The recent boom in housing and construction industry has led to the rise of cement industry compared to past years. The monthly capacity utilisation during the fiscal year 2006-2007 was 94% according to Cement Manufacturers Association (CMA). India is the second largest producer of cement and the industry grows at an average rate of 9.1 %. Domestic consumption is the the biggest revenue mine for the industry. Inorder to control the rising domestic cement prices, the government had stipulated some measures. But these measures had not dettered the growth of the sector. Prism Cement, Dalmia Cement and JK Lakshmi Cement are best bets in this domestic consumption driving growth sector.
The Paper & Pulp processing stocks are highly cyclical and their growth is correlated with GDP. There is a demand of more than 6 Million tonnes anually. The Indian industry supplies around 4.5 Million tonnes and the remaining being imported as per recent Forbes report. Capacity addition is going on across the sector. With Indian GDP growing above 9 %, Tamilnadu Papers & Newsprint Limited (TNPL), JK Paper, and Andhra Pradesh Paper Mills are best stocks in this GDP driven sector.
Shipping in India plays an important role in transporting vast volume of goods across the hinterland. Higher global GDP growth had paved way for more expansion and growth in the sector and had slowly transformed from cylical to non-cyclical. Indian players have good operating structure and profit margins compared to the global competitors. Indian economic boom will definitely help the sector to reach great levels in coming years. Essar Shipping, Mercator Lines and Varun Shipping are best picks in this growth-demand driving sector.
Power sector reforms were initiated in 1991 in India. Electricity Act 2003 was a major step that solved major underlying problems. Now, the sector is in growth phase with many projects in anvil as part infrastructure creation. Transmission & Equipment sector acts as a sandwich provider between the energy producer and the end consumer. The sector has only a bunch of players. Alstom Projects, Kalpataru and KEC International are best picks in this power playing sector. KEC International is also implementing projects in Middle East outside India.
Banking sector in India is in early stage compared to US and Europe. This may be due to high regulations from time to time by the central bank. There is a strong thrust for rural and retail banking roping on pro-agriculture governmental reforms and growing middle class population. Big underpenetrated market holds big opportunity for existing PSBs with good number of branches and also have strong regional presence. Indian Overseas Bank, Allahabad bank and Andhra Bank are best bet in this sector based on their rising net profit and organic growth compared to other PSBs.
Indian film industry is one of the largest in the world producing more than 1000 native films annually. The industry is growing at a CAGR of 16% and also gaining global audience in Europe and North America. More multiplexes are coming up in tier II and tier III cities. The corporatisation of film industry led to enhancement of revenue margins and discovery of new revenue streams. Pyramid Saimira, Inox Leisure and PVR Cinema are emerging stars in this evergreen sector.
Retail broking and equity research services are increasing day by day based on high economic activity and more small investors arriving to the capital market. Big houses in this sector had started expanding its offices in small towns to get greater market share in coming days. There is also growing consumer demand for added financial services. India Infoline, IL & FS Investmart, Geojit Finacial are best bet in this demand driving sector.
Textiles - Readymade Garments industry is growing at CAGR of 20%. Major revenues are from exports to EU and US. Domestic market is also creating more demand. Capacity addition is going on across the sector on high growth expectations. All the stocks have considerable profit margins compared to other textile sub-sector stocks. Pearl Fashions, Indus Fila & Page are best bet in this moving sector.
Hospitality industry has great potential in coming years due to booming economic activity and high inflow of foreign tourists. Growing at CAGR of 15%. It has also seen spectacular growth in the past. Government incentives also boosts this thriving sector. Mid cap stocks such as Asian Hotels, Hotel Leela Ventures and Taj GVK Hotels are good bet in this sector. All these stocks trading at more or less same P/E levels compared to their large cap peers. Promising investment.An important milestone in the BSE history of reaching more than 14600 points which had been a psychological barrier for the past 1 month. This rise is true and achieved with good fundamentals. Q1 results are in the anvil. Markets will definitely cross the 15000 shortly. Cheers! Happy investing. |
