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Focus Sectors of Right Horizons PMS

India’s economy is on a robust growth trajectory, supported by rising domestic demand, favorable government policies, and global megatrends. Investors seeking sectors expected to grow in 2024 and beyond must consider industries aligned with innovation and expansion. This blog provides details on the focus sectors of Right Horizons PMS which we believe will help provide sustainable long-term returns, based on economic trends, corporate performance, and GDP growth rate projections.

1. Manufacturing: Driving Industrial Resurgence

The manufacturing sector growth in India has gained significant momentum due to supportive government policies such as the Production Linked Incentive (PLI) scheme. This initiative is catalyzing growth across sub-sectors such as electronics, chemicals, auto components, and defense.

Key Growth Drivers:

  • Increased capital expenditure (capex) from the private sector banks financing industrial expansion.
  • Global companies diversifying supply chains and investing in India to mitigate risks.
  • Rising demand for electric vehicle (EV) components, boosting domestic production capabilities.

The manufacturing sector plays a vital role in boosting the GDP growth rate and is expected to grow further with government-backed projects. Companies operating in specialty chemicals and defense manufacturing are poised to provide excellent returns to long-term investors.

2. Renewable Energy: Powering a Sustainable Future

India’s renewable energy sector is expanding rapidly, with a target of achieving 500 GW of capacity by 2030. This makes renewable energy one of the top sectors to invest in India for sustainable growth.

Key Trends in Renewable Energy:

  • Solar and Wind Energy Projects: Supported by government initiatives such as the National Solar Mission.
  • Growth in domestic manufacturing of solar panels, wind turbines, and electric vehicles.
  • Demand for efficient energy storage solutions, with investments in next-generation battery technologies.

The Indian government’s focus on green infrastructure ensures that this sector remains one of the most promising investment opportunities through 2024 and 2025.

3. Infrastructure Development: Building India’s Future

Infrastructure development is a key pillar of India’s economic expansion, with significant investments in commercial real estate, urban transport, and logistics. The National Infrastructure Pipeline (NIP) outlines a comprehensive investment plan, aiming to improve connectivity and public utilities across the country.

Key Growth Areas:

  • Construction of highways, bridges, and metro systems.
  • Private sector banks partnering with the government to finance large-scale projects.
  • Development of smart cities and affordable housing initiatives.

With projects like new expressways and port expansions, infrastructure remains a crucial sector expected to grow, providing direct and indirect benefits to industries such as cement, steel, and construction equipment.

4. Consumer Discretionary: Tapping Into Rising Consumer Spending

As incomes rise and urbanization continues, the FMCG and consumer discretionary sectors have witnessed strong growth. Shifts in spending patterns post-pandemic have increased demand for travel, premium goods, and digital services.

Sub-Sectors Showing Strong Growth:

  • E-commerce and online retail platforms.
  • Consumer electronics, home appliances, and personal care products.
  • Lifestyle and leisure services, including travel and dining.

The growth of digital platforms and cashless payment methods has further fueled the consumer discretionary market, making it a lucrative space for stock and mutual fund investments.

5. Wealth Management: Growing Demand for Financial Advisory

The wealth management industry in India is flourishing as more individuals seek personalized investment strategies to grow their wealth. Rising financial literacy and innovation in fintech have created multiple avenues for investors to access wealth advisory services.

Key Trends in Wealth Management:

  • Increased participation in Nifty 50 index-based funds, PMS (Portfolio Management Services), and alternative investments.
  • Growth in digital wealth management platforms, making financial planning more accessible.
  • A rising HNI (High-Net-Worth Individual) base contributing to higher AUM (Assets Under Management) for financial institutions.

As the financial ecosystem matures, the wealth management sector continues to provide excellent returns by offering diversified investment solutions.

6. Technology and Digital Transformation: A Future-Ready Sector

India’s technology sector remains a key driver of innovation and economic progress. Companies specializing in software services, fintech, and AI-powered solutions continue to gain global market share.

Growth Drivers in Tech:

  • Adoption of cloud computing and SaaS (Software as a Service) solutions.
  • Expansion of digital payments and fintech platforms.
  • Investment in cybersecurity and blockchain solutions for secure digital transactions.

This sector’s consistent growth makes it an attractive investment opportunity for those seeking long-term capital appreciation.

Key Considerations When Investing

  • Supportive Government Policies: Focus on sectors benefiting from government schemes like PLI and NIP.
  • Private Sector Participation: Sectors such as commercial real estate and renewable energy are seeing increased participation from private investors.
  • Company Fundamentals: Prioritize companies with strong balance sheets, low debt, and consistent earnings growth.

Conclusion

Aligning with India’s economic growth and key trends, Right Horizons PMS focuses on sectors like manufacturing, renewable energy, infrastructure, consumer discretionary, wealth management, and technology. These sectors benefit from supportive government policies, rising demand, and technological advancements, offering a pathway to sustainable returns. Investing in these growth-oriented industries positions investors to capitalize on India’s momentum through Right Horizons PMS.

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