Top 5 Stocks to Benefit from IPL 2024

The excitement is surely palpable in this IPL 2024 season.

With matches spread across 10 cities, India's biggest cricket tournament is set to ignite not just the cricketing fervour, but also the investing landscape.

Let's look at the top stocks that could possibly benefit this IPL season.

#1 Network18 Media

First on this list is Network18 Media.

Network18 is the media and entertainment business vertical of the Reliance group.

It primarily acts as a holding company for its subsidiaries, which are involved in various segments of the media and entertainment business.

In 2023, Reliance-backed Viacom18, the owner of the JioCinema app, secured the digital streaming rights for the IPL 2024 for Rs 237.6 billion (bn).

Companies with robust broadcasting rights usually witness a notable escalation in their share prices during these events.

Apart from Network18 Media, Reliance also has another listed subsidiary in this space - TV18 Broadcast, which also stands to benefit from the telecast rights of various platforms.

With several media rights now with Reliance and its subsidiaries, the group is trying to boost revenue through ads or a subscription model.

Note that Network18 was among the biggest beneficiaries in last year's cricket world cup competition. Global events like these create a wave of enthusiasm and add to the substantial uptick in advertising expenditure.

Network 18 Media, being the largest shareholder in BookMyShow, one of the ticketing partners for IPL 2024, adds dimension to the positive outlook for the company.

With a keen eye on the digital landscape, Network18 is swiftly broadening its online presence, propelled by the escalating trend in online and mobile content consumption.

The company is boasting escalating digital audience and is actively investing in novel digital platforms and products.

In the past one year, shares of the company have rallied over 70%.

#2 Airline Stocks

Another obvious beneficiary from the IPL 2024 season could be Indian airline stocks.

You see, the IPL 2024 is scheduled to occur at ten different venues across India.

Fans from various parts of the country will be traveling to different cities to watch these matches. This surge in domestic travel is likely to increase passenger traffic for airlines, leading to higher occupancy rates and potentially higher revenues.

IndiGo or Interglobe Aviation currently holds the largest market share among airlines in India. So that could be a prime beneficiary.

During the IPL season, airlines might also offer special deals or packages for travellers heading to match destinations, which can boost ticket sales. Additionally, airlines might see an increase in last-minute bookings as fans decide to attend matches spontaneously.

IndiGo is currently in a sweet spot as it has major tailwinds working in its favor and we've repeatedly mentioned about the India aviation industry's boom in the coming 2-3 years.

Even if the revenge travel trend dies down (which I don't think it will), IndiGo will be fairly better prepared compared to the rest. The weaker players in the sector could put a damper on their revenue growth. Indigo, not so much.

IndiGo's pricing power and healthy air passenger traffic could keep the company in blue skies for a long time it seems.

A word of caution sounds about right at this point of time. If you're considering investing in airline stocks, make sure you do your due diligence. It's a risky sector.

If you get either the stock or your timing wrong, you could face serious losses. But if you buy the right stock at the right time, you could find yourself with a multibagger stock.

#3 Hotel Stocks

This goes without saying.

The thousands of people who will flock to multiple cities will stay at local places near the stadium providing suitable accommodation.

While we can't single out one specific direct beneficiary, the hotel stocks on the market could still profit indirectly, if travellers visit these cities hosting the matches, as part of a larger itinerary.

So hotel stocks could see a spike in occupancy.

However, many hotel chains in India like Indian Hotels, Samhi Hotels, EIH, Mahindra Holidays, and Lemon Tree, and others, are doing booming business anyway with high occupancy over 70%. Thus, any benefit from IPL 2024 will be the cherry on the cake.

Within the hotels sector, the Indian Hotel Company has a firm grasp on the market and the homegrown Tata brand of course helps... so Indian Hotels could be a possible beneficiary from the IPL 2024 season.

Apart from Indian Hotels, Trident and Taj GVK Hotels will also remain in focus as they have hospitality services in 10 different locations across India. Even team members, the IPL support staff, commentators, etc. will stay at these brands hospitality services.

In the December 2023 quarter, Indian Hotels posted a stellar show amid decent growth in room revenue.

In the past one year, share price of Indian Hotels has rallied over 86%.

#4 Zomato

Another obvious beneficiary.

Cricket matches, especially during the IPL season, tend to bring people together for viewing parties, leading to an increase in group food orders.

This spike in demand can significantly boost Zomato's order volumes and revenue during match days.

Apart from that, Zomato has partnerships with popular restaurants and food chains to offer special deals and combos during cricketing events.

Zomato shares will be in focus even after IPL 2024 as we have another big global event - T20 Cricket World Cup - starting June 2024.

Furthermore, India's online food delivery market is projected to reach a staggering US$ 16 billion (bn) by 2025, making Zomato a frontrunner in a sector brimming with future potential.

Zomato recently achieved its first-ever quarterly profit, demonstrating progress towards profitability and bolstering investor confidence. Furthermore, the company's enhanced disclosures have been viewed positively by investors.

Starting Q2-FY24, Zomato has started charging a nominal platform fee (Rs 2-5) for each order that will help it to stabilise its economics even further.

The platform company's foray into hyperlocal delivery (Zomato Instant, Blinkit) and loyalty programs (Zomato Gold) offer promising new revenue streams and have been well-received by the market.

Zomato's share price is also going up because of rumors that the Open Network for Digital Commerce (ONDC) has changed its reward system to lessen reliance on discounts.

#5 Ceat

A not so obvious name in the list.

Tyre maker Ceat was selected as an official partner to sponsor certain segments of the IPL matches in 2024.

The Board of Control for Cricket in India (BCCI) made this decision in February 2024 and Ceat shares did see some traction at the time of announcement.

According to the company's exchange filing, the contract is valued at an aggregate spend of Rs 2.4 bn over five years.

Apart from RPG group company Ceat, Angel One has also invested in the event.

In a bid to gain market share in the premium tyre segment, Ceat launched a range of premium steel radial tyres this year, which will be sold directly to consumers.

Premium tyres have been a focus area for a few quarters, and the category is moving well.

Companies like Ceat that excel in premiumisation gain a competitive advantage in the market. They differentiate themselves from competitors by offering unique and superior products.

This competitive edge can result in increased market share, higher pricing power, and greater resilience to economic fluctuations.

Note that Ceat has lined up a Rs 7.5 bn capex plan mostly to be deployed in increasing the production capacity of agri-radial tyres at its Ambernath plant in Maharashtra.

In the past one year, Ceat share price has rallied over 90%.

In Conclusion

So these were just the few beneficiaries that could make hay while the sun still shines this IPL season.

Apart from the above, you could also track Sapphire Foods, Westlife Foodworld, Varun Beverages, ITC, HUL, EaseMyTrip, among others, as IPL's return kicks off a MAJOR spending boom in India.

However, it's important to note that while these stocks show strong potential, investing always carries inherent risks.

Therefore, investors should exercise prudence, conduct thorough research, and consider diversification when making investment decisions.

We will continue to dig a little deeper into this topic and see if there are any other opportunities.

Stay tuned and Happy Investing!

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...