Top 5 Sectors to Watch in India in 2024

According to the “Global Credit Outlook 2024” by S&P, India is ready to become the third-largest economy in the world by 2030. Economists and analysts believe this growth will continue above 7% in the coming years. The main reasons for this stable and robust growth are:

Domestic demand,
Expanding private consumption and investments, and
Structural reforms.

The Mission $5 trillion economy has tremendous potential for various sectors in the country. Let’s have a look at the Top 5 sectors in India that can benefit from this growth in 2024.

NBFC

As per IBEF, In FY23, initial public offerings (IPOs) raised US$ 7.17 billion across 40 offerings. The number of companies listed on the NSE grew significantly from 135 in 1995 to 5,311 in January 2023.

India stands out as one of the world’s fastest-growing fintech markets. The market size is estimated at US$150 billion by 2025.

The leading and emerging players of the NBFC sector are:

BAJAJ Finance Ltd

The market capitalization of ₹3,96,836 Crores categorizes this stock as a large cap.
The profitability ratios are commendable, with ROCE at 11.8% and ROE at 23.5%.
Stock’s Price to Earnings ratio is 28.8, with EPS at Rs 226 per share.
The debt-to-equity ratio is high at 4.28, exceeding the threshold of 1.

Indiabulls Housing Finance Limited

This mid-cap stock holds a market cap of ₹11,363 Crores.
Profitability ratios reveal a moderate ROCE of 9.79% and an ROE of 6.62%.
The stock’s P/E ratio is at a reasonable 9.82.
EPS is reported at Rs 16.1 per share.
The debt-to-equity ratio is relatively high at 2.63.

Tata Investment Corporation Limited

This large-cap stock’s market cap is ₹49,365 Crores.
Profitability ratios show a low ROCE of 1.42% and an ROE of 1.28%.
The high P/E ratio stands at 144.
EPS is Rs 68.1 per share.
The debt-to-equity ratio is low at 0.01.

Renewable Energy Sector

India’s announcement is significant, aiming to achieve net zero carbon emissions by 2070. Additionally, the country plans to meet 50% of its electricity needs from renewable sources by 2030. This marks a historic milestone in the global effort to combat climate change.

This sector is vital for the future and has immense growth potential. The leading and emerging players in the Renewable Energy sector are:

KPI Green Energy

This mid-cap company boasts a market capitalization of ₹10,404 Crores.
It showcases robust profitability ratios, with ROCE at 24.7% and ROE at 53.4%.
However, the stock’s P/E ratio is slightly high, reaching 69.0.
EPS remains positive and is growing, standing at ₹26.8 per share.
The company’s debt-to-equity ratio is also slightly elevated, at 2.58.

TATA Power

This large-cap company maintains a market capitalization of ₹1,35,882 Crores.
The company sustains decent profitability ratios with ROCE at 11.7% and ROE at 12.6%.
However, the stock’s P/E ratio is slightly high, reaching 39.7.
EPS shows a growing trend, standing at ₹11.2.
The company’s debt-to-equity ratio is also slightly elevated, at 1.74.

JSW Energy Ltd

This large-cap company boasts a market capitalization of ₹84,742 Crores.
It maintains modest profitability ratios, with ROCE at 7.28% and ROE at 7.22%.
However, the stock’s P/E ratio is somewhat high, at 51.6.
EPS remains positive at ₹9.99.
The company’s debt-to-equity ratio is slightly elevated, at 1.40.

Autos and Ancillaries

The EV revolution directly benefits the Auto and Ancillaries sector. The major players in this sector are:

TATA Motors

This market leader boasts a market capitalization of ₹3,80,439 Crores.
It maintains decent profitability ratios, with ROCE at 5.95% and ROE at 5.62%.
The stock’s P/E ratio is fair, standing at 18.9.
EPS remains positive and shows growth at ₹58.4.
However, the company’s debt-to-equity ratio is high, at 2.38.

Sona BLW Precision Forgings Ltd

This large-cap company boasts a market capitalization of ₹40,133 Crores.
It demonstrates robust profitability ratios, with ROCE at 22.0% and ROE at 18.3%.
However, the stock’s P/E ratio is high, standing at 80.7.
EPS remains positive and shows growth at ₹8.34 per share.
The company’s debt-to-equity ratio is low, at 0.16, indicating a healthy financial position.

UNO Minda Ltd

This large-cap company boasts a market capitalization of ₹37,317 Crores.
It demonstrates outstanding profitability ratios, with ROCE at 18.1% and ROE at 17.1%.
However, the stock’s P/E ratio is high at 48.2.
EPS remains positive and shows growth at ₹13.5 per share.
The company’s debt-to-equity ratio is low, at 0.37, indicating the good health of the company.

IT Sector

The service sector is one of the fastest-growing sectors of the Indian economy. In the Union Budget 2023-24, the allocation for the IT and telecom sector stood at Rs. 97,579.05 crore (US$ 11.8 billion).

The leading and emerging players in the technology sector are:

Infosys

This tech giant boasts a market capitalization of ₹6,70,312 Crores.
It exhibits excellent profitability ratios, with ROCE at 40.5% and ROE at 31.8%.
The stock’s P/E ratio is fair, standing at 27.5.
EPS remains positive and shows growth at ₹58.8 per share.
The company is in good health, with a low debt-to-equity ratio of 0.11.

LTIMindtree Ltd

This large-cap company boasts a market capitalization of ₹1,51,724 Crores.
It maintains robust profitability ratios, with ROCE at 37.7% and ROE at 28.6%.
However, the stock’s P/E ratio is slightly high, at 33.0.
EPS remains robust and shows growth at ₹155 per share.
With a low debt-to-equity ratio of 0.10, the company is healthy.

L&T Technology Services Ltd

A large-cap company with a market capitalization of ₹55,917 Crores.
It enjoys generous profitability ratios, with ROCE at 32.6% and ROE at 25.0%.
However, the stock’s P/E ratio is slightly high, at 42.9.
EPS remains robust and demonstrates growth at ₹123 per share.
With a low debt-to-equity ratio of 0.11, the company indicates good health.

Summing up, the government’s higher objective to make the country a developed nation by 2047 promises the growth of various industries. A lot more sectors beyond these hold potential for growth in the long run.

Stay tuned with us for more informative content like this!

Thank You!