March 2024
India’s growth rate expectations have been on an upward revision mode since the beginning of this year with initially IMF projecting 6.5% for FY 24-25 and the latest forecast from RBI at 7% with a 8% growth rate for the current fiscal. Whether it’s 6.5% or 7% or 8%, how does this make any difference to you and me? Well, a higher-than-expected growth rate for an economy has a rub-off on market sentiments and that’s what matters to the common investor.
The market is scaling new highs and some segments like mid and small caps have seen a sharp rally this year. In the midst of all this, where are the buying opportunities for long-term investors?
If one has to go by the interim budget presented last month, there are enough cues to pick up for long-term investors. While the services sector has been contributing to the economy and market moves over the last decade, manufacturing is witnessing anew dawn in this decade. The Make in India initiative has made good progress since its launch. This coupled with the Government’s vision of ‘Viksit Bharat’ by 2047 make the following sectors worth of investment in this decade.
Mining, Metals, cement, construction, real estate, green energy, EVs, auto, pharma, healthcare, financial services.
Infrastructure and energy are two of the key enablers of economic progress. An outlay of INR 11.11 lakh crore in the interim budget for FY 24-25 is a clear sign of the government’s thrust on infrastructure that will eventually push private investments in big ticket, high impact infra projects. Focus on infrastructure will immensely benefit companies in mining, metals, cement and construction sectors. With infrastructure enabling movement of resources, business activities and economic development, auto and real estate sectors too stand to benefit in the long term.
It goes without saying that a massive infrastructure budget will necessitate huge demand in the energy sector from both coal-based and renewable energy sources. Energy transition initiatives by the government are already underway with a plan to install solar roof tops in 10 million households. Energy transition is also percolating to the auto sector with private companies fast pacing their EV development and launch programs.
Focus on upgrading India’s telecom infrastructure will boost telecom equipment manufacturing, R & D while helping to propel few of the telecom manufacturers into the global top five.
India is on a mission to accelerate the growth in living standards before its demographic dividend dissipates. Hence capacity building in healthcare, upgrading healthcare infrastructure, boosting R & D in pharmaceuticals will take centre stage.
Given that the above sectors are on the highway to growth in this decade, what are the opportunities within these sectors and how can you gain exposure to them?