remains conditional and pairs medication with behavioral care.

Other research published this year has widened the safety file beyond Japan. An interim U.S. survey in JAMA Psychiatry found that among more than 400 people with eating disorders, about one in three reported having used a GLP-1 drug and about one in 10 reported misuse. A consensus statement from European obesity and dietetic groups warned that rapid loss, appetite collapse and gastrointestinal side effects can create nutritional and psychological risk even in supervised treatment. U.S. poison-center analyses have shown a sharp rise in calls after semaglutide’s weight-management approval, many of them dosing errors rather than intentional overdose.

None of that erases the drugs’ documented benefits when they are used as intended. It does change the question clinicians are being asked to answer. The Japanese editorial treats “How did you get the pen?” as incomplete. The better questions, the authors say, are how fast the weight is coming off, what the person is still eating, and whether anyone is watching for starvation chemistry.

“Whether pharmacological therapy is administered or not, weight reduction should be supported by appropriate nutritional counseling, careful monitoring, and ongoing medical supervision,” they wrote. In the end, they said, success “should be judged not only by the amount of weight lost, but by how safely and appropriately such loss is achieved.”