Best Sectors and Stocks in 2010 and beyond
Here is a compilation of the top 5 sectors in Indian stock market that could give handsome returns in the next one or two years. Now, that markets are again back at Nifty 5300 levels, it is on the verge of a likely breakout. Hence, it would be a prudent idea to have a check as to which sectors and industries would it be worthwhile for the investors to plough their hard earned money. Investors would be keen to know which sectors are placed better to be among winners for the FY 2010-11.
1. Power Sector
The government has targeted electricity for all by 2012 by the end of 11th Five Year Plan. The demand of electricity is growing exponentially. And, herein lays the opportunities for investors to plough their money in public and private sector companies both.
At present, coal based thermal power plants accounts for almost two-thirds of the energy needs of the country. However, the government is increasingly becoming aware about the benefits of generating power through cleaner nuclear power plants.
More recently, during the Budget 2010 announcement, the government has also laid emphasis on the development of non-conventional energy resources such as Solar and Wind Energy. Rural electrification is also a significant initiative by the government to allow access to electricity in remote regions in India.
Top Stock Picks in Power Sector:
- NTPC (Power Generation)
- Power Grid Corporation (Power Transmission)
- Tata Power (Power Generation)
- Rural Electrification (Power Sector NBFC)
- BHEL (Power Equipments)
2. Food Processing
As the growth of the economy chugs forward and consequently generates more employment and raises the standard of living of the middle class population; the demand for dynamic and processed food products will witness a manifold rise.
The upcoming years are likely to witness a fast growth in ready-to-consume food products like health drinks, frozen food products for low-shelf life food articles, readymade Aata (flour), fruit juices, ready-to-cook meals, quicker snack products like noodles and pastas, etc. with increase in percentage of working couples and busy life style.
Top Stock Picks in Food Processing Sector
- ITC,
- Ruchi Soya
- LT Foods
- REI Agro
3. Banking & Finance
Banking industry is said to be a mirror of an economy’s health. A Sound banking system serves as a significant trade enabler to the country. During the recent global crisis, Indian banking industry came out with flying colors on the back of stringent stipulations laid down the Central bank.
With the opening up of the sector in early Nineties by the government, the industry has received a significant boost by the emergence of the private sector banks which increased competitiveness and enhanced the level of banking facilities to a top notch level.
For a sustained economic growth for the country, unmatched banking and financial services is a must in order to facilitate the increasing need of swift and hassle-free transactions. Banking sector is an enabler to the economic growth.
Top Stock Picks in Banking & Finance:
- HDFC Bank
- SBI
- ICICI
- Bank of Baroda
4. Infrastructure
If the economy is an emerging one like India which is a laggard on the infrastructural front, the growth in the infrastructure industry gains all the more importance. High transaction costs arising from inadequate and inefficient enabling infrastructure can go a long way in stunting the growth rate of the economy.
The broad term of infrastructure can cover a wide range of infrastructural facilities from ports and road, rail, transport, aviation, water needs, mining and construction among other fields of operations. Better infrastructure can lead to faster enabling services.
Top Stock Picks in Infrastructure sector:
- L & T
- Patel Engineering
- IVRCL Infrastructure
- Hindustan Construction Company
- Thermax.
5. Oil & Gas
Most of the large companies were building new capacities before the breakout of the recession. This new capacities led to excess supply and falling demand at a time when the demand was hit on account of slowdown and crisis. This led to plunge in the operating margins of the refiners who were stuck with excess supplies of crude products.
However, with the recent advent of a recovery on the horizon, there is a gradual pick-up in the global demand for oil and gas, as economies are back to pump money for higher capacity utilization of their resources in order to meet increasing demand of goods and products. Demand for petro products is expected to improve over next one year.
Top Stock Picks in Oil & Gas sector:
- Reliance Industries
- GAIL
- Essar Oil
- Cairn India.
Source: http://trak.in/tags/business/2010/04/06/top-5-sectors-to-invest/
