Best Sectors to invest in Indian Stock Market

Investing could be a tricky thing when you find yourself in the middle of a strong bull market. BSE Sensex is at its record high and seems to move higher. We expect BSE Sensex to hit 40,000 or higher by March 2018. India is growing and it’s the best time to invest in India. Indian stock markets also are growing as more and more people are investing in equities and mutual funds.

The sectors that will grow the most in the near and medium term future are:

Infrastructure: Building a business friendly framework

Government is looking seriously for developing infrastructure and several long term projects have been undertaken by the government in last 3 years. Governments ambitious plans to develop smart cities and industrial corridors or the achievable goals of doing infrastructural developments in existing hospitals, highways, schools, airports, etc. will be surely helpful for Infrastructure compainies.

Companies like Larsen & Tourbo, Punj Loyd, Reliance Infrastructure, BHEL, etc. are good bets.

Financial Services: Mobile is here to stay

India’s mobile payment system is among the world’s most advanced. The internet penetration in India is also among the highest. While many were sceptical to use modern banking techniques and still are but after demonetisation many people started using mobile banking. The government has failed to hold all the users but gradually people are getting comfortable to using mobile banking. PSU banks are on a growth path and its a good time to invest.

Non Banking Financial Companies (NBFC) : There is lot of scope to grow

Apart from a multitude of banks, both PSU and private ones, there are a number of Non-Banking Financial Companies (NBFCs) as well. NBFCs are companies that provide some banking-like services in lending and wealth advisory, but they do not offer such products as credit and debit cards and they do not have a banking license.

One of the top sub-sectors in this Automative Finance and Housing Finance. Top stocks are HDFC Ltd., Aditya Birla Finance Ltd., DHFL, LIC Housing Finance Ltd., Bajaj Finserve and Indiabulls Housing Finance Ltd.

Another NBFC sector that is seeing growth are Share Trading Companies. More and more people are investing in share markets since 2014. These companies have seen a steady growth since 2014 and more so after demonetisation.

Technology: Supporting the New India

Technology is still a good bet and continue its run in the next few years. The government is aiming complete transparency and effective governance through Digital India. The present government simply loves technology and has very ambitious plans to spread the network of IT infrastructure to the remotest corners of the country.

The mobile internet, cloud tech and digital payments would be major sub-sectors to look for. Companies like TVS Electronis, RS Software, Tata Communiations are good bet.

Automotive: A lucrative sector

As India develops, more and more people are buying cars. Most of the world’s largest automakers are ramping up production in India.

Top bets are Mahindra & Mahindra and Tata Motors are a good bet. If you can afford, Eicher Motors is a good stock.

Auto ancillary stocks also grow with the overall growth of Automotive sectors. Stocks like  Exide Industries, Bosch and Amara Raja Batteries are safer bets.

 

Disclaimer: The views and investment tips expressed here are author’s personal opinion. Stock markets may be volatile and subject to market risks. FriedEye.com advises users to check with certified experts before taking any investment decisions.

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