Top 1000 Companies Economic Review For The First Half of FY 2023-2024

Methodology 

We bring you the Vital Financial Data of Top 1,000 companies sorted by market capitalisation, as these are the stocks where liquidity is higher, and they represent a substantial portion of the trade as well as the market cap of the Indian listed companies. These companies are then categorised into 24 sectors to provide you with an insight into the general trend of the financial performance for the first half of FY24 against the first half of FY23. The raw data has been sourced from Accord Fintech Pvt Ltd (Ace Equity). The focus of financial data was more on revenue and profitability as many companies do not provide a balance sheet on a half-yearly basis. We hope that our readers get an overall perspective of the different sectors so that they are able to take stock and sectoral calls effectively! 

Compiled By - Aniket Gogate, Ashwin Urkude, Gaurav Taparia, Gyanesh Patodiya, Kamal Mansuriya, Kiran Shroff, Prajwal Patil, Prajwal Wakhare, Praveenkumar Yadav, Rakesh Deshmukh, Siddharth Mane, Vaishnavi Chauhan [EasyDNNnews:PaidContentStart]

Agriculture 

India holds a pivotal position in the global agricultural landscape, serving as the primary source of livelihood for approximately 55 per cent of its population. Boasting the world’s largest cattle herd (buffaloes), India’s agricultural prowess is evident in its status as the world’s largest producer of milk, pulses and spices. Additionally, India ranks second in the production of fruit, vegetables, tea, farmed fish, cotton, sugarcane, wheat, rice and sugar, firmly establishing its prominence in the global agricultural sphere. 

As reported by Inc. 42, the Indian agricultural sector is poised for a significant expansion, with its projected value reaching USD 24 billion by 2025. India’s food and grocery market stands as the world’s sixth-largest, with the retail sector accounting for a substantial 70 per cent of sales. The agricultural and processed food products sector in India has demonstrated notable growth in exports over the past year. In the fiscal year 2022-23, the country’s exports in this sector reached an impressive USD 53.12 billion. 

According to recent data, key commodities contributed significantly to this export performance. Wheat and other cereals accounted for USD 253.19 million, non-Basmati rice saw substantial exports amounting to USD 1.52 billion and oil meal contributed USD 445.79 million. Additionally, raw cotton exports stood at USD 231.26 million, sugar exports reached USD 711.43 million and spices contributed USD 1.11 million to the overall export figures. The agriculture and allied industry sectors have experienced significant advancements, investments and government support in recent years. 

Between April 2000 and June 2023, foreign direct investment (FDI) in agriculture services reached USD 4.75 billion. The agriculture and allied sectors have demonstrated robust performance in recent years, largely attributed to the government’s initiatives aimed at enhancing crop and livestock productivity. These measures include ensuring stable returns for farmers through price support, encouraging crop diversification and enhancing market infrastructure by promoting the establishment of farmer-producer organisations. Additionally, investments in infrastructure facilities facilitated by the Agriculture Infrastructure Fund have further contributed to the sector’s positive trajectory. 

Five private companies have been authorised by the central government to undertake cluster farming trials for specific horticulture crops on approximately 50,000 hectares. The trial initiative, involving a total investment of USD 91.75 million (₹ 750 crore), aims to explore and develop cluster farming models. The selection of the participating companies—Prasad Seeds, FIL Industries, Sahyadri Farms and Meghalaya Basin Management Agency—was conducted through a competitive bidding process for the pilot cluster farming programme. 

Financial Highlights 

The total market capitalisation of the industry is approximately ₹ 189,215.56 crore. Companies such as Manorama Industries Ltd., Balrampur Chini Mills Ltd. and Dalmia Bharat Sugar and Industries Ltd. have shown a robust jump in their revenue on a year-on-year (YoY) basis during H1FY24. The top companies delivering the highest PBIDT excluding other income growth were Balrampur Chini Mills, Dalmia Bharat Sugar and Industries and Avadh Sugar and Energy, which have delivered a surge by 1,203.39 per cent, 69.11 per cent and 131.92 per cent, respectively. 

If we look at the bottom-line as well, Balrampur Chini Mills, Dalmia Bharat Sugar and Industries and Avadh Sugar and Energy have reported substantial increment in their net profit which stands at ₹ 227.39 crore, ₹ 116.24 crore and ₹ 51.04 crore, respectively, during the first half of FY24 compared to the same period in the last financial year. The increase in profit after tax (PAT) also has been more than 100 per cent in each of the companies. 

Outlook 

The Agricultural Technology Management Agency (ATMA) Scheme has been rolled out in 704 districts spanning 28 states and five Union Territories, aiming to provide education to farmers. Grants-in-aid are disbursed to the state government through this scheme, with the objective of bolstering their initiatives to disseminate contemporary agricultural technologies and promote good agricultural practices in diverse thematic areas within the agriculture and allied sectors. To elevate the food processing industry and promote rural entrepreneurship nationwide, including rural areas, the Ministry of Food Processing Industries is actively executing several initiatives. 

These include the central sector umbrella scheme Pradhan Mantri Kisan Sampada Yojana (PMKSY), the Production Linked Incentive Scheme for the Food Processing Industry (PLISFPI), and the centrally sponsored PM Formalisation of Micro Food Processing Enterprises (PMFME) Scheme. The government has also established a dedicated fund known as the Food Processing Fund (FPF) with an allocation of approximately USD 265 million. This fund, housed within the National Bank for Agriculture and Rural Development (NABARD), aims to provide affordable credit to designated food parks and food processing enterprises located within these designated food parks. 

Automobile & Ancillaries

India’s automotive industry, a longstanding indicator of economic well-being, is experiencing a remarkable resurgence fuelled by rising demand and an eye toward sustainability. Two-wheelers occupy the top slot, driven by a burgeoning middle class and a young population eager for mobility. Rural markets are further propelling growth while increasing needs for logistics and passenger transportation are boosting the demand for commercial vehicles. However, the future shines brightest for electric vehicles, particularly three-wheelers and small passenger cars. 

It leads the pack in tractor production, stands second in bus manufacturing and ranks third in heavy truck production. The passenger vehicle sales reached 3.89 million in FY23, while total automobile exports stood at an impressive 47.6 million. This sector’s contribution to India’s GDP has witnessed a significant rise, climbing from 2.77 per cent in 1992-1993 to a remarkable 7.1 per cent today. 

A recent study by the CEEW Centre for Energy Finance estimates an opportunity worth USD 206 billion for EVs in India by 2030, requiring an investment of USD 180 billion in vehicle manufacturing and charging infrastructure. 

Looking ahead, India’s position as a key automobile exporter is expected to solidify further, fuelled by several government initiatives. The government is actively supporting the EV industry through various initiatives, including the extension of the FAME Scheme, Gujarat’s semiconductor policy, amendment to the National Policy on Biofuels and the PLI Scheme for automobiles and advanced chemistry cells. These initiatives are creating a favourable environment for the EV sector to thrive. 

Financial Highlights 

The automobile ancillary companies, which can be attributed as a sub-sector of automobile companies, play a very important role for automobile companies. The automobile ancillary companies have a market capitalisation of ₹ 370,208.62, which is contributed by 35 listed entities. Our financial analysis of the automobile ancillary stocks shows that Bosch Limited has the highest net profit and market capitalisation in H1FY24. Furthermore, Samvardhana Motherson International Limited is the highest revenue contributor of all the 35 listed entities in the stock market. 

Meanwhile, Jupiter Wagons Limited saw the highest sales growth of 129.24 per cent, followed by Craftsman Automation and Lumax Auto Technologies with 52 per cent and 46 per cent, respectively. The top five companies in terms of market capitalisation account for about 59 per cent and in terms of revenue about 54 per cent. Among the automobile ancillary sector stocks, Varroc Engineering Limited saw the highest YoY growth in revenue with a whopping 610.93 per cent growth. 

India’s automotive sector exhibited a steady performance in November 2023, with pockets of strong growth across various segments. Passenger vehicles (PVs) maintained stable demand, with Maruti Suzuki and Mahindra and Mahindra experiencing positive YoY sales driven by recent model launches. Twowheelers (2Ws) displayed healthy domestic growth, with brands like TVS, Bajaj Auto, Hero Moto Corp and Royal Enfield reporting significant YoY increases. On the export front, a gradual recovery is anticipated as the industry overcomes global challenges. 

The commercial vehicle (CV) segment witnessed mixed results, with muted demand in the heavy-duty segment but positive growth in light and small commercial vehicles. The bus segment continued its steady growth trajectory, driven by orders from state transportation undertakings. The agricultural tractor segment benefited from the festive season, with both Mahindra and Mahindra and Escorts reporting healthy YoY growth. 

Outlook 

Looking towards the future, the Indian automotive industry is poised for robust growth. Favourable economic conditions, rising disposable incomes, a young population and supportive government initiatives are all contributing to this positive outlook. The electric vehicle segment, in particular, holds immense potential, with both domestic and global markets anticipating significant growth. 

Bank

The Indian banking sector is thriving, fuelled by robust economic growth, increased disposable incomes and growing consumerism. Under the Pradhan Mantri Jan Dhan Yojana (PMJDY), over 486 million bank accounts have been opened, with deposits exceeding USD 24.2 billion. The demand for corporate and retail loans is on the rise, driven by sectors like services, real estate, consumer durables and agriculture. India’s rapidly growing financial technology (fintech) market boasts over 2,000 recognised businesses. With a youthful population, India is poised to become the world’s third-largest consumer economy by 2030. 

Despite global uncertainties, the banking sector remains stable, witnessing significant growth in credit and digital adoption. India dominates the global Android-based mobile lending app market with an 82 per cent share. The digital lending market surged from USD 110 billion in 2019 to an anticipated USD 350 billion in 2023, primarily led by fintech firms and NBFCs. Projected to reach USD 800 billion by 2030, digital lending is poised to constitute 60 per cent of India’s fintech sector, driven by increased formal finance access and rising per capita income. 

Government initiatives like Digi Dhan Mela in Uttar Pradesh reflect a broader ambition to establish India as a global leader in digital payments. In the fiscal year 2022-23, the total assets of public and private banking sectors amounted to USD 1,687.59 billion and USD 1,016.93 billion, respectively. Public sector banks constituted 58.81 per cent of the total banking assets, contributing to over 48.05 per cent of the interest income, reaching USD 102.48 billion. Meanwhile, private sector banks reported interest income of USD 70.04 billion. 

Public banks also accounted for 49.52 per cent of ‘other income’, totalling USD 14.46 billion, while private banks generated USD 13.10 billion in other income. PMJDY has significantly impacted financial inclusion, with over 486 million beneficiaries and a total of 50.18 crore beneficiaries banked as of August 2023, receiving direct benefit transfers totalling USD 24.2 billion. PMJDY accounts, tripling from 14.72 crore in March 2015 to 46.25 crore in August 2022, offer a formal financial system for the poor, helping them escape usurious money lenders. 

Digitalisation efforts, including NEFT, RTGS and IMPS transactions, have seen widespread adoption, and technology is integral to the business models of most banks. In fact, a huge percentage of the financial transactions are now conducted online. The Reserve Bank of India’s initiatives includes a digital agriculture finance system and a pilot project on central bank digital currency. In 2022, UPI transactions totalled 10.241 billion, reflecting a robust digital payment ecosystem, and the Union Budget 2023 emphasises a riskbased KYC strategy. 

Financial Highlights 

HDFC Bank, India’s largest private sector lender, reported a consolidated net profit of ₹ 16,811.4 crore for the quarter ending September 30, marking a significant 51.1 per cent increase from the same period last year. This follows the merger with HDFC Ltd. The net interest income saw a robust 49.4 per cent YoY growth, reaching ₹ 33,789.2 crore. Revenue from retail banking surged by 73.3 per cent to ₹ 60,859 crore, and wholesale banking more than doubled to ₹ 47,298.6 crore. The bank’s total deposits grew 29.8 per cent to ₹ 2,172,858 crore and gross loans rose 57.7 per cent to ₹ 2,354,633 crore as of September 30, 2023. 

The total balance-sheet reached ₹ 34.2 lakh crore, indicating a substantial 53.3 per cent YoY increase. In Q2 2023-2024, ICICI Bank Ltd. recorded a notable 26.7 per cent YoY surge in revenue, reaching ₹ 57,627.71 crore with a 10.11 per cent growth in the last quarter. The bank’s net profit saw a substantial 36.08 per cent YoY increase, totalling ₹ 10,896.13 crore and a 2.44 per cent growth in the last quarter. Despite a 7.41 per cent YoY rise in net profit margins to 18.91 per cent, there was a – 6.96 per cent quarterly decline. 

Outlook 

The evolution of technology has propelled mobile and internet banking to the forefront, prompting the banking sector to prioritise enhanced services and technological upgrades for a superior customer experience and a competitive edge. India has witnessed a surge in fintech and micro-financing, with digital lending reaching USD 75 billion in FY18 and projected to hit USD 1 trillion by FY23, driven by a substantial increase in digital disbursements. The Indian fintech market, attracting USD 29 billion in funding across 2,084 deals, ranks second globally in deal volume. By 2025, it is anticipated to reach ₹ 6.2 trillion (USD 83.48 billion).
 

Capital Goods

The capital goods manufacturing industry in India plays a crucial role in various sectors, including engineering, construction, infrastructure and consumer goods. This sector serves as a strong base for India’s economic growth and development. In recent years, there have been significant initiatives and developments aimed at indigenising manufacturing capabilities and driving growth in the capital goods industry. Heavy electrical and power equipment, earthmoving and mining machinery and process plant equipment are the leading export subsectors within the capital goods industry in India. 

These subsectors collectively account for approximately 85 per cent of the country’s total capital goods exports. The Indian government has set ambitious targets for the capital goods industry. By 2025, the target production size for capital goods is expected to reach USD 112 billion. Additionally, the electrical equipment industry, including generation, transmission and distribution (T and D) equipment, is targeted to reach a size of USD 100 billion by 2025 with the T and D equipment segment specifically targeted to reach USD 75 billion. To attract investments and promote growth in the capital goods sector, India allows 100 per cent foreign direct investment under the automatic route. 

This policy encourages international companies to establish their presence in India and contribute to the development of the capital goods industry. Several factors are poised to provide a significant boost to the Indian capital goods industry in the near term. Global companies adopting a ‘China Plus One’ strategy to diversify their supply chains, the government’s emphasis on infrastructure and manufacturing, and domestic companies’ capex plans contribute to the positive outlook for the sector. The investment cycle in the capital goods industry is showing positive signs with order inflows, short-cycle revenues and capital goods imports indicating a build-up in the investment activity. 

However, experts suggest that the momentum needs to strengthen further to keep pace with cyclical expectations and overcome macroeconomic challenges. Additionally, policy reforms such as tax concessions, production-linked incentives (PLI Scheme) and import bans aim to attract investments and promote manufacturing in India. The current investment cycle in the capital goods industry is driven by multiple factors across various sectors, enhancing its breadth and sustainability. Manufacturing, renewable energy, roads and urban infrastructure, real estate, logistics, warehousing, data centres and defence indigenisation are among the sectors offering opportunities for capex and growth in the industry. 

Financial Highlights 

Hindustan Aeronautics and Bharat Dynamics, both operating in the engineering and defence sectors, have shown consistent growth in net sales and profitability. Their financial performance has improved over the years with higher revenue, operating profits and net profits. These companies have managed to maintain healthy profit margins, indicating effective cost management and operational efficiency. Industrial equipment companies like Bharat Electronics and The Anup Engineering have shown growth in net sales and profitability, with an impressive increase in share price. 

The Anup Engineering, engaged in the fabrication of top-end process equipment such as reactors, heat exchangers shell and tube, helical baffle and EM baffle exchangers, columns, pressure vessels, etc. has successfully maintained consistent profit margins, demonstrating efficiency in its operations. Electric equipment company Suzlon has shown impressive results and stock performance in the past few quarters due to business outlook and growing order book along with a decrease in debt. Engineering companies like Pitti Engineering and Inox Green Energy Services have shown growth in the past few quarters. 

Outlook 

In the fourth quarter of FY24, the capital goods sector is expected to perform well due to strong order books, ongoing project execution and increase in demand from both the domestic and international markets. The key factors to monitor include margin guidance considering lower commodity prices, order pipeline and working capital management. Companies with solid balance-sheets, good governance, efficient working capital and long-term scalability are preferred. Strong order inflows are anticipated driven by significant wins in various sectors and an uptick in private investment.
 

Chemicals

The chemical sector is a crucial contributor to the Indian economy, supporting a wide range of products from petrochemicals to medications. It plays a pivotal role in industrial and agricultural development, impacting over 80,000 commercial items and enhancing overall quality of life. However, the sector is currently experiencing a downturn, with most listed chemicals witnessing significant declines in last traded prices compared to 52-week highs. This trend is evident over various timeframes, indicating a challenging operating environment in recent weeks, months, and years. Despite robust domestic demand, competitive pricing pressure from China poses challenges, particularly for commodity chemicals. 

The specialty chemicals industry, heading into H2FY24E, anticipates difficulties such as weak demand, declining prices, and negative operating leverage, exacerbated by issues like Chinese dumping and the economic crisis in Europe. Nonetheless, companies with strong research and development capabilities in specialty chemicals may find resilience in custom synthesis manufacturing or contract development and manufacturing operations. Agrochemical firms are grappling with challenges due to unseasonal rainfall. To navigate these difficulties, industry stakeholders must closely monitor management commentary on demand outlook, supply chain dynamics, price realization trends, and updates on capital expenditure plans to ensure sustained success in the chemical industry. 

Financial Highlights 

In our examination of 83 companies within the sector, we compared their financial performance in the first half of the financial year H1FY24 with the corresponding period in the previous year H1FY23. Overall, the sector experienced negative growth primarily due to elevated valuations that eventually corrected, compounded by China’s involvement in the market through chemical dumping and destocking activities across various financial indicators such as net sales, other operating income, profit before interest, depreciation and tax (PBIDT), as well as profit after tax. 

The aggregate revenue (top-line) for the sector witnessed a significant decline of 10 per cent, dropping from ₹ 249,877 crore in H1FY23 to ₹ 223,864 crore in H1FY24. However, the operating profit (PBIDT) for H1FY24 showed resilience, increasing by 19 per cent from ₹ 36,734 crore in H1FY23 to ₹ 29,675 crore. Conversely, the profit after tax for the sector experienced a decline of 22 per cent, decreasing from ₹ 22,598 crore in H1FY23 to ₹ 17,546 crore in H1FY24. 

Analysing the performance of individual companies in the first half of the financial year 2024 (H1FY24), Sadhana Nitro Chem Ltd. stood out as the top performer. Its sales increased by 27 per cent year-on-year (YoY), reaching notable figures. Furthermore, the company’s operating profit (PBIDT) and profit after tax (PAT) showed remarkable growth, surging by 200 per cent and 303 per cent YoY, respectively. It's noteworthy that only 22 out of the 83 companies managed to achieve positive growth in both top-line and bottom-line, indicating the pervasive challenges and pressures faced by the chemical sector during this period. 

Outlook 

The Indian chemical and petrochemical sector is poised for significant growth, with an anticipated threefold surge in demand reaching USD 1 trillion by 2040. The government's proposed Production Linked Incentive (PLI) Scheme aims to boost domestic manufacturing and exports, particularly in specialty chemicals, presenting a vital catalyst for industry growth. Kamal Nanavaty, President of the Chemicals and Petrochemicals Manufacturers Association (CPMA), emphasizes the need for a tenfold increase in production capacity by 2050 to meet escalating demand, projected to double every nine years at an annual rate of 8 per cent. Despite global economic challenges such as sluggish demand, European recession, U.S. inflation, and modest Chinese rebound, the industry must prioritize cost reduction, efficiency improvement, and a shift towards sustainability and trustbuilding initiatives. 

The 2024 outlook foresees slow growth, prompting a focus on cost-saving measures, digitalization, circular economy initiatives, and collaborative efforts with end customers to strengthen resilient supply chain models. While challenges like declining chemical prices persist, strategic positioning in the specialty chemicals value chain, particularly in fluorination and capital expenditure plans, offers long-term benefits amid the industry's transformative phase, even in the face of subdued export-led demand in a weak global macroeconomic environment.
 

Construction

The construction industry is the backbone of our modern world, from towering skyscrapers to intricate bridges, crafting the very fabric of our modern world. It plays a crucial role in driving economic growth, generating employment opportunities, and enhancing the quality of life. According to the United Nations, India's population will reach 1.64 billion by 2047, with metropolitan areas housing an estimated 51 percent of the population. By 2025, India's construction industry is anticipated to be worth USD 1.4 trillion. 

By 2030, urban construction will fuel this increase; cities are estimated to contribute 70 per cent of India's GDP. In 2022, the Indian construction market valued at USD 701.7 billion. According to global data, the construction market is expected to increase at a rate of more than 5 per cent per year from 2024 to 2027. The construction industry market in India works across 250 sub-sectors with linkages across sectors. An estimated 600 million people are likely to be living in urban centres by 2030, creating a demand for 25 million additional mid-end and affordable units. The construction sector grew by 13.3 per cent year-on-year in July-September, 2023, compared with 7.9 per cent in the previous quarter and the best result in five quarters. 

Financial Highlights 

To provide a complete financial picture, we evaluated the major firms in each sub-sector, such as cement and building materials, ceramics, sanitary ware, glass, laminates, and wood goods, and compared their performance in H1FY24 to H1FY23. These firms have a total market capitalisation of 6,07,607 crore, of which Ultratech Cement owns 41 per cent. While the revenue of Ultratech Cement, a large cement maker, increased by around 16 per cent, profit after tax increased by more than 26 per cent. Shree Cement and Dalmia Bharat also control a sizable share of the industry's total market capital. 

In terms of industry operational efficiency, all elements except one earned solid profit margins in H1FY24. Looking at the percentage change in operating profit margins, over 63 per cent of enterprises saw an increase. Revenue and net profits in the ceramics, sanitary ware, glass, and wood goods industries increased in a mixed bag. Pokarna, Jaiprakash Associates, and Kesoram Industries outperformed outstandingly in terms of net profit growth, while Borosil Renewables doubled its sales in H1FY24 compared to H1FY23. 

Outlook 

The Smart City Mission (with a target of 100 cities) is expected to improve quality of life through modernised technologydriven urban planning. Under a Technology Sub-Mission of Pradhan Mantri Awas Yojana – Urban (PMAY-U), 54 worldwide breakthrough construction technologies have been selected to assist in a new age in the Indian building technology industry. The Pradhan Mantri Awas Yojana received ₹ 79,000 crore in the Union Budget 2023-24, with ₹ 25,103 crore intended for the urban sector and the remainder for rural India. 

Work orders for 7,804 Smart Cities Mission projects worth ₹ 1,81,322 crore had been issued as of January 27, 2023, according to the ministry. Of them, 5,246 projects for ₹ 98,796 crore have been completed, while 2,558 projects worth ₹ 82,526 are slated to be completed this year. Between April 2000 and March 2023, FDI in the construction development and construction activity sectors totalled USD 26.35 billion and USD 29.68 billion, respectively. By 2025, major city real estate demand is expected to rise by 15-18 million square feet. As many as 372 cold chain projects have been sanctioned across states with a combined capacity of 10.28 lakh MT of cold storage/CA/MA storage/frozen store until October 2023. 

By 2025, the top eight Tier I cities' warehouse stock is estimated to reach roughly 500 million square feet, including considerable Grade A stock. More than 40 per cent of India's population is predicted to live in cities by 2030, creating a demand for 25 million new affordable dwellings. The expansion of cities will increase energy demand for powering buildings, making Energy Conservation Building Code (ECBC) crucial. Technological innovations are transforming the construction sector by increasing cost efficiency, reducing building timelines, and raising quality standards. 

Consumer Durables

A broad variety of consumer durable products are becoming increasingly in demand due to India’s continued rise in disposable income and technological advancements. The numerous consumer durable brands that are offered throughout the nation are therefore engaged in intense rivalry with one another. Multinational corporations consider India to be one of the main markets where future growth is expected to originate. Electronics exports increased 13.8 per cent in FY23 (April–November), the highest rate in the previous six years. 

India hopes to reach USD 300 billion in electronics production and USD 120 billion in electronics exports by FY26 with strong growth. The country is expected to rank fifth in the world by 2025 in terms of its consumer electronics and appliances sector. It is anticipated that the Indian appliances and consumer electronics (ACE) industry will almost quadruple in the next three years, accounting for over 1.48 lakh crore (USD 17.93 billion) by 2025. In 2021, the Indian consumer electronics and appliances market was valued at USD 9.84 billion. 

By 2025, it is projected to have more than doubled, reaching USD 21.18 billion, or ₹ 1.48 lakh crore. By 2022, the nation was producing USD 87 billion worth of electronics gear. At a compound annual growth rate (CAGR) of 1.31 per cent, the consumer electronics and home appliances market in India is expected to expand by USD 2.3 billion between 2022 and 2027. All this data indicates the kind of scope that this industry offers to its players. Electronic products, in particular, are gaining in popularity due to the convenience they offer to homemakers. 

Financial Highlights 

In the first half of 2023, 4.5 million televisions were supplied to India, according to research published by the International Data Corporation (IDC). Xiaomi, which is concentrating more on its TV portfolio, particularly the 5A and Redmi series, continues to lead the TV market during this period with a 14 per cent share. A Morgan Stanley analysis states that the market for smart phones might triple to USD 90 billion by 2032 as a result of a booming economy and shifting customer demographics. Apple plans to increase its manufacturing production outside of China, with India and Vietnam likely to benefit from this decision. 

Apple plans to move more than 18 per cent of its iPhone production to India by 2025, up from 7 per cent in 2023. V-Guard Industries plans to invest in new manufacturing plants and open four additional factories in Hyderabad, Vapi and Uttarakhand over the next 12 months. Lenovo is expanding its local manufacturing capabilities in India across product categories like PCs, laptops and smart phones to satisfy rising consumer demand. TCL Group plans to start manufacturing handsets and TV display panels in Andhra Pradesh, recruiting 1,000 employees. 

Goat Brand Labs acquired 80 per cent of Chumbak in June 2023. Vivo India has invested USD 290 million, with a further USD 133.41 million expected by the end of 2023 to increase manufacturing capacity and support the government’s vision of making India a global export hub. Government initiatives have selected 42 companies under the Production Linked Incentive Scheme for white goods, creating additional direct employment for 44,000 people. It is this proactive step by the government that is adding to the growth of the industry. 

Outlook 

The electronics industry in India is expected to experience growth due to factors such as economic stability, Digital India programme implementation as well as disposable incomes, evolving lifestyles, organised retailing expansion, electricity availability, internet infrastructure and improved logistics systems. International brands and supply chain partners have invested heavily in India’s electronics manufacturing infrastructure. The US’ and European OEMs are considering exploring alternative countries for supplementary production, rather than outright replacing China. 

India is in a favourable position to benefit from these advantages, as it can reap gains from the China + 1 strategy, which diversifies supply chains. Domestic electronics manufacturers are expected to focus on localising their supply chain due to increased domestic consumption and outsourcing activities. This will lead to the establishment of local component ecosystems and increased domestic component sourcing capacity. Emerging technology, such as IoT, AI and robotics integration, is also contributing to the diminishing lifecycles of electronic products, thereby increasing demand and strengthening the ecosystem.
 

Financial Services

India's financial sector is experiencing rapid expansion, marked by the robust growth of existing financial services firms and the entry of new entities. The sector is diverse, encompassing commercial banks, insurance companies, non-banking financial companies (NBFCs), cooperatives, pension funds, mutual funds, and other smaller entities. While the recent introduction of payment banks has diversified the landscape, commercial banks remain dominant, accounting for over 64 per cent of total assets. 

The Government of India has implemented reforms to liberalise and regulate the industry, with a focus on facilitating finance access for micro, small and medium enterprises (MSMEs). The collaborative efforts of the government and the private sector position India as one of the world's most vibrant capital markets. As of October 2023, India's mutual funds industry manages AUM worth ₹ 46.71 trillion, marking a five-fold increase in a decade. 

SIP inflows reached ₹ 1.07 lakh crore by October 31, 2023, with net inflows of ₹ 19,957.17 crore in October, showing a 41.62 per cent MoM growth. In FY23, the life insurance sector recorded a total first-year premium of USD 32.04 billion, while non-life insurance premiums reached USD 22.5 billion (₹ 1.87 lakh crore) by December 2022. BSE's partnership with Ebix Inc. aims to establish a robust insurance distribution network, leveraging the relaxation of foreign investment rules. 

The insurance market is anticipated to reach USD 250 billion by 2025, with a potential USD 78 billion in additional life insurance premiums from 2020-30. India's fintech sector, especially mobile wallets, is poised to grow, reaching an estimated USD 4.4 billion by 2022, with transactions touching USD 388.8 billion (₹ 32 trillion). The private wealth management industry is promising, with India projected to have 6.11 lakh high net worth individuals (HNWIs) by 2025, making it the fourth-largest private wealth market globally by 2028. 

Financial Highlights 

In total there are about 89 companies in the financial services sector and here’s how some of the major players in the sector have performed. Bajaj Finance, which is mainly engaged in the business of lending and a diversified lending portfolio across retail, SME and commercial customers with a significant presence in urban and rural India. In H1FY24 the company reported revenue of ₹ 25,876.07 crore which grew by 34.43 per cent from ₹ 19,249.32 crore in H1FY23, while the EBITDA of the company grew by 39.37 per cent and stood at ₹ 18,253.96 crore as against to ₹ 13,097.81 crore in H1FY23. 

Moreover, the EBITDA margin expanded 250.8 bps to 70.54 per cent. Similarly, the net profit of the company jumped by 29.90 per cent and reached ₹ 6,984.71 crore as compared to ₹ 5,376.90 crore in H1FY23. HDFC AMC serves as the investment manager for HDFC Mutual Fund and is duly registered under SEBI to offer portfolio management services. In H1FY24 the company reported revenue of ₹ 1,217.62 crore which surged by 14.19 per cent from ₹ 1,066.30 crore in H1FY23, while the EBITDA of the company grew by 14.52 per cent and stood at ₹ 909.51 crore as against to ₹ 794.22 crore in H1FY23. Moreover, the EBITDA margin expanded by 21.57 bps to 74.70 per cent. Similarly, the net profit of the company jumped by 34.73 per cent and reached ₹ 913.93 crore as compared to ₹ 678.32 crore in H1FY23. 

Outlook 

The financial services industry in India is poised for continued growth, with projections indicating a positive trajectory. The private wealth management industry, insurance market, and mutual funds sector are expected to witness substantial expansion. The relaxation of foreign investment rules and the collaboration between global and local players in joint ventures are anticipated to further shape the industry's landscape. 

The fintech sector, driven by innovation, is likely to play a pivotal role in shaping the future of India's financial services. In conclusion, India's financial services sector presents a dynamic and evolving landscape, showcasing resilience and adaptability in the face of change. The collaborative efforts of the government, regulatory bodies, and private enterprises position India as a key player in the global financial ecosystem.
 

FMCG

The fast-moving consumer goods (FMCG) sector in India has experienced significant growth due to consumer-driven growth and higher product prices, particularly for essential goods. The sector employs around 3 million people, accounting for 5 per cent of total factory employment in India. The segment’s key growth drivers include favourable government initiatives, a growing rural market and youth population, new branded products, and the growth of e-commerce platforms. 

Resilience is crucial in the manufacturing process, daily operations, retail and logistic channels, consumer insights and communication to help FMCG companies withstand the test of time and create more value for consumers in the long run. The FMCG sector in India grew 7.5 per cent by volume in the April-June 2023 quarter, the highest in the last eight quarters, driven by a revival in rural India and higher growth in modern trade. 

India’s middle-class population, larger than the total population of the USA, is a significant contributor to the country’s GDP. The Indian FMCG market continues to grow as more people move up the economic ladder and the benefits of economic progress become accessible to the public. Government initiatives to increase financial inclusion and establish social safety nets have further aided this growth. 

Financial Highlights 

The Indian food processing market is expected to reach USD 547.3 trillion by 2028, with a CAGR of 9.5 per cent. Digital advertising is expected to grow at a CAGR of 14.75 per cent, reaching ₹ 35,809 crore by the end of FY23. The FMCG industry is the largest contributor to digital spending. From 2000 to March of 2023, the food processing sector received USD 11,979.21 million in FDI. The Union government approved a new PLI Scheme for the sector, with incentives disbursed for six years to 2026-27. 

In 2023, VLCC acquired Ustraa, Reliance Retail Ventures completed Lotus Chocolate’s acquisition, ITC plans to acquire 100 per cent of Sproutlife Foods, and Hindustan Unilever Limited entered the health and wellbeing category through strategic investments in Zywie Ventures Private Limited and NutritionaLab Private Limited. The Union Budget 2023-24 has allocated USD 976 million for the PLI Scheme to reduce import costs, improve domestic competitiveness, increase domestic capacity, and promote exports. The budget also focuses on reviving rural demand by increasing disposable income, farm allocation, and funding rural infrastructure and mobility. 

Outlook 

In Q2FY24, demand trends were positive in both rural and urban markets, but a patchy monsoon and higher food inflation dampened buyer sentiment. Companies cut prices to pass on lower input costs, but this failed to invigorate volumes due to heightened competition from regional players and the challenging demand environment. Despite this, coverage continued to post robust EBITDA margin expansion. FMCG companies faced intense competition from regional players due to price moderation in key commodities, which may explain the muted volume growth and market share loss in certain categories. 

Companies under coverage reduced prices to protect market share and anticipate gradual volume recovery in H2FY24. The demand climate is expected to improve in H2FY24, allowing consumer players to sustain growth. Companies with strong product slates, large rural presence, robust launch pipelines, and localised marketing are best placed to continue growing and gaining market share. 

In India, the FMCG sector’s key growth drivers include government initiatives, a growing rural market, new branded products, and e-commerce platforms. The number of active internet users in India is expected to rise to 900 million by 2025. Indian villages contribute more than 35 per cent to annual FMCG sales, and e-commerce accounts for 17 per cent of the overall consumption among affluent buyers. The food and beverage sector is a crucial component of the FMCG market, accounting for about 3 per cent of India’s GDP. 

Healthcare 

The industry consists of hospitals, medical devices, clinical trials, outsourcing, telemedicine, medical tourism, health insurance and medical equipment. The Indian healthcare industry is growing at a rapid pace due to a number of factors, including increasing investment by both public and private players, expanding coverage of healthcare services, and rising healthcare expenditure. According to IBEF, the Indian healthcare market, which was valued at USD 86 billion in 2016, is now expected to reach USD 367 billion by 2023 and USD 638 billion by 2025, up from USD 86 billion in 2016. 

According to the BCG Group estimate, digitisation in Indian healthcare would increase tenfold, from USD 2.7 billion in 2022 to around USD 37 billion by 2030. Through the use of technology, the Indian government and health technology businesses are collaborating to improve healthcare accessibility and cost. Digital healthcare is emerging as a crucial growth factor in India’s healthcare sector. In fact, robotics is now emerging as an important element in the healthcare sector with an increasing number of surgeries depending on this sub-segment. 

Financial Highlights 

For a more detailed financial scenario, we looked at leading companies in each segment, such as hospital and healthcare services, medical equipment and pharmaceuticals and drugs and compared their performance in H1FY24 to H1FY23. These companies have a combined market capitalisation of ₹ 17,191,40.78 crore, of which 17 per cent belongs to Sun Pharmaceutical Industries, which reported an 11 per cent increase in net sales while seeing a 1 per cent increase in net profit. Healthcare Global Enterprises led the hospital and healthcare services sector in net profit growth, with an 81 per cent increase in H1FY24 compared to H1FY23. 

Artemis Medicare Services was the clear winner in terms of business efficiency, with a 37 per cent increase in net profit. Lupin posted the biggest profit gain of 1,891 per cent in pharmaceuticals and drugs from H1FY23 to H2FY24. In terms of profitability, Aster DM Healthcare and Dishman Carbogen Amcis were the lowest performing corporations in the hospital and healthcare services and pharmaceuticals and medications industries, respectively. Despite being able to generate significant income, around 28 per cent of businesses failed to maintain profitability in H1FY24. 

Outlook 

The Ministry of Health and Family Welfare has been granted ₹ 89,155 crore in the Union Budget 2023-24, a 3.43 per cent increase above ₹ 86,200.65 crore in 2021-22. PMSSY received ₹ 3,365 crore, Human Resources for Health and Medical Education received ₹ 6,500 crore, the National Health Mission received ₹ 29,085 crore, and Ayushman Bharat - PMJAY received ₹ 7,200 crore. FDI inflows into the drugs and pharmaceuticals sector totalled USD 21.46 billion between April 2000 and March 2023. FDI inflows into India for 2022-23 were USD 70,970 million. 

Between April 2000 and March 2023, inflows into industries such as hospitals and diagnostic centres and medical and surgical appliances totalled USD 8.73 billion and USD 2.80 billion, respectively. The national and state governments planned 2.1 per cent of GDP for the health sector in FY23 and 2.2 per cent in FY22, up from 1.6 per cent in FY21. The government intends to increase public health spending to 2.5 per cent of the GDP by 2025. Medical tourism in India is a booming sector, with a market value of USD 13.42 billion predicted by 2026. 

Telemedicine, artificial intelligence, mobile and wearable devices and robotic surgeries are the four primary trends that are about to drive healthcare. Robotic surgeries will grow at a 20 per cent CAGR to USD 350 million by 2025. The Indian home healthcare market is expected to grow at a compound annual growth rate of 19.2 per cent, driven by factors such as an ageing population, the rising prevalence of chronic diseases requiring long-term care and increasing demand for personalised care. 

To meet the aim of three beds per 1,000 people by 2025, India needs to add 3 million beds. By 2030, the country will have one doctor for every 800 patients. To address the rising demand for healthcare, an extra 1.54 million doctors and 2.4 million nurses will be needed. By 2030, it is projected that more than USD 500 billion will have been invested on medical infrastructure. All this goes to indicate the huge potential that lies in this sector with the need for not only human resources but also equipment and services. 

Hospitality

India’s vast landscape showcases a rich cultural and historical heritage, diverse ecology, and natural beauty. The hospitality and tourism sector, recognising this immense potential, is a vital component of India's services sector, emerging as a key driver of economic growth. Despite challenges posed by the corona virus pandemic, the sector has shown resilience and is poised for recovery. The tourism and hospitality industry, encompassing travel services, hotels, and restaurants, plays a pivotal role in socioeconomic development. 

It is a major source of foreign exchange, contributing 6.8 per cent to India's GDP in 2019 (₹ 1,368,100 crore or USD 194.30 billion). In 2020, the sector accounted for 39 million jobs, 8 per cent of the total employment. By 2028, the industry's contribution to GDP is expected to reach USD 512 billion. The travel market in India is projected to reach USD 125 billion by FY27, driven by a rising airline travel market (estimated at ~USD 20 billion) and a hotel market (estimated at ~USD 32 billion) expected to reach ~USD 52 billion by FY27. 

International tourist arrivals are forecasted to reach 30.5 billion by 2028, with domestic tourists driving post-pandemic growth. Efforts to boost infrastructure, growing access to passports, and surging demand from travellers are contributing to the sector's growth. International hotel chains are increasing their presence, with an expected 50 per cent share in India's tourism and hospitality sector by 2022. Foreign tourist arrivals (FTAs) in March 2023 showed a positive growth rate of 132.5 per cent. 

Financial Highlights 

In total there are about 15 companies in the hospitality sector and here’s how some of the major players in the sector have performed. The Indian Hotels Company is primarily engaged in the business of owning, operating and managing hotels, palaces and resorts. In H1FY24 the company reported revenue of ₹ 2,899.57 crore which grew by 16.04 per cent from ₹ 2,498.68 crore in H1FY23, while EBITDA of the company grew by 13.86 per cent and stood at ₹ 764.95 crore as against ₹ 671.86 crore in H1FY23. 

Moreover, the EBITDA margin contracted 50.71 bps to 26.38 per cent. Similarly, the net profit of the company jumped by 27.54 per cent and reached ₹ 370.51 crore as compared to ₹ 290.51 crore in H1FY23. EIH is primarily engaged in owning and managing premium luxury hotels and cruisers under the luxury Oberoi, Trident and Maidens brands. The company is also engaged in flight catering, airport restaurants, project management and corporate air charters. 

In H1FY24 the company reported revenue of ₹ 1,028.67 crore which surged by 29.34 per cent from ₹ 795.34 crore in H1FY23, while the EBITDA of the company grew by 62.01 per cent and stood at ₹ 298.40 crore as against ₹ 184.19 crore in H1FY23. Moreover, the EBITDA margin expanded by 584.97 bps to 29.01 per cent. Similarly, the net profit of the company jumped by 94.88 per cent and reached ₹ 192.70 crore as compared to ₹ 98.88 crore in H1FY23. 

Outlook 

The emerging trend of "staycation," where individuals seek stress relief through peaceful getaways at luxurious hotels, is gaining prominence. Major hotel chains like Marriott International, IHG Hotels and Resorts and Oberoi Hotels are introducing tailored staycation offers, providing guests with curated experiences within the hotel premises. India's travel and tourism industry show immense growth potential, anticipating a surge in tourist inflow with the expansion of the e-visa scheme. 

The sector is projected to expand by 2.5 per cent, supported by increased budgetary allocation and affordable healthcare facilities, as per a joint study by ASSOCHAM and Yes Bank. Undoubtedly, the tourism industry is evolving into a significant economic force, poised to contribute to development. Beyond fostering economic growth, it enhances living standards by creating diverse employment opportunities. 

By 2028, the Indian tourism and hospitality sector is expected to generate USD 50.9 billion in visitor exports, a substantial increase from USD 28.9 billion in 2018. India's tourism and hospitality sector, with its rich heritage and diverse attractions, is on a trajectory of sustained growth. Despite the setbacks posed by the pandemic, the industry's resilience, coupled with strategic efforts and investments, positions it for robust expansion and a significant contribution to India's economic landscape.

Infrastructure

Infrastructure stands as a vital catalyst propelling India towards a USD 26 trillion economy. Aligned with the government's dedication to fortifying physical assets, it complements initiatives fostering efficiency and costeffectiveness, endorsed by Prime Minister Narendra Modi for good governance. Traditionally, 80 per cent of infrastructure spending focused on transportation, electricity, water, and irrigation. 

While still pivotal, a changing environmental and demographic landscape necessitates a broader perspective. The imperative for enhanced delivery across housing, water, sanitation, digital, and transportation sectors is evident, promising economic growth, improved quality of life, and heightened sectoral competitiveness. 

Financial Highlights 

Larsen & Toubro Ltd. has solidified its position as a market leader with the largest market capitalisation. As a multinational conglomerate, it specialises in providing engineering, procurement, and construction (EPC) solutions across diverse sectors, including infrastructure, hydrocarbon, power, process industries, defence, information technology, and financial services, catering to both domestic and international markets. In the first half of FY24, the company reported a robust 25.80 per cent increase in its top-line, reaching ₹ 98,906.41 crore in comparison to the same period in FY23. 

Following closely in the market is Rail Vikas Nigam Ltd (RVNL), functioning as an extended arm of the Ministry of Railways. RVNL serves as an umbrella SPV (special purpose vehicle), undertaking project development and resource mobilisation. In H1FY24, RVNL reported a 9.80 per cent increase in net sales, reaching ₹ 10,485.89 crore, with a significant 24.25 per cent surge in the bottom-line, totalling ₹ 705.66 crore. 

However, not all players experienced a smooth performance. NCC Ltd. faced challenges, with a 1.61 per cent decline in net profit, amounting to ₹ 9,100.00 crore in H1FY24. Similarly, IRB Infrastructure Developers Ltd. witnessed a 36.96 per cent decrease in revenue, totalling ₹ 22,875.73 crore. Overall, the performance of various companies displayed bullish trends, but some players encountered challenges in the market dynamics. 

Outlook 

India's budget for 2023-24 has underscored a substantial surge in capital investment for infrastructure, witnessing a remarkable 33 per cent increase to reach ₹ 10 lakh crore, constituting 3.3 per cent of the GDP. Notably, a record outlay of ₹ 2.40 lakh crore for Ihndian Railways, marking a nine-fold increase from the 2013-14 outlay, highlights a robust commitment to the sector's development. The airport sector sets its sights on a capital outlay of approximately ₹ 98,000 crore for expansion and modification over the next five years. Concurrently, India's metro rail network, ranked fifth globally, is gearing up for significant expansion. 

With a targeted expenditure of USD 1.4 trillion on infrastructure over the next five years through the National Infrastructure Pipeline, India positions itself for a transformative phase, with substantial contributions expected from the private sector. The urban housing initiative under the Pradhan Mantri Awas Yojna has already sanctioned 122.69 lakh houses as of August 22, 2022. Global investment and partnerships, exemplified by forums like the India-Japan collaboration for Northeast development, signal an optimistic trend, fostering increased investments. 

The Maritime India Vision 2030 outlines substantial investments in world-class infrastructure at Indian ports, aligning with India's pursuit of self-reliance in future-ready and sustainable critical infrastructure. An estimated investment of USD 840 billion over the next 15 years into urban infrastructure is deemed essential for India's development. The shift propelled by digitalization and opportunities in Tier II and III cities is bridging the gap between metros and non-metros, evident in the exponential growth of commercial real estate. 

The residential sector is witnessing robust sales, with the top-seven cities projected to exceed 360,000 units in 2022. The Civil Aviation Ministry's ambitious Vision 2040 envisages 190-200 functioning airports in India by 2040. In essence, India's infrastructure sector is a linchpin for economic growth, with strategic initiatives, augmented budgets, and global collaborations steering a transformative trajectory. As the nation embarks on a journey toward sustainable development and self-reliance, the infrastructure sector is poised for substantial expansion, poised to make positive contributions to the country's economic ecosystem.
 

Information Technology

The information technology (IT) sector remains a vibrant force, driving innovation and shaping the global economy. Despite headwinds like the ongoing pandemic and geopolitical uncertainties, the sector continues to witness remarkable growth, fuelled by rapid technological advancements and evolving consumer demands. Businesses are increasingly embracing the cloud for its scalability and cost-effectiveness, utilizing SaaS and PaaS models for easy access to critical applications without hefty upfront investments. 

Artificial intelligence is rapidly reshaping industries, with machine learning algorithms automating tasks, analysing vast data, and generating valuable insights that improve decisionmaking and boost productivity. As reliance on digital technologies grows, so do sophisticated cyber threats, prompting organizations to invest heavily in robust cybersecurity solutions to protect data privacy. 

Big data analytics is unlocking the potential of massive datasets, enabling businesses to gain actionable insights for better customer understanding, targeted marketing campaigns, and optimised processes. Finally, the interconnectedness of devices through the Internet of Things is transforming industries, creating exciting opportunities in smart homes, connected cars, industrial automation, and environmental monitoring, ultimately revolutionising our lives in profound ways.

Financial Highlights

The overall market capitalisation of the information technology sector stood at ₹ 34.55 lakh crore as of December 2023, of which 36.8 per cent is contributed by Tata Consultancy Services Ltd. and 17.34 per cent by Infosys Ltd. The IT industry accounted for 7.4 per cent of India’s GDP in FY22, and it is expected to contribute 10 per cent to India’s GDP by 2025. Moving to the IT - software industry, giants like Tata Consultancy Services Ltd. (TCS) and Infosys Ltd. maintained their dominance with a significant market capitalisation of ₹ 12,69,855.48 crore and ₹ 5,98,928.61 crore, respectively. 

TCS demonstrated steady growth in net sales and other operating income, PBIDT and profit after tax (PAT), with positive changes in percentage terms. Infosys, while exhibiting a comparatively slower growth rate, maintained stability across key financial metrics. Several mid-sized players in the IT - software industry, such as Persistent Systems Ltd., L&T Technology Services Ltd., and Happiest Minds Technologies Ltd., displayed noteworthy financial performances, achieving growth in key indicators. 

On the other hand, companies like Oracle Financial Services Software Ltd. and Coforge Ltd. faced challenges in certain aspects despite overall positive performance. One97 Communications Ltd. exhibited a remarkable market capitalisation of ₹ 56,399.09 crore, but reported negative values in PBIDT (₹ 523.70 crore) and PAT (₹ 651 crore), raising concerns about profitability. On the other hand, PB Fintech Ltd. faced a decline in net sales and other operating income (42.68 per cent), impacting the overall financial health. FirstSource Solutions Ltd. reported positive growth with a significant increase in market capitalisation by ₹ 11,861.06 crore. The company witnessed growth in net sales and other operating income by ₹ 3,069.18 crore, reflecting a 3.67 per cent increase compared to H1FY23. 

Despite facing challenges in the industry, the company managed to improve its profit before interest, depreciation, and tax (PBIDT) by 25.83 per cent. Other players in the industry, such as eClerx Services Ltd., Affle (India) Ltd., and Info Edge (India) Ltd., also showcased positive performances with varying levels of growth in key financial metrics. Overall, the financial performance across sectors demonstrates a mixed bag of successes and challenges, with some companies thriving and others facing headwinds. 

Conclusion 

Despite facing a talent shortage, evolving cyber threats, and data privacy concerns, the IT sector is poised for continued growth thanks to several key factors. Businesses across industries are rapidly adopting digital solutions, driven by the need to stay competitive and adapt to changing market dynamics. Emerging technologies like AI, cloud computing, and others are opening up new possibilities and creating entirely new markets, further fuelling innovation and growth. 

Additionally, increased global internet penetration and a growing focus on sustainability are contributing to the demand for IT services and solutions. While addressing the aforementioned challenges will be crucial for long-term success, the IT sector's dynamism, adaptability, and focus on cutting-edge technologies suggest a bright future for this critical industry. 

Iron steel & Mining

Iron and steel, a vital force propelling industrialisation, holds key importance as both a raw material and intermediary product, serving as a crucial indicator of a nation’s economic development. In India, the steel industry, categorised into major, main and secondary producers, plays a pivotal role in the country’s industrial advancement. As the world’s second-largest producer of crude steel, India recorded an output of 125.32 million metric tonnes (MT) in FY23, accompanied by finished steel production of 121.29 MT. 

Projections suggest a further 4-7 per cent growth, reaching 123-127 MT in FY24. The growth of the Indian steel sector is fuelled by abundant domestic raw materials, such as iron ore, and a cost-effective labour force. This sector significantly contributes to India’s overall manufacturing output. Characterised by modern and state-of-the-art steel mills, the Indian steel industry is dedicated to continuous modernisation, upgrading older plants to achieve higher energy efficiency. Essentially, the Indian steel sector stands as a cornerstone in the nation’s industrial landscape, propelling economic development and modernisation. 

Financial Highlights 

Welspun Corp Ltd., a prominent player within the Welspun Group, has established itself as a global leader in the manufacturing of large-diameter pipes, particularly high-grade line pipes. The company serves as a comprehensive solution provider, catering to diverse line pipe requirements for the transmission of oil, gas and water, both offshore and onshore. Notably, Welspun Corp has exhibited outstanding financial performance in the first half of the fiscal year 2023-24, with a remarkable 147.40 per cent surge in the top-line and a staggering 664.19 per cent increase in the bottom-line, reaching ₹ 442.26 crore. 

In the competitive landscape, major players like JSW Steel Ltd. and Tata Steel Ltd. have reported mixed results in terms of net revenue. JSW Steel experienced a notable growth of 8.68 per cent, while Tata Steel encountered a decline of 6.60 per cent. Steel Authority of India Limited (SAIL), positioned as one of the largest steel-making companies in India and a Maharatna among the central public sector enterprises, holds a market capitalisation of ₹ 37,558.87 crore. 

SAIL has demonstrated significant positive growth, with PBIDT and PBIDTM soaring by 81.19 per cent and 417.63 per cent, respectively. In conclusion, Welspun Corp’s exceptional performance underscores its prowess in the large-diameter pipe manufacturing sector, affirming its global leadership. The contrasting fortunes of major steel players like JSW Steel, Tata Steel and SAIL provide a nuanced perspective on the industry dynamics. As the sector navigates through diverse challenges and opportunities, Welspun Corp remains a standout performer, contributing significantly to the robustness of India’s industrial landscape. 

Outlook 

In the fiscal year 2022-23, India’s steel sector showcased robust performance, achieving a significant milestone with crude steel production touching 125.32 million tonnes (MT) and finished steel production reaching 121.29 MT. The month of July 2023 marked notable figures, with crude steel production standing at 11.52 MT and finished steel production at 10.53 MT. The consumption of finished steel in FY24, until July 2023, stood impressively at 41.15 MT. The per capita steel consumption in FY23 demonstrated the integral role of steel in various applications, reaching 86.7 kg. The sector’s global engagement was evident in the export and import of finished steel in FY23, recorded at 6.7 MT and 6.02 MT, respectively. 

The Indian steel industry aims for remarkable growth, targeting an annual production exceeding 300 million tonnes by 2030-31. This ambitious vision includes plans for 255 million tonnes of crude steel and 230 million tonnes of finished steel production. Envisaging net exports of 24 million tonnes, anticipated consumption is set to reach 206 million tonnes, translating to a per person steel consumption of 160 kg. This highlights the industry’s pivotal role in propelling India’s economic prosperity. 

Contributing around 2 per cent to the GDP, India stands as the world’s second-largest steel producer and is poised to surpass China as the second-largest consumer, affirming its global significance. The steel sector’s trajectory in India holds immense growth potential, propelled by its comparatively low per capita steel consumption and anticipated surges in infrastructure construction, automobile manufacturing and the railways sector. As India navigates this promising path, the steel industry remains at the forefront, steering the nation toward economic vibrancy and global significance. 

Logistics

The logistics industry, a linchpin for various sectors, plays a pivotal role in meeting the surging demand for deliveries and adapting to evolving consumer preferences. Leading logistics firms increasingly leverage data-driven decision-making and supplier benchmarking to ensure success. The warehousing, industrial and logistics (WIL) sectors are crucial contributors to India’s ambitious goal of achieving a USD 5 trillion economy by FY25, witnessing a substantial surge in their market share from 2 per cent in 2020 to 20 per cent in 2021, attributed to the pandemicinduced shift towards essential online shopping. 

The growth trajectory of WIL is propelled by a robust economy, government-led infrastructure initiatives and a favourable business environment. Thriving retail and e-commerce sectors, projected to surpass USD 1.8 trillion by 2030, attract international investments, benefitting from policy frameworks like the National Logistics Policy and digital transformation initiatives. India’s ports sector experiences robust demand and handled 650.52 million tonnes in FY22, with major ports undertaking projects exceeding USD 274.31 million through public-private partnerships in FY22. 

The finance minister’s proposal to double ship recycling capacity by 2024, with an aim to generate 1.5 lakh jobs, has received policy support, including a USD 1,813.16 million allocation in the Union Budget 2023-24, complemented by the Marine Aids to Navigation Bill 2021 aligning practices with global standards. In tandem, third-party logistics and e-commerce players are strategically expanding into Tier II and III cities. Government initiatives, including logistics parks, aim to bolster storage facilities. 

Meanwhile, the National Logistics Policy targets reducing logistics costs as a percentage of GDP to single digits by 2030. The Indian warehousing industry gains momentum driven by heightened demand, technological advancements and strategic expansions by key players. Overall, industry dynamics are shaped by data-centric strategies, government interventions and global economic trends, underscoring the symbiotic relationship between growth sectors and strategic initiatives. 

Financial Highlights 

In H1FY24, the logistics sector witnessed a 5.5 per cent YoY decline in net sales and other operating income. However, the sector demonstrated strong operational efficiency, with a significant 28.1 per cent YoY increase in PBIDT excluding other income and a noteworthy 22.7 per cent YoY growth in PAT, showcasing strategic resilience and effective cost management. These financial indicators suggest the sector’s adaptability to dynamic market conditions. 

Container Corporation of India, one of the major logistics companies in India, is engaged in the business of providing inland transportation of containers by rail while also covering the management of ports, air cargo complexes and cold chains. In H1FY24, the company reported net revenue of ₹ 4,118 crore compared to ₹ 3,980 crore in H1FY23 – a YoY growth of 3.45 per cent. Its profit after tax (PAT) grew 2.56 per cent on YoY basis at ₹ 605 crore from ₹ 590 crore. 

Allcargo Logistics is another leading logistics company engaged in providing integrated logistics solutions. The company reported consolidated revenue of ₹ 6,578 crore in H1FY24 compared to ₹ 10,975 crore in H1FY23, indicating a YoY decline of 40 per cent. Its net profit for H1FY24 stood at ₹ 134 crore with a massive YoY decline of 72 per cent as against ₹ 482 crore in H1FY23. In H1FY24, Adani Ports and Special Economic Zone saw its net sales growing by 30.92 per cent on YoY basis to ₹ 12,894 crore from ₹ 9,849 crore in H1FY23. PAT increased by 43.72 per cent from ₹ 3,910 crore to ₹ 2,721 crore on a YoY basis. 

Outlook 

India’s logistics sector, employing 22 million, is a vital pillar for businesses, valued at USD 250 billion in 2021. Poised for significant growth, it targets USD 380 billion by 2025 with a robust 10-12 per cent YoY growth. Government initiatives aim to trim logistics costs from 13-14 per cent to 10 per cent of the GDP in alignment with the industry norms. In the shipping sector, FY24 envisions steady performance, notably in mid-size tankers and dry bulk segments. The tanker market anticipates growth, while surplus capacity challenges impact the container market. 

Positive dynamics support expected improvements in the dry bulk market. Key Indian shipping companies, representing 45-50 per cent of the total tonnage, are maintaining stable business and financial profiles. India’s warehousing and logistics sector, a key driver of economic growth valued for its dynamism, presents attractive opportunities despite certain challenges. Government infrastructure enhancements and the e-commerce surge are the major contributors to it playing a pivotal role. 

Embracing technology and the government’s digital push provide logistics players’ opportunities to enhance efficiency through data analytics, artificial intelligence and machine learning. Moreover, foreign investment avenues are opening up as global firms seek entry into India’s expanding logistics market, facilitated by the government allowing 100 per cent foreign direct investment in logistics parks and warehouses. In summary, the confluence of economic drivers, technology adoption and foreign investment prospects positions India’s logistics sector for substantial long-term growth, creating a favourable landscape for strategic investments.
 

Media & Entertainment

India’s media and entertainment (ME) industry, a sunrise sector, has been thriving due to fast internet access, rising incomes and increased consumer spending. Unique for its high volumes and surging average revenue per user (ARPU), the industry leads in digital adoption, offering rich data for customer insights. India’s prowess extends to VFX becoming a global content creation hub. Resilient and poised for growth, the ME sector anticipates a robust phase, driven by escalating consumer demand and improved advertising revenue. The FICCI-EY report projects an advertising-to-GDP ratio of 0.4 per cent by 2025, up from 0.38 per cent in 2019. 

The industry is poised to reach ₹ 2.34 trillion (USD 29.2 billion), with a projected CAGR of 10 per cent, reaching ₹ 2.83 trillion (USD 35.4 billion) by 2025. Advertising revenue is anticipated to hit ₹ 394 billion (USD 5.42 billion) by 2024, with traditional media holding 58 per cent share in 2022. The digital industry is set to grow at 29 per cent, reaching ₹ 35,809 crore (USD 4.35 billion) by 2023, contributing 38 per cent to India’s advertising industry. Mobile gaming, online gaming and the music industry are also experiencing substantial growth, reflecting India’s dynamic and thriving media and entertainment landscape. 

The Government of India, signalling a major economic shift, has elevated the foreign direct investment (FDI) limit from 74 per cent to 100 per cent. In tandem with this, plans were unveiled in November 2021 to establish a National Centre of Excellence for AVGC (animation, visual effects, gaming and comics). This strategic move not only opens up avenues for increased international investment but also underscores the government’s commitment to fostering growth in the dynamic sectors of animation, gaming and related industries. The enhanced FDI limit is in tune with India’s broader vision for economic expansion and technological innovation. 

Financial Highlights 

PVR Inox Ltd. witnessed remarkable financial growth in Q2 2023-2024, with a 188.11 per cent YoY surge in revenue, reaching ₹ 2,023.70 crore. The net profit soared by an impressive 333.57 per cent YoY to ₹ 166.30 crore. Notably, the net profit margin also experienced substantial growth, rising by 181.07 per cent YoY to 8.22 per cent. The company’s quarterly performance is equally impressive, with a 52.18 per cent QoQ increase in revenue and a substantial 303.8 per cent QoQ surge in net profits, reflecting robust financial health and dynamic business operations. 

Zee Entertainment Enterprises Ltd. reported robust financials in Q2 2023-2024, with a 22.97 per cent YoY surge in revenue, reaching ₹ 2,509.65 crore. Net profit increased by 8.92 per cent YoY to ₹ 122.96 crore. Despite a – 11.42 per cent YoY dip in net profit margins, the company showed resilience with 25.59 per cent QoQ revenue growth and a substantial 330.18 per cent QoQ surge in net profits. 

Sun TV Network Ltd. reported a robust performance in Q2 2023-2024, with a 26.79 per cent YoY surge in revenue, reaching ₹ 1,160.21 crore. However, the company witnessed a – 21.14 per cent QoQ decline in revenue. Net profit showed a positive trend, increasing by 14.05 per cent YoY to ₹ 464.54 crore, but experienced a – 21.52 per cent QoQ decline. Despite a – 10.05 per cent YoY dip in net profit margins, the QoQ change was a marginal – 0.48 per cent, indicating stability in the company’s profitability. 

Outlook 

The Indian media and entertainment industry is experiencing remarkable growth, surpassing global averages. Fuelled by rising incomes, expanding internet access and a digital push, the sector is poised for sustained expansion. Retail advertising is expected to drive long-term growth, with new players entering the food and beverage sector, a surge in e-commerce popularity and domestic companies exploring opportunities. Anticipated growth in rural regions, combined with India’s embrace of 5G and future plans for 6G, underscores a digital revolution. This digital push, particularly in rural areas, presents advertisers and publishers with substantial opportunities to tap into untapped markets, propelling India’s media and entertainment industry forward. 

Oil & Gas

The oil and gas sector is among the eight core industries in India and plays a major role in influencing decision-making for all the other important sections of the economy. India’s economic growth is closely related to its energy demand and therefore the need for oil and gas is projected to increase, thereby making the sector quite conducive for investment. Global oil markets are gradually recalibrating after three turbulent years in which they were upended first by the corona virus pandemic and then by Russia’s invasion of Ukraine. Further, the Israel-Gaza conflict sowed instability in the Middle East. 

Moreover, an unprecedented reshuffling of global trade flows and two consecutive emergency stock releases by IEA member countries in 2022 allowed industry inventories to rebuild, easing market tensions. While the market could significantly tighten in the coming months as OPEC+ production cuts or tempers the upswing in global oil supplies, the outlook is predicted to improve over the period of 2022-28. Russia’s invasion of Ukraine sparked a surge in oil prices and brought security of supply concerns to the fore, helping accelerate deployment of clean energy technologies, according to a new IEA report. 

Oil-producing countries outside the OPEC+ alliance dominate plans for increasing global supply capacity in the medium term, with an expected rise of 5.1 million barrels per day by 2028 led by the United States, Brazil and Guyana. Saudi Arabia, the United Arab Emirates and Iraq lead the plans for capacity-building within OPEC+, while African and Asian members are set to struggle with continuing declines, and Russian production falls due to sanctions. Gasoline demand will be disproportionately impacted as electric vehicles (EVs) progressively replace vehicles with internal combustion engines (ICE). 

About 80 per cent of the 3 million barrels per day 2022-2028 oil demand growth estimated to be displaced by vehicle electrification will be for gasoline. This means that the fuel is likely to exhibit the earliest and most pronounced peak in demand. Efficiency improvements will occur for all fuels – not only road transport fuels – and will have a larger overall impact on oil demand than EVs. Efficiency gains are expected to reduce the growth in oil demand by roughly 790 kb per day per year over the period 2022-2028 for a total of 4.8 million barrels per day in avoided growth. Total oil demand savings from new EV sales and efficiency improvements over the 2022-2028 period will be 7.8 million barrels per day. 

At the same time, upstream investments in 2023 are expected to reach their highest levels since 2015. The oil 2023 mediumterm market report forecasts that based on current government policies and market trends, global oil demand will rise by 6 per cent between 2022 and 2028 to reach 105.7 million barrels per day supported by robust demand from the petrochemical and aviation sectors. Despite this cumulative increase, annual demand growth is expected to shrivel from 2.4 million barrels per day this year to just 0.4 million barrels per day in 2028, putting a peak on demand in sight. 

Financial Highlights

According to the IEA (India Energy Outlook 2021), primary energy demand is expected to nearly double to 1,123 million tonnes of oil equivalent, as India’s gross domestic product (GDP) is expected to increase to USD 8.6 trillion by 2040. 

India’s crude oil production in FY22 stood at 29.7 MMT. India’s rapid economic growth is leading to greater outputs, which in turn is increasing the demand of oil for production and transportation. 

Crude oil consumption is expected to grow at a CAGR of 5.14 per cent to 500 million tonnes by FY40 from 202.7 million tonnes in FY22. For the first half of FY24 the refineries and oil exploration business showed mixed results and the gas transmission business has shown a decline. Currently, oil has fallen to a five-month low and to cater to the oil demand for FY24, OPEC has agreed to take voluntary supply cuts. 

Outlook 

In terms of barrels, India’s oil consumption is forecast to rise from 4.05 MBPD in FY22 to 7.2 MBPD in 2030 and 9.2 MBPD in 2050. Diesel demand in India is expected to double to 163 MT by 2029-30, with diesel and petrol covering 58 per cent of India’s oil demand by 2045. Natural gas consumption is forecast to increase at a CAGR of 12.2 per cent to 550 MCMPD by 2030 from 174 MCMPD in 2021. India is planning to double its oil refining capacity to 450-500 million tonnes by 2030. 

The demand is not likely to simmer down anytime soon given strong economic growth and rising urbanisation. The energy demand of India is anticipated to grow faster than that of all the major economies globally on the back of continuous robust economic growth. Moreover, the country’s share in global primary energy consumption is projected to increase two-fold by 2035. 

Plastic

ProductsThe Indian plastic industry stands as a cornerstone of the nation’s economy, boasting a presence throughout the country with over 2,000 exporters. Employment opportunities provided by this industry exceed 4 million, distributed across 30,000 processing units with a notable 85-90 per cent representation from small and mediumsized enterprises. India is acknowledged as a key global hub for plastic due to its advantages in low-cost production, affordable labour, accessible raw materials, and their availability. In recent years, the plastic products’ industry has been instrumental in advancing technology. 

This helped foster a spirit of innovation within the country. The plastic industry has also enhanced value across different manufacturing sectors like agriculture and fast-moving consumer goods (FMCG). India’s manufacturing spectrum encompasses a wide array of products, including plastics products, house ware, medical items, and packaging materials, films, pipes, containers, home plastic furniture, etc. India exports various plastic products to more than 200 countries worldwide. 

Financial Highlights 

To analyse the financials of the sector, we compared the performance of the top 21 companies in this sector between H1FY24 and H1FY23. Overall, this sector has shown lacklustre growth across various parameters such as sales, profit before interest, depreciation, and tax (PBIDT), as well as profit after tax (PAT). The aggregate top-line of the sector saw a decline of 6.5 per cent, dropping from ₹ 33,971.02 crore in H1FY23 to ₹ 31,752.55 crore in H1FY24. However, there was a moderate improvement in PBIDT over the past year, which stood at ₹ 3,755.47 crore in H1FY24, marking a 2.6 percent increase from ₹ 3,660.50 crore in H1FY23. The sector’s PAT witnessed a 15.8 per cent decline, falling from ₹ 2,315.98 crore in H1FY23 to ₹ 1,950.25 crore in H1FY24. 

In H1FY24, among the top five companies in the sector based on market capitalisation, namely, Supreme Industries, Astral and Responsive Industries, there was observed sales growth of 9 per cent, 11 per cent and 12.5 per cent, respectively. However, the remaining two companies, namely, Finolex Industries and Prince Pipes and Fittings, experienced a decline in their sales by 3.2 per cent and 2.5 per cent YoY. Out of these five companies, only Supreme Industries, Astral and Finolex Industries demonstrated a positive YoY growth in PAT, while Responsive Industries and Prince Pipes and Fittings reported a decline in their profits. 

Outlook 

The Government of India has set ambitious targets aiming to elevate the plastic industry from its current economic activity level of ₹ 3 lakh crore (USD 37.8 billion) to ₹ 10 lakh crore (USD 126 billion) within the next four to five years. Furthermore, in FY23, India’s plastic exports reached USD 11.96 billion. 

Writing instruments and stationery exports surged by 22.7 per cent and medical items by 18 per cent with a slight 0.5 per cent rise in plastic pipes and fittings compared to the previous year. The primary importers of consumer and house ware products from India are the USA, Germany, Japan, the UK and France. 

The Plastic Export Promotion Council has established an objective to elevate the country’s plastic exports to USD 25 billion by the year 2027. Numerous plastic parks are being set up by the government to enhance the nation’s plastic manufacturing capacities, offering the sector funding of up to 50 per cent of the project cost or a maximum limit of ₹ 40 crore (USD 5 million) per project. Currently, India ranks as the world’s third-largest consumer of plastics, following China and the United States. The global plastic production stands at around 390.7 MT, with India’s share of global plastic use at approximately 6.4 per cent. 

This is anticipated to surge to 160.4 MT, surpassing six-fold by the year 2060. Within the pipes industry, crucial factors driving growth include the government’s emphasis on infrastructure development, the relatively low penetration of piped water in India, rapid expansion of the housing sector, and the increasing irrigation needs in the country’s agriculture sector. The reliance on plastic products in India is progressively growing due to their durability and cost-effectiveness. Furthermore, initiatives like Digital India, Make in India and Skill India are set to boost India’s plastic industry. 

Such initiatives will help reduce dependence on imports and empower local plastic manufacturers. The government has initiated centres of excellence to advance petrochemical technology and research in the sector, fostering innovation for new polymer and plastic applications. Also, around 23 CIPET centres have been approved to boost skill development in chemicals and petrochemicals through collaborations. Given such initiatives and the anticipated increased usage of plastic products in the future, it is prudent to monitor stocks within this sector for potential investment opportunities. 

Power

India’s power sector sits at the heart of the nation’s infrastructure, propelling economic progress and enhancing citizen wellbeing. The government has placed universal access to affordable and sustainable energy at the forefront of its agenda, driving significant advancements in recent years. India’s power generation portfolio boasts a diverse mix of conventional sources like coal, gas and nuclear, alongside a growing presence of renewable options like solar, wind and hydropower. This diversity ensures reliable power supply even as demand experiences rapid growth. 

Standing as a global leader in renewable energy, India secured the fourth position in both wind and solar power capacity in 2023. With an installed capacity exceeding 423 GW, India currently ranks as the world’s third-largest producer and consumer of electricity. Renewable energy contributes significantly to this capacity, accounting for over 41.9 per cent. Solar and wind alone boast impressive installed capacities of 71.14 GW and 43.94 GW, respectively. Fuelled by strong demand and proactive government initiatives, the power sector witnessed remarkable growth in FY23. 

Power generation increased by 8.87 per cent to reach 1,624.15 billion kWh. Recognising the sector’s immense potential, significant investments are pouring in. The National Electricity Plan 2022-32 estimates a total requirement of ₹ 33 lakh crore (USD 400 billion) and 3.78 million skilled professionals by 2032 to meet the rising energy demands. The government remains actively involved in the sector’s growth, implementing policies and initiatives to facilitate its development. Some key examples include the allocation of USD 885 million for the solar power sector in the Union Budget 2022-23, the issuance of sovereign green bonds and the launch of the Green Energy Corridor projects. 

Financial Highlights 

The power sector companies have a market capitalisation of ₹ 1,268,485.31, which is contributed by 26 listed entities. Our financial analysis of the power stocks shows that NTPC has the highest market capitalisation and revenue in H1FY24. 

Interestingly, Tata Power is the second-highest revenue contributor among all the 26 listed entities in the stock market. Tata Power has a market capitalisation to sales ratio of 1.78 times. 

The top five companies in terms of market capitalisation account for about 59 per cent and 70 per cent in terms of revenue. Among the power sector stocks, Inox Wind Energy Limited saw the highest YoY growth in revenue with a whopping 124.77 per cent increase. Adani Green Energy Limited also posted a 36.48 per cent YoY growth in revenue. Based on PAT, Tata Power saw a 764 per cent growth and GVK Power and Infrastructure Limited posted growth of 276.06 per cent. Tata Power Company Limited is expected to make a capital investment of ₹ 60,000 crore by 2027, with 45 per cent deployment in the renewable energy sector. The company is also expected to double its revenue, EBITDA, and PAT by FY27. SJVN Limited has set a target of 12,000 MW by 2026 and a Shared Vision of 50,000 MW installed capacity by 2040. 

Outlook 

The government’s ambitious goal of achieving 500 GW renewable energy capacity by 2030 further underscores its commitment to this sector. Significant investments are pouring in, with estimations ranging from USD 128-135 billion from 2019-23. The National Infrastructure Pipeline has allocated a whopping 24 per cent of its USD 1.4 trillion budget to the energy sector, demonstrating the government’s prioritisation of infrastructure development. Companies like SJVN, Adani Group and NTPC are further boosting the sector by investing heavily in renewable energy. 

Government initiatives like DDUGJY, UDAY and IPDS are accelerating rural electrification, ensuring equitable access to power across the country. Additionally, the allocation of USD 885 million for the solar power sector in Union Budget 2023-24 reflects the government’s continued support for renewable energy development. Looking ahead, the power sector is envisioned to attract investments exceeding USD 400 billion and will require 3.78 million skilled professionals by 2032, according to the National Electricity Plan 2022-32. 

Achieving this ambitious target will require addressing certain challenges. This includes grid integration of renewable energy, ensuring reliable and affordable power supply and developing a skilled workforce. Despite the challenges, India’s power sector stands on the precipice of a bright and sustainable future. By leveraging its immense potential and implementing effective strategies, India can emerge as a global leader in renewable energy, improve living standards through increased electrification and generate new jobs and economic growth. 

Real Estate

The Indian real estate sector is experiencing an exciting period of growth, driven by exceptional presales across various segments and significant inventory expansion. It is the second-largest employer after agriculture. One of the primary drivers for this surge is the rapid urbanisation of India. As millions migrate to cities seeking better opportunities and lifestyles, the need for residential housing rises dramatically. This influx is further stimulated by the development of smart cities and improved infrastructure, making urban life more attractive. Another crucial factor is the rising disposable income of individuals. As their financial stability increases, so do their aspirations for better living spaces. This translates into a growing demand for spacious apartments, modern amenities, and luxury housing. 

Furthermore, supportive government initiatives like Housing for All and Smart Cities Mission are providing a vital push to the industry. By promoting affordable housing options, facilitating infrastructure development and undertaking urban renewal projects, these initiatives are fostering a positive environment for real estate growth. The current market is characterised by remarkable presales figures, highlighting robust demand across various segments. Leading developers like Sobha Limited, Prestige Estate Projects, Macrotech Developers and Phoenix Mills are exceeding expectations with record presales with YoY growth of 48 per cent, 102 per cent, 12 per cent and 9 per cent, respectively. 

This showcases a strong upward trajectory for the industry. This momentum is expected to continue in the coming quarters, fuelled by new project launches and a positive market sentiment. Furthermore, the market is also witnessing a shift towards premium projects. This trend is evident in the recent GDV additions by developers and the higher presales growth experienced in the luxury real estate segment of markets like NCR and Bengaluru. This shift reflects the rising demand for high-end properties amongst affluent individuals seeking exclusive and luxurious living experiences. 

Financial Highlights 

The top 10 listed players in the realty space have a combined market capitalisation of over 4.71 lakh crore. For the half year ended 2023, the top 10 listed companies generated net sales of ₹ 22,858.61 crore, up by 10.62 per cent compared to ₹ 20,664.70 crore in H1FY23. Among the listed peers, Godrej Properties Ltd., The Phoenix Mills Ltd. and Oberoi Realty Ltd. clocked robust sales growth. The PBIDT excluding other income in H1FY24 stood at ₹ 5,459.22 crore with a YoY growth of 12.22 per cent from ₹ 4,864.95 crore in H1FY23. The average PBIDT margins improved 2,150 bps and stood at 21.50 per cent. The net profit of the realty space was at ₹ 5,001.87 crore in H1FY24, up by 78.29 per cent YoY from ₹ 2,805.49 crore in H1FY23. 

Outlook 

Listed real estate players are actively expanding their market share by venturing into new and untapped markets beyond their traditional strongholds. This strategic move allows them to diversify their portfolio, access new customer segments and enhance their overall resilience in the competitive landscape. The past 18 months have seen a significant surge in inventory levels, as developers race to meet the growing demand for diverse real estate offerings. This remarkable growth indicates the confidence developers have in the market’s future potential and their commitment to providing a wider range of options for buyers. 

Private equity investments are projected to reach a staggering USD 54.3 billion by 2047, an annual growth rate 9.5 per cent, showcasing strong investor confidence in the industry’s long-term prospects. Additionally, factors like urbanisation, rising disposable incomes and the government’s focus on infrastructure development will continue to fuel demand and create new avenues for growth. The growing popularity of co-working spaces, student housing and senior living facilities will further contribute to the industry’s diversification and expand its reach to cater to evolving needs. While potential challenges like rising mortgage rates and oversupply in certain markets exist, the overall outlook for the Indian real estate sector remains positive. 

By carefully analysing market dynamics and adapting their strategies accordingly, developers can mitigate these risks and continue to contribute to the sector’s thriving journey. In conclusion, the Indian real estate market is experiencing a remarkable period of growth driven by strong demand, robust presales and a surge in inventory. While challenges exist, the long-term outlook remains robust on account of favourable demographics, government initiatives and the rising demand for diverse real estate offerings. This dynamic and promising sector holds immense potential for investors and homebuyers alike, offering opportunities for prosperity and growth. 

Retail 

The Indian retail industry has become exceptionally dynamic and fast-paced with the influx of numerous new entrants. Globally, India holds the position of the world’s fifth-largest destination in the retail sector. With the retail sector accounting for more than 10 per cent of the GDP and employing over 8 per cent of the workforce (35+ million), it is anticipated to generate 25 million new jobs by the year 2030. The e-commerce market is also expected to touch USD 350 billion in GMV by 2030. 

India’s retail sector has witnessed remarkable growth, not only in major cities and metros but also in smaller cities. The surge in organised retail development can be attributed to factors such as robust economic growth, evolving demographic profiles, rising disposable incomes, urbanisation, and shifting consumer tastes and preferences. India’s substantial growth potential, in contrast to global counterparts, positions it as an exceptionally attractive investment destination. 

Financial Highlights 

The total market capitalisation of the industry is ₹ 6,37,887.23 crore. Companies like Aditya Vision Ltd., Trent Ltd. and Zomato Ltd. have shown a robust jump in their revenue on year-on-year basis during H1FY24. The top companies delivering highest PBIDT excluding other income growth were Trent, FSN E-Commerce Ventures and Zomato, which surged by 50.51 per cent, 43.76 per cent and 84.65 per cent, respectively. 

If we look at the bottom-line as well, Electronics Mart India, Trent and Zomato have reported substantial increment in their net profit which stands at ₹ 97.63 crore, ₹ 342.77 crore and ₹ 38.00 crore, respectively, during the first half of FY24 compared to the same period in the last financial year. The increase in profit after tax (PAT) also has been more than 50 per cent in each of the top performing companies. 

Outlook 

In 2022, the Indian retail industry witnessed a significant rebound, experiencing robust growth across all its segments. Projections indicate that it is set to achieve a milestone of USD 2 trillion by 2032. This remarkable expansion is attributed to socio-demographic and economic factors, including urbanisation, income growth, increase in nuclear families and a transition from the unorganised to the organised segment. By the year 2035, more than 43 per cent of the nation’s population is projected to reside in urban areas. This continual trend toward urbanisation signifies a preference shift from rural living to the accessibility and convenience offered by cities. 

The increasing affordability, coupled with higher levels of urbanisation, is poised to fundamentally change the consumption patterns over the next decade. This transition is expected to have a positive influence on the consumption of lifestyle and fashion products. Following China and the US, India ranks third across the globe in terms of e-retail shoppers. New-age logistics providers are projected to fulfil 2.5 billion direct-to-consumer (D2C) shipments by 2030. The penetration of online used car transactions is anticipated to witness a nine-fold increase in the coming decade. 

According to recent industry reports, the e-commerce industry experienced an impressive 36.8 per cent year-on-year growth in order volumes. The consistent inclination of consumers toward online shopping throughout the year signifies the established maturity of e-commerce brands in India. The country is witnessing a steady expansion of e-commerce, offering customers an ever-growing array of products at competitive prices. E-commerce is poised to be a transformative force in the retail industry, and this trend is anticipated to persist in the future. Retailers should capitalise on digital retail channels, such as e-commerce, allowing them to reduce real estate expenses while reaching a broader customer base in Tier II and III cities. 

The projected value of the online retail market in India is expected to reach USD 350 billion by 2030. Deloitte India and the Shopping Centre Association of India (SCAI) predict that India’s retail industry will reach USD 4.5 trillion by the conclusion of the decade. Presently, the Indian retail market stands at approximately USD 1.3 trillion. The report highlights the crucial role that malls and shopping centres play in the organised brick-and-mortar retail sector. This segment is anticipated to experience substantial growth, with a projected compound annual growth rate (CAGR) of 17 per cent from 2022 to 2028, exceeding the overall growth of the retail market. 

Telecom 

The Indian telecom landscape has undergone a dramatic transformation in recent years. The industry has witnessed significant consolidation, leaving three formidable private players and a single governmentowned entity competing for a large user base. Despite a modest increase in subscriber numbers, the sector remains a vital force propelling India towards a USD 1 trillion digital economy. As of March 2023, India boasted over 1.17 billion telecom users, translating to a tele-density of 84.51 per cent. However, this statistic masks a significant urban-rural divide. While urban areas enjoyed a tele-density exceeding 133 per cent, rural areas lagged behind at 57.71 per cent, highlighting the need for further infrastructure development to bridge this gap. 

Despite the challenges, the industry’s contribution to the national economy is undeniable. The first quarter of FY24 saw a 1.75 per cent sequential growth in the industry’s adjusted gross revenue (AGR), fuelled by the rapid uptake of 5G services, particularly during events like the Indian Premier League (IPL). Among the major players, Bharti Airtel emerged as the frontrunner, experiencing a significant 4.08 per cent increase in its AGR. Jio and VI also witnessed growth, albeit at a slower pace. The overall industry AGR stood at a staggering ₹ 65,624 crore in the first quarter, showcasing the industry’s robust performance. 

Financial Highlights 

There are 13 companies listed in the telecom space with a combined market capitalisation of over 8.33 lakh crore. For the half year ended 2023, the top 10 listed companies generated net sales of ₹ 3,31,418.764 crore, up by 6.87 per cent compared to ₹ 2,51,566.82 crore in H1FY23. Among the listed peers, Railtel Corporation of India Ltd., ITI Ltd., Bharti Airtel Ltd. and Tata Communications Ltd. clocked robust sales growth. 

The PBIDT excluding other income in H1FY24 stood at ₹ 57,454.28 crore with a YoY growth of 13.32 per cent from ₹ 50,700.40 crore in H1FY23. Improving by 155 bps, the average PBIDT margins stood at 23.34 per cent. The net profit of the telecom space excluding net loss of Vodafone Idea Ltd. (₹ 14,892.50 crore) came at ₹ 5,158.66 crore in H1FY24, down by 23.95 per cent YoY from ₹ 6,783.44 crore in H1FY23. 

Outlook 

The arrival of 5G has been a game-changer for the sector. As of November 2023, 5G penetration was already expected to reach 11 per cent, exceeding initial expectations. This rapid adoption is projected to translate into over 130 million 5G subscriptions in 2023, a number expected to reach 860 million by 2029, representing 68 per cent of the total mobile subscriptions. Despite the 5G boom, 4G remains the dominant subscription type, fuelling the region’s data growth. However, as subscribers migrate to 5G, 4G subscriptions are expected to decline significantly over time. 

Jio and Bharti Airtel are leading the charge in 5G deployment, with their networks nearing completion. Vodafone Idea, still lagging behind, is yet to launch its 5G services. India already boasts the highest average data traffic per smart phone globally, a statistic projected to grow at an impressive CAGR of 16 per cent between 2023 and 2029. The strong growth is driven by factors such as increased smart phone penetration and growing demand for data-intensive applications, highlighting the sector’s crucial role in facilitating India’s digital future. 

By 2029, smart phone subscriptions are expected to account for 93 per cent of the total mobile subscriptions, signifying the complete dominance of smart phones in the Indian market. Globally, 5G penetration is mirroring India’s trajectory. These subscriptions are expected to reach 1.6 billion by the end of 2023, exceeding initial forecasts. This global growth is attributed to the resilience of the industry despite economic challenges and geopolitical unrest in certain regions. 

In fact, global 5G subscriptions are expected to grow a staggering 330 per cent between 2023 and 2029, reaching over 5 billion subscriptions, highlighting the transformative power of this next-generation technology. The Indian telecom sector stands at the precipice of a new era. With the 5G revolution gaining momentum and data consumption soaring, the industry is poised to play an even more crucial role in driving India’s digital transformation and solidifying its position as a global economic powerhouse. The sector’s future is bright, driven by innovation, robust infrastructure development and a rapidly evolving digital ecosystem. 

Textiles

The Indian textile industry is a vibrant and dynamic sector, playing a significant role in the country's economy. It is the second-largest employer after agriculture. The Indian textile industry is booming, propelled by a confluence of factors. Rising domestic demand, fuelled by an expanding middle class with greater disposable income is driving up consumption of apparel, home textiles, and technical textiles. Government initiatives like the Textiles India 2030 mission are providing vital infrastructure, technology integration, and skill development support. 

Global trade, bolstered by recent agreements like India-UAE CEPA and the FTA with Australia, is further expanding export opportunities. On the technological front, the industry is eagerly embracing automation, artificial intelligence, and robotics, leading to improved efficiency, productivity, and product quality. While thriving, the Indian textile industry faces challenges like fierce competition, infrastructure limitations, skill gaps, and complex regulations. Yet, government initiatives and technological advancements offer hope for overcoming these hurdles and solidifying the industry's global leadership position. 

Embracing sustainable practices, harnessing the power of e-commerce, and leveraging advancements like automation, AI, and blockchain will equip the industry to compete effectively in the global marketplace. Additionally, catering to the growing demand for personalised products and experiences will be crucial to maintaining customer loyalty and driving future growth. 

Financial Highlights 

The textile sector provides direct employment to over 45 million people and contributes around 2 per cent to the country's GDP. The industry is also a major contributor to exports, earning over USD 43 billion in fiscal year 2022-23. The Indian textile industry is a ship sailing on a prosperous tide, propelled by rising domestic demand, export opportunities, and government support. This positive momentum is expected to continue, with projections indicating a CAGR of 10-12 per cent over the next five years, reaching a staggering market size of USD 223 billion by 2028. 

The overall market capitalisation of the information technology sector stood at ₹ 2.84 lakh crore as of December 2023, of which 14.8 per cent is contributed by Page Industries Ltd. and 12 per cent by Vedanta Fashions Ltd. In the textile industry for H1FY24, companies experienced varying performances. Page Industries reported a decrease of 8.90 per cent in net sales, accompanied by a decline of 11.25 per cent in PBIDT, and a significant drop of 16.40 per cent in PAT. On the other hand, Cantabil Retail India saw a positive trend with a 25.92 per cent increase in net sales and a notable growth of 30.79 per cent in PAT. 

K.P.R. Mill Ltd. exhibited an 11.30 per cent growth in net sales but faced an 8.08 per cent decline in PBIDT. Welspun Living Ltd. demonstrated robust performance with a remarkable increase of 138.52 per cent in PAT and a substantial rise of 1,128.59 per cent in PBIDT. In contrast, Himatsingka Seide Ltd. faced challenges, reporting a decline of 88.62 per cent in PAT. TCNS Clothing Co. Ltd experienced significant negative changes across various parameters, including a drastic decrease of 277.47 per cent in PBIDT and a substantial decline of 1,821.15 per cent in PAT. Swan Energy Ltd. showcased exceptional growth with a staggering 7,109.95 per cent increase in net sales and a substantial rise of 2,268.21 per cent in PBIDT. The industry as a whole witnessed diverse performance, reflecting the dynamic nature of the textile sector. 

Conclusion 

The Indian textile industry stands at a pivotal juncture, poised for significant growth yet facing critical challenges. To emerge as a global leader, the industry must deftly navigate this dynamic landscape, addressing obstacles while seizing emerging opportunities. The future beckons with a promise of both triumphs and tribulations. The industry must brace itself for the storms ahead, while simultaneously harnessing the sunshine of emerging trends. By capitalising on these opportunities, the industry can solidify its position as a global textile powerhouse. 

However, the path forward is not without its perils. Inadequate infrastructure, a skilled workforce gap, and a complex regulatory landscape pose formidable challenges. To reach its full potential, the industry must effectively navigate these treacherous currents. By addressing these challenges head-on and embracing the opportunities that lie ahead, the Indian textile industry can secure its future as a global leader, shaping the textile landscape for years to come. 

Click here to download list of top 1000 companies economic review FY 2023-24

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