It is a well-known fact that the Indian stock market is outperforming the global markets. According to economists and experts, this trend can continue in the days to come. Well, there are many reasons why stocks of Indian companies will do well. The first one being the steady economic growth of the country. In many sectors, India is the fastest growing economy in the Asian region attracting a lot of foreign investments. The second reason is the ambitious nature of Indian corporates: there have been many mergers, acquisitions over the past few years. The third and final reason is the attractive valuations at which many large cap and mid cap stocks are available. However, any investor wishing to enter the Indian equity market should think sector specific instead of looking at what the Sensex or Nifty is at. The next paragraph has suggestions on long-term stocks to invest in India.
Banking Stocks
When the GDP (gross domestic product) growth is strong, the sector which will benefit the most is the banking and financial services sector. Indian banks have rock solid fundamentals and an ever growing business model which were evident in the way they performed even during the economic recession. Both private and public sector banks have good expansion plans which will result into re-rating of the banking stocks, and the possibility of them reaching new highs cannot be ruled out.
Consumer Goods Stocks
India has a vast population which is still growing at a rapid pace. Though this might be a cause of concern, increasing job opportunities have increased the disposable income in the hands of people. So, due to the strong domestic growth, companies producing consumer goods are most likely to post good results and so will their stocks for the shareholders.
Infrastructure Stocks
Infrastructure development is on a fast track in India. In the annual budget, a huge amount is sanctioned for infrastructure development in the country. There are some companies in this space which have bagged mega construction projects by winning government tenders. Increasing margins, increasing order book with more work coming in and experience will drive the growth of infra companies in India and hence these stocks can be profitable bets in the future.
Information Technology Stocks
Indian information technology ( I.T.) companies are grabbing headlines in the world due to their fast growth. With more and more contracts coming from European nations, I.T. companies are expected to perform better in the future. Though the dollar prices have an impact on the earnings of these companies, able and successful management teams will surely guide these companies to success.
Telecom Stocks
Many people are currently bearish on Indian telecom stocks due to increased competition in the domestic market and high spectrum fees paid by the operators. However, considering the growing Indian market and rapid expansion plans including acquisitions, this sector will bounce back strongly in the time to come as per the views of many brokerage firms. So, this is an area which you can concentrate on.
Hopefully, this article will guide you in the right manner if you plan to invest in stocks in India. So, plan your investments well and take home the profits!
DISCLAIMER: This article is just for reference purposes and does not recommend any stock market transactions.
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