Market Outlook: 6 key sectors investors should watch out for in 2024

OmniScience Capital has released a market outlook report for 2024, highlighting key sectors in the Indian economy. The report predicts a 100-lakh crore opportunity in banking and finance.

A Ksheerasagar
First Published22 Dec 2023, 01:04 PM IST
The US elections in 2024 are anticipated to result in favourable monetary and fiscal policies, influencing global economic trends.
The US elections in 2024 are anticipated to result in favourable monetary and fiscal policies, influencing global economic trends.(Pixabay)

Beating estimates, the Indian market performed phenomenally this year, marked by the launch and high performance of significant projects in various sectors of the economy. This remarkable year has seen a rally in mid- and small-cap stocks and a historic number of IPOs. Overall, the Nifty 50 gained 17.40% and the S&P BSE Sensex gained 16.48% in the current year so far.

As 2023 comes to an end, investors are looking for events and sectors that could set the course for 2024. OmniScience Capital, a registered investment adviser, has today released a detailed market outlook report for the year 2024.

The report highlights include some of the most impactful projects that are currently underway in vital sectors of the Indian economy, in addition to quantifying the opportunities that they create in the markets.

Banking and Finance: The report highlights a remarkable 100 lakh crore opportunity in banking. This opportunity is catalysed by spending in fintech and payments, rating agencies, enhancing digital banking, exchange systems, HFCs and NBCs. The opportunity includes several sub-growth vectors, providing stability and promise in this avenue for investors.

Also Read: Nifty PSU Bank index jumps 28% in 2023. Can PSBs sustain the rally in 2024?

Digital Transformation: The nation is actively pursuing comprehensive digital transformation, and this momentum is anticipated to persist in the coming years, according to the report.

Total expenditure is predicted to be divided among AI ($15 Trillion), Cloud infrastructure ($1 Trillion), 5G infrastructure ($13 Trillion), development of Metaverse ($5 Trillion), Internet Of Things ($19 Trillion) and Blockchain ($3 Trillion). The report suggests that investments in digital transformation will yield a substantial impact of $100 trillion through technology development projects exceeding a trillion dollars.

Power and Energy: In the domain of Power and Energy, the report expects that power consumption will reach 4 trillion units by 2030 with a 13% compound annual growth rate (CAGR). It says that the total addressable market (TAM) in power will reach 24 lakh crore, emerging as a significant driver of India's current economic growth.

Also Read: Nifty IT index gains 1.6% despite Accenture's cautious outlook; what's driving the rally?

It listed out the avenues for investment including clean energy, generation and transmission, solar/hydro, resource and equipment manufacturing, and trading & exchange. The diverse and ambitious projects have created an opportunity for a 24 lakh crore CAPEX push. The volume growth is expected to be in the double digits in the coming year based, as per the report. 

Railway Infrastructure: India plans to ramp up its railway infrastructure development to a new level in the coming years with various projects including the purchase of 8 high speed bullet trains, and the redevelopment of more than 1,300 stations. The plan also expects to invest in 400 Vande Bharat trains and 3000 new passenger trains in the next 5 years.

Also Read: Top 5 stocks to ride Indian Railways 1 trillion mega revamp

Lastly, there will be progress in an ambitious dedicated freight corridor of India targeting 45% of all freight in the country. According to the report, these projects have opened up a substantial sector capital expenditure (CAPEX) opportunity, totaling 50 lakh crore in railways. 

Defence Sector Spending: "The Indian defence sector has spent a whopping $81 Billion Dollars in the year 2023, the 4th highest spending in the world. Defence exports touched a CAGR of 20% to 84 countries. The expenditures range from purchase of submarines and torpedos, aircraft carriers, fighter jets, missiles, 2 defence corridors, 150 defence systems and radar systems, with 70% domestic procurement. The opportunity presented is estimated to be a turnover of 1.75 lakh crore by 2025 at a CAGR of 15%," the report said. 

Also Read: From Mazagon Dock Shipbuilders to IRCTC, 7 of 8 PSU stocks listed over last 5 years gave multibagger returns

Clean Energy for Mobility: India is aspiring to control 30% of the global market share in clean mobility by the year 2030. In order to meet this goal, there would have to be investments worth 30 lakh crore. 

Of these, 8 lakh crore are anticipated to be invested in green hydrogen, most likely the future of car fuel. In addition, the various avenues of investment include 2/3W passenger commercial EVs, new battery technology, development of charging infrastructure, and power storage technology.

Also Read: Electric two-wheeler firms pin hopes on government support in 2024

Key events in 2024

The report outlines the following key events that could have an impact on the financial environment of the country in 2024:

Fed Rate Cut (0.75% to 2%): A substantial inflow of foreign institutional investments (FII) into Indian equities may be impacted.

RBI Rate Cut (1.5% to 2.5%): A rate cut by the Reserve Bank of India (RBI) has the potential to drive significant economic growth, attracting substantial domestic institutional investment (DII) inflows.

Indian Elections 2024: The upcoming elections in India are expected to lead to substantial fiscal and monetary allocations, influencing economic dynamics.

US Elections 2024: The US elections in 2024 are anticipated to result in favourable monetary and fiscal policies, influencing global economic trends.

OmniScience advisors said that despite external factors, the robust drivers in various sectors of the Indian economy will likely maintain the optimism observed in the markets throughout 2024.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.

 

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News in Numbers

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$5 M

394,000

$112 B

12.1%

₹133.50 Cr

₹12,300 Cr

$136 M

First Published:22 Dec 2023, 01:04 PM IST
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