Top 5 Sectors to Watch for the Next 10 Years –

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Introduction:

In the calendar year 2020, we have witnessed a once-in-a-century crisis in the form of the Covid-19 Pandemic.

where the World Market got shattered but the Indian Stock Market performed well and its major benchmark indices delivered a strong double-digit return where the Small-Cap and Mid-Caps outperformed.

India is an emerging economy and hence there are great opportunities available for the investors to look upon to create wealth. Thereby we will be discussing some of the sectors which is highly underpenetrated or which possess a great potential to grow at a strong double-digit rate in the coming 10 years.

Top 5 Sectors:

1) Insurance Sector:

  • The insurance sector in India is highly underpenetrated as compared to the Developed Markets in the World.
  • In India, there is under penetration of around 30%-40% in the insurance sector as compared to the Developed Markets.
  • The journey of Underpenetration to Penetration will be quite remarkable. And any particular company can be largely benefited if it performs extraordinarily to the growth available in the sector. If any particular insurance company takes the early mover advantage or gives a consistent sound performance
  • Then it can enable it to grow in a healthy double-digit figure of around 15%-20%.
  • In Insurance Sector, Life Insurance Sector is highly underpenetrated whereas Medical Insurance in General Insurance Category is also underpenetrated
  • Hence both segments of the Insurance Sector look quite attractive.
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2) Natural Gas Sector:

  • The Current Market Share of Natural Gas is around 6% where the Government aims
  • To take this market share to 15% of the total energy consumption in the coming 10 years.
  • The strong push from the Government side itself shows the great potential of growth in this sector of double-digit figure
  • If any particular company performs well here, can be highly rewarded.

3) Organized Retail Sector:

  • Currently, the Organized Retail Sector is having a market share of around 12%
  • which comprises of Offline Retail Market Share of around 9%, and an E-Commerce Market Share of around 3%.
  • The current organized retail players like Reliance Retail, Avenue Supermarts, Amazon, etc. have a huge opportunity to grab a health market share from the unorganized retail sector which accounts for around 88% as of now.
  • This organized retails possess a great amount of user’s data, as well as deals, and backward integration, which will help these companies to grow very well in the future compared to the Mom-and-pop stores, Kirana stores, etc.
  • Looking at the growth prospects, this sector can grow at the rate of around 25% to 30% in the next 10 years.
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4) Electric Vehicle:

  • Electric Vehicle Sector comprises many other sub-sectors which are Power related companies, Automation related companies, or Electric Vehicle companies themselves.
  • As of now, the Electric Vehicle Sector market share in the total vehicle is on a very lower single-digit side
  • Hence there is huge potential available in the Electric Vehicle sector.
  • Electric Vehicles to around 30%-35% of the Total Vehicle Sale by the year 2030-2035

5) Private Sector Bank:

  • In the case of the Banking Sector, as of now, the Private Sector Banks owns the market share of just 35% as compared to 65% of the Public Sector Banks.
  • Also, these private sector banks is having a market share of 30%-35% in the credit market.
  • Hence, in the coming 5 to 10 years, the market share of these private sector banks can just get doubled from the current 35% to 70%.
  • This growth will be supported by Non-Performing Assets (NPAs) levels of the PSU Banks which is ultimately leading towards Privatisation of Banks.
  • Hence, these private sector banks can enjoy the natural growth available in the sector which is around 9% to 10% and will also be benefited from the effect of getting market share doubled to 70% in the coming years.
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Conclusion:

Do follow due diligence before making any investment decision. Or Do consult a Financial Advisor before making any investment decision.

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