NIFTY recently hit a new high in December 2023. But wait, will the upward trend continue in 2024 as well? If yes, then which stocks do you expect to steer the ship? Let’s check them out.
As 2023 concludes, positive trends emerge. The third quarter sees better-than-expected real GDP growth and subdued inflation, sparking a solid recovery in high-growth stocks. While the experts forecast the Indian Stock Market to become the world’s fifth-largest, with the highest market capitalization, the Asian Development Bank projects India’s economy to grow by around 8% in the next 5-6 years. It creates a favorable environment for investing in India’s expanding industries and considering shares in growth stocks aligned with solid trends.
But which sectors should the investments be directed to harness the best results?
1. Healthcare sector:
The global healthcare sector is set to reach $63.90 billion in 2023, with beneficiaries potentially reaching 1,567.3 million by 2027. Simultaneously, the Indian healthcare market is growing significantly, adopting advanced technologies like telemedicine and digital health platforms, creating new development opportunities. Factors such as an aging population, increased chronic illnesses, and a rising disposable income boost the demand for healthcare services in India. The COVID-19 pandemic has emphasized the need for improved healthcare services, leading to additional investments.
Additionally, initiatives like Ayushman Bharat and increased government healthcare budgets present numerous investment opportunities. According to Invest India, the health sector may grow by 16-17%, reaching $372 billion by 2023 and 2024. India’s healthcare industry’s CAGR is approximately 22% over the last six years, making investments in the sector a compelling long-term option.
2. IT Sector:
The surge in technological advancement has propelled the information technology sector, becoming crucial for businesses of all sizes. India, a vital player in the global IT arena, has a highly qualified workforce and a business-friendly environment. The nation’s IT market is rapidly expanding, with projected sales surpassing $300 billion by 2025. NASSCOM reports a 15% annual revenue growth, estimated to reach around $350 billion by 2026-27, driven by Artificial Intelligence, analytics, and cloud computing. Indian IT firms, recognized for software development and maintenance, attract international corporations to outsource their projects. The industry’s shift towards modern technologies aligns with government initiatives, including the Digital India program, fostering the sector’s growth through broadband connectivity and the adoption of digital technology. Favorable regulations, a skilled workforce, and increasing demand for digital technology put India’s IT sector up for robust growth.
3. Renewable energy sector:
India aims to achieve 450 GW of renewable energy capacity by 2030, including 5 GW of small hydropower, 10 GW of biofuel, 140 GW of wind power, and 280 GW of solar power. India’s rapid expansion in the renewable energy sector showcases significant progress towards this ambitious goal.
The government’s initiatives towards building ultra-mega solar parks and implementing solar rooftop programs illustrate their commitment to solar energy adoption. The Q3 2023 Mercom India Rooftop Solar report reveals a 34.7% increase in cumulative rooftop solar capacity to 10.1 GW. Additionally, promoting offshore wind energy projects and exploring bioenergy and small hydropower highlight India’s comprehensive approach to diversifying its renewable energy portfolio. With favorable government policies, a growing demand for clean energy, and decreasing renewable energy technology costs, India’s renewable sector is poised for continued rapid growth in the upcoming years.
4. Automobile sector:
As per CNBC, the global electric vehicle fleet surged by 54% to approximately 3.1 million in 2017, and projections estimate it will reach 125 million by 2030. It signals a shift towards electric vehicles, indicating a transformative future for India and the world. The electric vehicle revolution presents a compelling sector for forward-thinking investors eyeing long-term opportunities in India.
Despite challenges such as reduced demand and regulatory changes, India’s automotive industry, contributing 7% to the GDP, encompasses passenger automobiles, commercial vehicles, and two- and three-wheelers.
The industry aligns with government initiatives such as the Faster Adoption and Manufacture of Electric Vehicles (FAME) plan and the Production Linked Incentive (PLI) program; thus, it is also anticipated to rebound due to rising incomes, urbanization, and infrastructure development. While fuel costs, changing preferences, and global competition pose challenges, favorable policies, and growing demand suggest continued growth in the Indian automobile industry.
5. FMCG (Fast Moving Consumer Goods) Sector:
Over recent years, the Indian FMCG industry has witnessed substantial growth driven by increasing incomes, evolving lifestyles, and urbanization trends. The FMCG market will likely reach around $18,939.4 billion globally by 2031.
On the other hand, India’s FMCG market may hit $220 billion by 2025, with a growing focus on e-commerce and digital marketing. Initiatives like Make in India and the National Food Processing Policy further support the sector’s expansion, making it one of the profitable choices for 2024.
The sectoral guide does help in picking the arena, but what about the specifics?
You can always turn to a SEBI-registered investment advisory for help. The expertise of such advisories aids in navigating the sectoral market and picking suitable long-term and short term stocks to buy. With them in your team, you can safely ride the growth wave of the Indian economy in 2024. So, with the year reaching its conclusion, start strategizing to ensure your portfolio benefits from the upcoming growth stage.