Introduction
Different sectors come with varied degrees of risk and growth potential. While it is inherently uncertain to predict market performance, current trends and expert insights help you understand which sectors have promising prospects for 2024.
This blog gives you an overview of the five best sectors to watch this year and the top stocks to add to your watchlist from each sector.
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Five best sectors to watch out for in 2024
1. Infrastructure
The infrastructure sector, comprising highways, railways, airports, ports, and more, has seen significant growth in budget allocation in the past. In FY23, allocation to infra projects increased by 39% year-over-year (YoY). As the government’s focus on infrastructure development remains, the allocation is poised to continue increasing and propel the sector.
The government’s vision to expedite the National Infrastructure Pipeline (NIP) project further strengthens the chances of the sector’s growth. It will benefit companies involved in construction materials, renewable energy solutions, and engineering. The sector is attractive for investors interested in long-term, stable returns as infrastructure spending can create jobs and drive economic activity.
Top stocks to add to your watchlist:
2. Real estate
The Real Estate Regulatory Authority (RERA) and Affordable Housing Program, initiated by the government, aim to support the growth of the real estate industry. With the expanding urban population, the commercial real estate sector is also expected to witness increased demand.
These favourable government programs, rising urbanisation, and other factors make the sector a promising investment avenue.
Top stocks to add to your watchlist:
3. Renewable Energy
The Indian government has been promoting solar and wind energy use for several years. It is also supporting the use of additional renewable energy sources like small hydropower and bioenergy. The government’s support, rising demand for clean energy, and falling costs of renewable energy technology are crucial factors hinting towards the sector's potential growth. Investors must watch out for companies involved in renewable energy production and technology as they could be promising investments.
Top stocks to add to your watchlist:
4. Technology
This sector continues to be a powerhouse, with advancements in artificial intelligence, cloud computing, and cybersecurity driving growth. The government’s ‘Digital India’ program encourages people to use digital technology and has assisted in the expansion of the sector.
Many international companies partner with Indian businesses to execute their IT projects. This outsourcing model significantly boosts the industry and generates employment opportunities for qualified workers.
The government’s regulations, rising demand for digital technology, and a large pool of skilled employees are anticipated to propel the sector and bring strong growth in the years to come. Investors must look for companies engaged in cybersecurity, artificial intelligence, e-commerce, fintech, and cloud computing.
Top stocks to add to your watchlist:
5. Healthcare
India’s demand for healthcare services is rising because of increased chronic illnesses, an ageing population, and a growth in disposable income. The government’s Ayushman Bharat program aims to improve the healthcare industry by offering health insurance to over 100 million people. The budget allocation has also increased, creating better healthcare services and investment opportunities.
Companies from the healthcare sector can ride on the increased demand for healthcare products and services, technological advancements, government efforts, and rising health insurance penetration to enhance their market share and tap new business opportunities. Investors can look for companies providing medical devices, pharmaceuticals, and diagnostic and healthcare services.
Top stocks to add to your watchlist:
Conclusion
If you want to benefit from investments in the top-performing sectors, you can consider companies from the abovementioned sectors. Remember to conduct thorough research and focus on diversifying your portfolio across sectors to mitigate risks.
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