Top 1000 Companies Financial Review For FY23

Methodology 

Presented herewith is the vital financial data of the top 1,000 companies by market capitalisation. This is in response to requests from our valued reader-investors for financial data and keeping our promise, we have laid out the relevant data that covers 24 sectors in an easily readable format. We are sure that the financial data by sectors along with the detailed view on sector dynamics will be an interesting read for you! We have sourced our financial data from Ace Equity. Please note that our list of the top 1,000 only includes companies that have reported their FY23 numbers as of June 5, 2023. We have also taken into consideration companies having year ending as of June, September and December, and clubbed them into fiscal year 2023 to maintain consistency. 

Compiled by - Ashwin Urkude, Bhavya Rathod, Gyanesh Patodiya, Kamal Mansuriya, Kiran Shroff, Mandar Wagh, Prajwal Parale Patil, Praveenkumar Yadav, Siddharth Mane, Vaishnavi Chauhan, Anikit Kumar Gupta, Mohd Faisal, Rakesh Jaiswal and Rishabh Tyagi  [EasyDNNnews:PaidContentStart]

 

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Agriculture

India is a prominent player in the global agriculture sector, and agriculture is the primary source of income for 55 per cent of the Indian population. India boasts the world’s largest herd of cattle (buffaloes), the largest area planted for wheat, rice and cotton, and is the world’s largest producer of milk, pulses and spices. It ranks second in the production of fruits and vegetables, tea, farmed fish, cotton, sugarcane, wheat and rice. India’s agriculture sector has the world’s second-largest agricultural land, employing approximately half of the country’s population. 

With monsoon season approaching, the market anticipates that unpredictable weather patterns caused by El Nino effects in various farm producer countries will affect the production and keep the prices of agricultural commodities such as sugar high. Despite the fact that India has the world’s second-largest sugar output, local prices have stayed steady due to government backing and price limits. While in the short to medium term we would see a cascade effect on next season’s exports. 

El Nino, a climatic event characterised by warmer-than-average SSTs (sea surface temperatures) in the central and eastern Pacific Ocean near the equator, tends to occur every 2-7 years on average. The climate impact of El Nino extends well beyond the Pacific Ocean. El Nino could lead to new records for temperatures, particularly in areas that already experience above-average temperatures during El Nino. According to the India Meteorological Department, the effects of El Nino on the country’s monsoon may be experienced in August when it is the peak time for rains.
 

Financials

Out of the 19 publicly listed companies, 10 companies belong to the sugar industry while the rest constitutes tea and coffee, rubber products, solvent extraction and other agricultural products. In FY23, the top 10 companies by market capitalisation generated net sales of ₹ 85,720.51 crore, up by 30.53 per cent YoY as against ₹ 65,670.01 crore in FY22. Dhampur Sugar Mills Ltd., Triveni Engineering and Industries Ltd., CCL Products (India) Ltd. and Shree Renuka Sugars Ltd. posted excellent sales growth during the fiscal year 2023. The operating profit stood at ₹ 10,482.87 crore compared to ₹ 9,202.10 crore, up by 13.92 per cent YoY. However, operating margins contracted by 178 basis points to stand at 12.23 per cent on account of high input cost and unanticipated weather patterns. Net profit for FY23 stood at ₹ 5,281.322 crore from ₹ 5,013.541 crore, indicating YoY growth of 5.34 per cent.
 

Outlook

India’s agriculture sector has been witnessing robust growth with an average annual growth rate of 4.6 per cent over the last six years. This has enabled agriculture and allied activities sector to contribute significantly towards the country’s overall growth, development and food security, as per the Economic Survey 2022-23 tabled in the parliament by the Union Minister of Finance and Corporate Affairs Nirmala Sitharaman. Further, in recent years the country has emerged as a net exporter of agricultural products with exports in 2021-22 touching a record USD 50.2 billion. 

The government has been increasing the MSP (minimum support price) for all 22 Kharif, Rabi and other commercial crops with a margin of at least 50 per cent over the all-India weighted average cost of production since the agricultural year 2018-19. Relatively higher MSP was given to pulses and oilseeds in order to keep pace with the changing dietary patterns and achieve the goal of self-sufficiency. The agriculture industry in India reached ₹ 8,055,000 crore in 2022 and is expected to reach ₹ 15,899,100 crore by 2028, with a CAGR of 12.2 per cent between 2023 and 2028. 

Some of the major factors propelling the Indian agriculture market include changing dietary patterns, rapid population growth, changing weather patterns, increase in the frequency of natural disasters and favourable technological advancements such as precision farming, data analytics, drones and automation. The government has set a target of ₹ 18.5 lakh crore in agricultural credit flow in 2022-23. The government has consistently increased this target every year and it has also been able to continuously surpass the target set every year over the past several years. 

In 2021-22, it was about 13 per cent more than the target of ₹ 16.5 lakh crores. This achievement was made possible because the government had designed multitude of initiatives to ensure hassle-free credit availability to farmers at competitive interest rates. This includes the Kisan Credit Card (KCC) Scheme which provides credit at any time and Modified Interest Subvention Scheme which provides short-term agricultural loan up to ₹ 3 lakhs at subsidised interest rate.
 

Automobile & Ancillaries

The automobile sector, also known as the automotive industry, encompasses the design, development, production, and sale of vehicles. It is a vital and dynamic sector that plays a significant role in the global economy and daily life. Automobiles have become an integral part of transportation, providing mobility for individuals and goods across the world. In recent years, the Indian automobile market has been experiencing significant growth. The Indian passenger car market was worth USD 32.70 billion, and it is expected to reach USD 54.84 billion by 2027, with a compound annual growth rate (CAGR) of 9 per cent. 

The electric vehicle (EV) market in India is also on the rise, projected to reach ₹ 50,000 crore (USD 7.09 billion) by 2025. This growth can be attributed to factors such as rising middleclass incomes and a growing youth population, leading to increased demand for vehicles. Foreign direct investment (FDI) has played a crucial role in the development of the automobile sector in India. The sector attracted equity inflows from FDI totalling USD 33.77 billion, accounting for 5.48 per cent of the total equity FDI during that period.
 

Financials

Several major players in the automobile industry have made significant investment plans for expansion. MG Motor India plans to invest USD 100 million in capacity expansion and expects to achieve 70 per cent growth by 2023. Mahindra and Mahindra, another prominent automobile manufacturer, will invest ₹ 10,000 crore (USD 1.2 billion) in a Pune plant for the production of electric vehicles. In terms of production, a total of 2,191,090 passenger vehicles, three-wheeled, two-wheeled and quadricycles were produced in India during FY23. 

The Government of India has implemented various policies and initiatives to promote the growth of the automobile sector. The National Policy on Biofuels was updated in 2018, aiming to blend 20 per cent ethanol into gasoline and 5 per cent biodiesel into diesel by 2025-2026. Additionally, the government has introduced schemes such as the Automotive Mission Plan 2026, scrappage policy and production-linked incentive (PLI) scheme to encourage new investments and increase local vehicle production. 

Investments in the automobile sector in India are expected to continue growing. By 2023, the Indian government anticipates that investments from within India and abroad will total between USD 8 and USD 10 billion. Looking ahead, India has the potential to lead the way in shared mobility, which would pave the way for the adoption of electric and self-driving cars. The top companies in the automobile sector have shown robust growth. Maruti Suzuki’s net sales grew by 27 per cent, Tata Motors’ net sales went up by 23 per cent year-on-year (YoY) and Ashok Leyland exhibited a growth of 58 per cent YoY. The overall growth of the top companies in the sector has been 32 per cent YoY. 

The operating profit of these companies has shown an overall growth of 52 per cent and the profit after tax (PAT) has increased by 19 per cent. The electric vehicle industry is expected to have a significant impact on job creation in India. It is estimated that the sector will create 5 crore (50 million) jobs by 2030. In terms of specific developments, there have been notable announcements and agreements in the industry. Mahindra and Mahindra announced an investment of ₹ 10,000 crore (USD 1.2 billion) for an EV manufacturing plant in Pune in December 2022. In February 2022, a memorandum of understanding (MoU) was signed between Ather Energy, an electric two-wheeler company, and Electric Supply Companies (ESCOMs) of Karnataka to set up 1,000 fast charging stations across the state.
 

Outlook

In July 2022, the Gujarat government announced a semiconductor policy, including the establishment of Dholera Semicon City and offering incentives for investments in this sector. To support the development of advanced technologies in the automobile industry, the Central Government of India approved a production-linked incentive (PLI) scheme in May 2021. The scheme, with a budget of ₹ 18,100 crore (USD 2.33 billion), focuses on the manufacturing of advanced chemistry cells (ACC). 

In March 2022, four firms viz. Reliance New Energy Solar Limited, Ola Electric Mobility Private Limited, Hyundai Global Motors Company Limited and Rajesh Exports Limited, were selected to receive incentives under this scheme. Overall, the automobile sector in India is experiencing significant growth and attracting investments from domestic and international players. With the implementation of supportive policies, the rise of electric vehicles and advancements in technology, India is poised to become a global leader in the two-wheeler and four-wheeler markets by 2022. The sector’s expansion is expected to create job opportunities and contribute to the country’s economy.

 

Banking

The banking sector in India has been a crucial component of the country’s economic growth, providing financial services and support to individuals, businesses and the government. Despite recent volatility in the global banking system, the Indian banking sector has demonstrated remarkable resilience. Additionally, we are currently observing credit growth and improvements in asset quality. According to a report by PwC, the banking sector in India is projected to achieve a compound annual growth rate of 10 per cent from 2022 to 2027. Given the resilience of the Indian banking system and the significant growth potential in the future, bank deposits stood at ₹ 173.70 trillion (USD 2.12 trillion) as of November 4, 2022. 

The report also states that the sector is expected to reach a value of USD 3.7 trillion by 2027. The Indian banking sector is expected to be the world's third largest domestic banking sector by 2050. Over the past one year, the S&P BSE Bankex has returned around 30 per cent. India has a diversified financial sector undergoing rapid expansion, both in terms of the strong growth of existing financial services firms and new entities entering the market. The sector comprises commercial banks, insurance companies, non-banking financial companies, cooperatives, pension funds, mutual funds, and other smaller financial entities. In 2022, the total assets in the public and private banking sectors were USD 1,594.51 billion and USD 925.05 billion, respectively. The Indian banking system consists of 12 public sector banks, 22 private sector banks, 46 foreign banks, 56 regional rural banks, 1,485 urban cooperative banks and 96,000 rural cooperative banks in addition to cooperative credit institutions. According to the Reserve Bank of India (RBI), India’s banking sector is sufficiently capitalised and well-regulated. The financial and economic conditions in the country are far superior to those in any other country in the world. Credit, market and liquidity risk studies suggest that Indian banks are generally resilient and have withstood the global downturn well.
 

Financials

The banking sector is exposed to hundreds of factors that have a material impact on its functioning. Bank credit grew by 15 per cent year-on-year in the fiscal year ended March 2023 due to the low base of the previous year and higher demand for funds as economic activity picked up. Bank advances rose to ₹ 136.75 lakh crore as of March 24, 2023 from ₹ 118.91 lakh crore as of March 25, 2022, according to provisional data released by the Reserve Bank of India. The financial results for Q4FY24 and the year-end have shown amazing results, demonstrating the financial stability of banks in India. With interest rates on deposits rising back to back by the RBI, the share of term deposits with an original maturity period of one year to less than three years has soared to 64.2 percent as of end-March 2023 from 50.4 percent a year ago. 

SBI has shown robust results over the past years and has become India’s first bank to surpass ₹ 50,000 crore in annual net profit. HDFC Bank remains at the top with a market capitalisation of ₹ 815,161 crore. Most banks have significantly increased their net sales, operating profit and PAT, indicating a good performance of the sector. India’s financial regulators are implementing a national financial information registry to improve credit flow, financial inclusion and stability. The Union Budget 2023 aims to assess existing legislation, reduce costs and simplify compliance. Revisions to different statutory clauses aim to improve governance, investor protection and promote financial inclusion.
 

Outlook

In recent years, India has also focused on increasing the reach of its banking sector through various schemes. Some schemes, coupled with major banking sector reforms like digital payments, neo-banking, the rise of Indian NBFCs and financial technology have significantly enhanced India’s financial inclusion and helped fuel the credit cycle in the country. India’s Unified Payments Interface (UPI) has also revolutionised real-time payments and has strived to increase its global reach in recent years. 

In recent years India has experienced a rise in fintech and microfinancing. The Indian fintech market has attracted USD 29 billion in funding over 2,084 deals over January 2017 - July 2022, accounting for 14 per cent of global funding and ranking second in terms of deal volume. By 2025, India's fintech market is expected to reach ₹ 6.2 trillion or USD 83.48 billion. 

The advancement in technology has brought mobile and internet banking services to the fore. The banking sector is laying greater emphasis on providing improved services to their clients and upgrading their technology infrastructure to enhance customer’s overall experience as well as give banks a competitive edge. The RBI in it’s released 'Payments Vision 2025' document, says it aims for a threefold increase in digital payments, an increase in debit card usage, and less cash in circulation. 

The Indian banking sector is one of the largest and most dynamic in the world. It is also one of the most regulated with a strong focus on financial stability and consumer protection. Enhanced spending on infrastructure, speedy implementation of projects and continuation of reforms are expected to provide further impetus to growth in the banking sector. The sector has been growing rapidly in recent years and is expected to continue growing in the coming years.
 

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) 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.
 

Financials

Bharat Electronics and Hindustan Aeronautics, 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. CG Power and Industrial Solutions, on the other hand, has experienced fluctuations in financial performance. Although its net sales have increased, the company has faced challenges in maintaining profitability, as reflected by declining operating profits and net profits. 

Thermax has shown steady growth in net sales and profitability, with an impressive increase in operating profits and net profits. The company has successfully maintained consistent profit margins, demonstrating efficiency in its operations. Bharat Heavy Electricals has experienced a decline in net sales and profitability with negative net profits in FY23. RHI Magnesita India, Graphite India, Suzlon Energy and GE T&D India have also faced varying degrees of financial challenges, including fluctuating profitability and negative net profits in some cases.
 

Outlook

In the fourth quarter of FY23, the capital goods sector is expected to perform well due to strong order books, ongoing project execution and increased demand from both domestic and international markets. Revenue, EBITDA and adjusted PAT for the sector are projected to grow around 13.6 per cent, 15.2 per cent and 11.6 per cent YoY, respectively, excluding BHEL. 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 with Siemens, ABB, BEL and Larsen and Toubro . Strong order inflows are anticipated driven by significant wins in various sectors and an uptick in private investment.
 

Chemicals
 

India’s chemical industry makes a significant economic contribution to the country. Some of the major categories of the chemical industry include bulk chemicals, agrochemicals, petrochemicals, polymers, fertilisers and specialty chemicals. India benefits from economies of scale thanks to its close proximity to the Middle East, the major source of raw materials for petrochemicals. After the United States, Japan and China, India is the world’s fourth-largest producer of agrochemicals and the world’s third-largest consumer of polymers. Except for pharmaceutical products, India ranks eleventh in chemical exports. 

It supplies around 15-16 per cent of the world’s total dyestuff and dye intermediate production, making it a major global dye supplier. The Indian chemical industry had a market value of USD 178 billion in 2019 and is anticipated to reach USD 300 billion by 2025 with a CAGR of more than 9 per cent. The chemical industry, which the government recognises as being vital to the growth of the Indian economy, is allowed 100 per cent foreign direct investments (FDI) except some hazardous chemicals. The industry is predicted to receive investments worth ₹ 8 lakh crore by 2025. It is much diversified, spanning more than 80,000 commercial products and employs more than 2 million people.
 

Financials

We assessed around 100 companies in segments such as pesticides and agrochemicals, fertilisers, paints, dyes and pigments to build a financial picture of the chemical industry. Asian Paints, Pidilite Industries and Berger Paints India lead the industry in terms of market capitalisation. The highest net sales and net profit were reported for 2023 by UPL , although the company had difficulty growing its net profit year-on-year. Asian Paints, that came in second place, was able to record robust top-line and bottom-line growths. Indo Borax and Chemicals and Sadhana Nitro Chem had the lowest net sales for the year while Kiri Industries and Dhunseri Ventures reported the most losses. 

National Fertilisers achieved the highest percentage increase of any company in net sales, soaring 86 per cent over the last year while National Peroxide stunned investors by achieving outstanding net profit growth of 682 per cent. The equity markets disappointed in 2023 and investor optimism is shattered but one sector that remained strong amid market uncertainties was undoubtedly chemicals thanks to robust performances by chemical companies. Only six companies failed to generate profits for the year while more than 40 per cent witnessed double-digit growth in net profit year-on-year.
 

Outlook

Due to the US, Europe and China trade war, there are various opportunities for the Indian chemical industry. Also, China has lately started to lose its pricing advantage as a result of growing government enforcement of stricter environmental laws regarding the environmental pollution from Chinese chemical companies. ‘China Plus One’ is a strategy through which companies avoid investing only in China and instead diversify their operations to other countries. India has the technical expertise and potential to provide the global markets with manufacturing facilities that are cost-competitive and thus it might enhance its market share by taking advantage of China’s declining position. 

The Indian government also has been making continuous efforts to boost the chemical industry. The production linked incentives (PLI) scheme was introduced by the government in 2021 with a budgetary commitment of ₹ 18,100 crore over five years. PLI-triggered projects with an allocated budget of ₹ 1,629 crore have been introduced to further develop bulk drug parks. In addition to initiatives, the Department of Chemicals and Petrochemicals has secured ₹ 173 crore from the government as part of the Union Budget 2023-24. The government has also introduced single window clearance for central and state approvals in order to make business easier. Rising disposable income, urbanisation and the massive demand for items in rural areas are some of the key growth factors for the industry.
 

Construction 

The construction industry holds the third position among the 14 major sectors in India, considering its direct, indirect, and induced effects on the overall economy. The real estate market is projected to grow from USD 12,000 million (USD 1.72 billion) in 2019 to ₹ 65,000 crore (USD 9.30 billion) by 2040. By 2030, the real estate sector in India is expected to reach a market size of USD 1 trillion, a significant increase from USD 200 billion in 2021. It is estimated that the real estate sector will contribute 13 per cent to the country's GDP by 2025. This growth is expected to be driven by a compound annual growth rate (CAGR) of 19.5 per cent between 2017 and 2028. 

There are five major segments in the real estate sector that are in continuous demand: residential, commercial, retail, hospitality, and special economic zones (SEZs). According to Savills India, the demand for data centre real estate is predicted to rise by 15 to 18 million square feet by 2025. Additionally, the organised retail real estate stock is expected to grow by 28 per cent to 82 million square feet by 2023. The government has allowed foreign direct investment (FDI) of up to 100 per cent for townships and settlement development projects, which will encourage infrastructure development on the outskirts of cities. 

In the Union Budget 2023-2024, a commitment of ₹ 79,000 crore (USD 9.64 billion) has been announced for the PM Awas Yojana, representing a 66 per cent increase compared to the previous year. This increased investment is expected to drive the demand for real estate purchases. The Smart City project, aiming to build 100 smart cities, presents a prime opportunity for real estate companies. The recent decision by the Reserve Bank of India (RBI) to maintain the benchmark interest rate at 4 per cent has given a significant boost to the real estate sector.
 

Financials

On average, the companies have achieved a sales growth of 14.74 per cent and a profit growth of around 18.63 per cent. Ultratech Cement Limited and Shree Cement Limited have demonstrated strong sales growth of 17.59 per cent and 19.15 per cent respectively, coupled with solid profit growth of 22.86 per cent and 28.34 per cent. Dalmia Bharat Limited and JK Cement Limited have also reported respectable sales and profit growth figures, with Dalmia Bharat achieving 18.12 per cent sales growth and 22.91 per cent profit growth, and JK Cement achieving 14.42 per cent sales growth and 20.34 per cent profit growth. Ultratech Cement Limited has shown consistent growth in revenue and net profit margins over the years, indicating strong financial performance. Shree Cement Limited has also demonstrated steady growth, with increasing revenue and profit margins. 

Kajaria Ceramics Limited and Century Plyboards (India) Limited operate in different segments of the construction materials industry. Kajaria Ceramics focuses on ceramics, marble, granite, and sanitaryware, while Century Plyboards specializes in wood and wood products. Both companies have shown consistent revenue growth, but Kajaria Ceramics has maintained higher profit margins compared to Century Plyboards. Greenpanel Industries Limited has emerged as the leader with an impressive growth rate of 24.45 per cent, followed by Asahi India Glass Limited at 20.25 per cent. Meanwhile, the India Cements Limited has experienced a slight decline in sales growth (-1.84 per cent), indicating a challenging period for the company. 

The cement industry is expected to see 9-10 per cent YoY demand growth in 4QFY23, driven by strong growth in January-February but offset by weakness in March. All-India prices remained flat quarter-on-quarter (QoQ) in 4QFY23, while costs are anticipated to decline sequentially by 3.3 per cent QoQ. Cement producers are expected to benefit from lower energy costs, resulting from reduced coal and petcoke prices. Despite demand fluctuations, a growth rate of 10 per cent YoY is expected for FY2024. Overall, the construction material industry is diverse, with different companies operating in specific segments. The top players, such as Ultratech Cement Limited and Shree Cement Limited, have demonstrated strong financial performance, while smaller players have shown varying degrees of success.
 

Outlook

The low home loan interest rates are expected to drive housing demand and increase sales by 35-40 per cent during the festive season. To meet the urban population's growth, there is currently a shortage of 10 million housing units in urban areas, and an additional 25 million units of affordable housing will be required by 2030. In terms of infrastructure development, 15 new national highway projects worth ₹ 13,585 crore have been opened in Patna and Hajipur, Bihar. Furthermore, under the Union Budget 2023-24, the capital investment outlay for infrastructure is being increased by 33 per cent to ₹ 10 lakh crore (USD 122 billion), which will account for 3.3 per cent of GDP and nearly three times the outlay in 2019-20.

 

Consumer Durables 

The Indian consumer durables market, divided into urban and rural markets, attracts marketers worldwide. It comprises a large middle class, an affluent class and an economically disadvantaged class. The sector includes consumer electrical goods, kitchen appliances, lighting devices and white goods. The market is shifting from the unorganised to organised segment with 30 per cent of the market still unorganised. This presents an opportunity for Indian players to increase their market share. Artificial intelligence and manufacturing automation are crucial trends as consumer awareness grows. 

Industry 4.0 will drive investments in research and development, technology infrastructure and manufacturing processes to improve production efficiency in consumer durables. India’s growth is driven by a favourable population composition and increasing disposable income, making it a key market for global corporations. The Indian appliances and consumer electronics industry grew by 11.1 per cent YoY in 2021, reaching ₹ 1.48 lakh crore (USD 21.18 billion) by 2025. Electronics hardware production in the country reached USD 63.39 billion in 2021. India’s television production reached USD 4.24 billion in FY21, with an active DTH subscriber base of 67.04 million. 

The refrigerator, washing machines and air-conditioner markets are estimated to be around USD 3.82 billion, USD 8.43 billion, and USD 3.84 billion, respectively. The airconditioner market is expected to reach 165 lakh units by 2025, while the refrigerator market is expected to reach 275 lakh units. India’s smart phone market revenue crossed USD 38 billion in 2021 with Xiaomi leading with 24 per cent shipment share. As CEO Tim Cook of Apple India has started to push retail in the country, the sales of Apple India hit a new high of almost USD 6 billion in 2023. This highlights the importance of the iPhone maker Apple in the Indian market. 

In 2023, Apple’s revenue in India witnessed a growth of about 50 per cent from USD 4.1 billion a year ago. According to FICCI, India’s TV production is expected to reach USD 10.22 billion by FY26 at a CAGR of 20 per cent. The headset market revenue in India is projected to reach USD 77 million by 2027 at a CAGR of 4.7 per cent, driven by rising adoption of wireless headsets among consumers. The dishwasher market in India is expected to surpass USD 90 million by 2025-26, driven by rising demand from metro cities such as Mumbai, Hyderabad, Delhi and Bangalore. 

The National Policy on Electronics is targeting the production of one billion mobile handsets valued at USD 190 billion by 2025, out of which 600 million handsets valued at USD 100 billion are likely to be exported. The Indian appliance and consumer electronics (ACE) market is expected to increase at 9 per cent CAGR to reach ₹ 3.15 trillion (USD 48.37 billion) in 2022. The government anticipates that the Indian electronics manufacturing sector will reach USD 300 billion (₹  22.5 lakh crore) by 2024–25. 

According to India Cellular and Electronics Association (ICEA), India has the potential to achieve a value of USD 100 billion in the manufacturing of laptops and tablets by 2025. The Indian mobile phone market is predicted to generate ₹ 2.4 trillion (USD 29.38 billion) in revenue by FY26. The Indian appliance and consumer electronics (ACE) market is expected to increase at 9 per cent CAGR to reach ₹ 3.15 trillion (USD 48.37 billion) in 2022. Demand growth is likely to accelerate with rising disposable income. 

The Indian government has encouraged consumer durable brands to make in India, aiming for self-reliance and a preference for home-grown products. The National Policy on Electronics 2019 aims to produce one billion mobile handsets worth USD 190 billion by 2025, with 600 million handsets valued at USD 100 billion likely to be exported. The government has allowed 100 per cent FDI under the automatic route in electronics systems design and manufacturing with plans to increase FDI limits in multibrand retail to 51 per cent. Companies such as Whirlpool Ltd, Crompton Greaves Ltd, TTK Prestige Ltd and Hindware Home Innovation clocked triple-digit PAT growth and double-digit revenue and operating profit growth.
 

Outlook

Finance Minister Nirmala Sitharaman’s Union Budget 2023 measures support domestic capacity creation and infrastructure growth, generating employment across industries. The increased capital expenditure outlay aligns with initiatives like ‘Make in India’ and self-reliance, paving the way for recovery. Consumer durables and appliances companies anticipate growth across sectors, accelerating the economy’s recovery. Urban infrastructure development in Tier II and III cities will increase demand for infrastructure projects, consumer appliances and HVAC systems. All this together certainly bodes well for the consumer durables sector in India.

 

Crude 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. Benchmark crude oil prices are back below pre-war levels and refined product cracks have now come off all-time highs after rising supplies coincided with a marked slowdown in oil demand growth in advanced economies. 

Moreover, an unprecedented reshuffling of global trade flows and two consecutive emergency stock releases by IEA (International Energy Agency) 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 (International Energy Agency) 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 mb/d 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 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/d per year over the 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 to their highest levels since 2015. The Oil 2023 medium-term 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.
 

Financials

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. 

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. In particular, the use of oil for transport fuels is set to go into decline after 2026 with the expansion of electric vehicles, growth of bio fuels and improvement in fuel economy that will reduce consumption.
 

Outlook

The government has adopted several policies to fulfil the increasing demand. It has allowed 100 per cent foreign direct investment (FDI) in many segments of the sector, including natural gas, petroleum products and refineries, among others. The FDI limit for public sector refining projects has been raised to 49 per cent without any disinvestment or dilution of domestic equity in the existing PSUs. 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.
 

Electricals

The Indian electrical industry can be divided into two sectors: the wire and cable industry and the electronic component industry. In the fiscal year 2023, the Indian wire and cable industry is projected to have grown by a low double-digit percentage to reach a size of ₹ 680-730 billion, accounting for 40-45 per cent of the overall Indian electrical industry. Some major sectors such as power, railways, infrastructure, oil and gas, telecom, real estate, renewables, defence, automobiles, etc. are the primary drivers of demand for this industry. 

On the other hand, the electronics manufacturing industry is experiencing rapid growth and is among the fastest growing sectors globally. India is actively promoting and developing its electronics manufacturing cluster and currently holds a 3 per cent share of global electronics production. The role of electronic manufacturing will be crucial in India’s goal of achieving a USD 10 trillion economy. The domestic production of electronic goods has witnessed substantial growth, rising from ₹ 3,17,331 crore in 2016-17 to ₹ 6,40,810 crore in 2021-22 with a CAGR of 15 per cent. It is projected that India’s electronics production will reach USD 300 billion by 2026.
 

Financials

For this report, we have focused on the top nine companies with the highest market capitalisation to evaluate the financial performance of the electrical industry in FY23. The combined market capitalisation of these companies amounts to approximately ₹ 69,000 crore. The electrical and electronics industry witnessed a significant growth in net sales with a year-on-year increase of nearly 19 per cent. Furthermore, the operating profit showed YoY growth of 25 per cent while the profit after tax (PAT) experienced an impressive surge of 52 per cent. 

Analysing the individual companies’ performance in FY23, Olectra Greentech Limited achieved the highest top-line growth of 84 per cent. This was accompanied by an 82 per cent increase in net profitability compared to FY22. Regarding bottom-line growth, Sterlite Technologies Limited reported the most substantial net profit growth of 689 per cent on YoY basis, reaching ₹ 227 crore. The company’s net sales also rose by 20 per cent from FY22, reaching ₹ 5,754.26 crore.
 

Outlook

The Indian cable and wire industry is poised for significant growth, driven by several key factors. Firstly, the government’s focus on infrastructure development as a catalyst for long-term economic growth has led to increased budget allocations for sectors such as railways, roadways, highways, defence and housing. Secondly, the residential real estate market is experiencing an upward movement, supported by factors like low interest rates, supportive government policies and the need for larger homes due to the work-from-home culture. 

Thirdly, the railways market is undergoing transformation with substantial investments in improving connectivity. Initiatives like the introduction of semi-high-speed and bullet trains, along with the goal of 100 per cent electrification, will drive demand for wire and cable products. 

To bolster India’s position as a global hub for electronic production, the Indian government has introduced three distinct programmes aimed at supporting manufacturers in the electronics industry. The electronics industry contributes approximately 2.5 per cent to India’s GDP, making it a key focus area for the government. It is expected that by 2025 India’s consumer electronics and appliances sector will surpass China and become the world’s fifth-largest market.
 

Financial Services

India has a diversified financial sector undergoing rapid expansion both in terms of strong growth of existing financial services firms and new entities entering the market. The organisations facilitate capital flow, offer funding to businesses and individuals, manage risks, and facilitate financial transactions. The health and performance of the financial sector are inextricably tied to broader economic situations, regulatory frameworks and technology breakthroughs. 

Understanding the top actors in this sector is critical for analysing the financial sector’s dynamics and trends. The Government of India has introduced several reforms to liberalise, regulate and enhance this industry. In fact, the government and Reserve Bank of India (RBI) have taken various measures to facilitate easy access to finance for micro, small and medium enterprises (MSMEs). 

India’s financial services sector benefits from diverse digital channels, expanding accessibility. For instance, digital gold investment options have gained popularity, enabling convenient diversification through online platforms and mobile apps. The Union Budget 2022-23 reveals plans for India’s central bank digital currency (CBDC), the digital rupee, showcasing a commitment to modernise financial systems and enhance transactions, inclusion and secure digital payments nationwide.
 

Financials

Based on their annual statements, let’s discuss the financials of the finance sector. The total net sales for FY23 decreased by 24.70 per cent to ₹ 4,90,338.26 crore compared to ₹ 6,51,133.57 crore in FY22. Additionally, the total operating profit for FY23 increased by 18.70 per cent to ₹ 3,78,737.35 crore compared to ₹ 3,19,062.53 crore in FY22. The net profit increased from ₹ 96,618.37 crore in FY22 to ₹ 1,27,699.76 crore in FY23, representing a substantial increase of 32.69 per cent. The total market capitalisation of the finance sector is more than ₹ 18 lakh crore as of June 2023. These positive financial results indicate the sector’s strong performance and growth during the mentioned period. 

Crest Ventures Ltd. and JSW Holdings Ltd. emerged as the top-performing companies in net sales, while GFL Ltd. and Balmer Lawrie Investments Ltd. faced losses in FY23 compared to FY22. In terms of operating profit, Niyogin Fintech Ltd. and Ujjivan Financial Services Ltd. excelled, while Religare Enterprises Ltd. and Crest Ventures Ltd. experienced setbacks. IDFC Ltd. and Crest Ventures Ltd. were the top performers in net profit, whereas Ujjivan Financial Services Ltd. and GFL Ltd. faced losses when comparing FY23 to FY22. 

In January 2023, the mutual fund industry in India managed assets under management (AUM) totalling ₹ 39.62 lakh crore. The systematic investment plan (SIP) attracted inflows of ₹ 1.50 lakh crore. Equity mutual funds witnessed a net inflow of ₹ 22.16 lakh crore by December 2021. In December, net inflows amounted to ₹ 7,303.39 crore, an improvement from November’s 21-month low of ₹ 2,258.35 crore. The rapid expansion of mobile and internet services in India has created a favourable environment for over 2,100 fintech companies, positioning the country to become one of the largest digital markets. 

Additionally, in FY23, 40 initial public offerings (IPOs) raised approximately ₹ 54,337 crore. The number of companies listed on the National Stock Exchange (NSE) increased from 135 in 1995 to 2,113 by December 2022. Furthermore, according to Goldman Sachs, investors are showing increasing interest in India’s stock market, leading to predictions that it will surpass the UK and reach over USD 5 trillion by 2024. This growth trajectory positions India’s stock market to become the fifth-largest globally.
 

Overview

The finance sector’s future lies in embracing digital transformation, particularly in the cloud sector, along with prioritising industry-specific considerations, adopting a data-driven approach, enhancing user experience, incorporating ESG practices and implementing embedded finance solutions. These trends are poised to shape and redefine the finance industry, driving innovation and enabling financial institutions to better meet the evolving needs and expectations of their customers. 

The future of artificial intelligence (AI) in India holds significant promise across various sectors and the finance sector is one of them. It enables personalised customer interactions, improves efficiency and ensures round-the-clock availability. By leveraging various AI tools, businesses can understand customer preferences better and tailor their offerings accordingly, leading to increased customer loyalty, higher conversion rates and an enhanced brand reputation.
 

FMCG 
(FAST-MOVING CONSUMER GOODS)

The fast-moving consumer goods (FMCG) sector has long been recognised for its ability to adapt and thrive in challenging times. In 2023, the FMCG industry continues to demonstrate its resilience, leveraging innovation, sustainability and digital transformation to navigate the ever-changing dynamics of the market. The Indian FMCG market is the fourth-largest sector in the country and is one of the most attractive in the world since consumption in India is growing at an unprecedented rate, thus offering plenty of investing opportunities. The sector is expected to increase at a CAGR of 14.9 per cent to reach USD 220 billion by 2025 from USD 110 billion in 2020. 

This growth rate can be attributed to drivers such as the growing youth segment and working women population, rising incomes, increasing purchasing power, higher brand consciousness, changing consumer preference, growing urbanisation, increase in the number of upper-middle-class and rising internet penetration. FMCG companies are struggling with the impact of high inflation for some months now. India’s retail inflation surged to a 17-month high of 6.95 per cent in March 2022 on the back of rallying food and oil prices. The Indian food processing market size reached USD 307.2 trillion in 2022 and is expected to reach USD 547.3 trillion by 2028, exhibiting a growth rate (CAGR) of 9.5 per cent during 2023-2028. 

Digital advertising will grow at 14.75 per cent CAGR to reach ₹ 35,809 crore (USD 4.3 billion) by 2023 with the FMCG industry being the biggest contributor at 42 per cent share of the total digital spends. The Union Budget 2023-24 has allocated USD 976 million for PLI schemes that aim to reduce import costs, improve the cost competitiveness of domestically produced goods, increase domestic capacity and promote exports. The Union Budget 2023-24 focuses on reviving rural demand by boosting disposable income, allocation to farms and higher fund allocation on rural infrastructure, connectivity and mobility to create long-term jobs. 

Financials

The FMCG market reached USD 56.8 billion in December 2022 with a CAGR of 27.9 per cent. Urban India contributed 65 per cent to annual sales while rural India contributed over 35 per cent. Rural demand recovery is expected in FY24 with good harvest and government spending. The sector experienced 8.5 per cent revenue growth and 2.5 per cent volume growth in the January-June 2022 period due to inflationary pressures. The budget has allocated USD 976 million for PLI schemes that aims to reduce import costs, improve the cost competitiveness of domestically produced goods, increase domestic capacity and promote exports. 

Currently, India accounts for a share of just 0.68 per cent of the global FMCG market. This share is expected to increase significantly over the next five years mainly due to macro economic factors such as improving demographics, rising disposable income, expansion of organised retail in Tier II and III cities in India, changing consumer preferences, etc. Major FMCG markets include the USA, China, European Union, Japan, etc. Globally, the FMCG sector is expected to grow at a CAGR of 4.4 per cent, which when compared to India is a lot slower. Many foreign FMCG multinationals have established themselves in India.
 

Outlook

The Indian FMCG industry is characterised by a complex distribution network and intense competition, requiring firms to constantly innovate their supply chain. Micro economics plays a crucial role in the sector’s structure. The low-margin business relies on product volume and companies focus on product availability through multiple layers. However, price inflation has negatively impacted the performance of FMCG companies in the first half of FY22, with OPM margins contracting by 185 bps. While raw material inflation is expected to continue, price hikes and cost-saving measures can reduce stress on margins. Urban demand is recovering and October saw strong double-digit growth, largely driven by festive demand.
 

Healthcare

The Indian healthcare industry contributes significantly to the country's economy and the global healthcare market. Rising income levels, an ageing population, increased health awareness, and a shift in attitude towards preventive healthcare are all predicted to drive up demand for healthcare services in the future. Furthermore, the low cost of medical services has increased medical tourism in the country, attracting people from all over the world. Due to the low cost of clinical research in India, it has emerged as a hub for R&D operations for foreign businesses. 

As of 2021, the Indian healthcare sector employs 4.7 million people, making it one of the country's largest employers. Between 2017 and 2022 in India, the sector added 2.7 million new jobs, or more than 5,00,000 new jobs each year. The Indian healthcare sector is predicted to triple, increasing at a 22 per cent CAGR between 2016 and 2023 to reach USD 372 billion, up from USD 110 billion in 2016. 

The country has a large pool of well-trained medical professionals. The number of allopathic doctors with recognized medical qualifications (under the I.M.C Act) registered with state medical councils/national medical councils increased to 1.3 million up till November 2021.
 

Financials

The healthcare sector is further divided into three sub-sectors: hospital and healthcare services, pharmaceuticals and drugs, and medical equipment/supplies/accessories. We considered a total of 77 companies for this research. 

Elder Pharmaceuticals Ltd dominated the hospital and healthcare services sector in net profit growth in FY23 compared to FY22, with an 1124 per cent increase. With a market capitalization of ₹ 446.78 crore, the firm is in the Pharmaceuticals & Drugs Sub-sector. Unfortunately, Unichem Laboratories Ltd finished worst in peer comparison. 

In terms of business efficiency, Krishna Institute of Medical Sciences Ltd emerged as a champion with net sales growth of approximately 33 per cent. With a market capitalization of ₹ 11043.46 crore, the company operates in the Hospital & Healthcare Services Department. Surprisingly, Apollo Hospitals Enterprise Ltd, a huge leader in the Hospital and Healthcare Services sector, has a market capitalization of ₹ 64943.68 crore. In FY23, net sales increased by only 13 per cent over FY22. 

In the Medical Equipment/Supplies/Accessories sub-sector, Poly Medicure Ltd has a market capitalization of ₹ 9099.03 crore. The company recorded a 19 per cent rise in operating profit over the previous year.
 

Outlook

Everyone's attention was drawn to the need for basic medical facilities across the country as a result of COVID. It increased the importance of the healthcare industry and prompted the government to pay greater attention to it. Given the industry's enormous potential, the Indian government is working hard to strengthen it. The Ministry of Health and Family Welfare has been given ₹ 89,155 crore in the Union Budget 2023-24, a 3.43 per cent increase above ₹ 86,200.65 crore in 2021-22. Additionally, The recently announced PM-ABHIM has been awarded ₹ 5,156 crore to expand India's health infrastructure and improve the country's basic, secondary, and tertiary care services. 

The demand growth, cost advantages, and policy assistance have all played a role in attracting FDI. Earlier the FDI inflows into the medicines and pharmaceuticals sector were USD 19.90 billion between April 2000 and June 2022. 

Insurance and healthcare go hand in hand. An increasing middle class, combined with an increase in the prevalence of new diseases, is driving up demand for health insurance coverage. With rising demand for inexpensive and high-quality healthcare, health insurance penetration is expected to grow in the future years. 

The government is aggressively striving to prevent corporations from claiming patents on such remedies, while the traditional medical profession is constructing a digital repository of traditional knowledge. A growing number of private equity firms are exhibiting an interest in India's traditional healthcare sector. The Indian Ayurvedic sector is estimated to reach USD 9 billion by the end of 2023.
 

Hospitality 

The hospitality industry in India has shown steady growth and has the potential for further expansion. With its rich culture and diverse attractions, India attracts a large number of tourists from around the world, including those seeking spiritual tourism. The country has seen significant progress in its travel and tourism competitiveness ranking and has been gaining popularity among domestic travellers, driven by a growing middle-class and increasing disposable incomes. Innovations like Airbnb and Oyo Rooms have transformed the hospitality landscape by offering affordable stays in prime locations with flexible check-in options. The hospitality and tourism sector contributes significantly to India’s GDP, accounting for 7.5 per cent of the economy. 

The country ranks well in terms of ease of doing business and is actively developing cruise tourism hubs in ports such as Chennai, Goa, Kochi, Mangalore and Mumbai. However, the corona virus pandemic led to a decline in foreign tourist arrivals in 2020. To support the tourism industry, the government has modified the Market Development Assistance Scheme to provide financial support and enhance promotional activities, including online promotions. Overall, the Indian hospitality industry is poised for growth, with efforts to attract both domestic and international tourists and provide support to industry stakeholders.
 

Financials

In total there are about 16 companies in the hospitality sector but here are some of the major players: 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 FY23, sales of the company grew by 105 per cent, operating profit grew by 1076 per cent and net profit decreased by 480 per cent as compared to FY22. Ease My Trip offers a wide range of travel products and services, including airline tickets, hotels, holiday packages, rail tickets, bus tickets, taxis, and more. In FY23 the company reported a growth in sales by 91 per cent and operating profit surged by 30 per cent while net profit increased by 27 per cent as compared to the previous year FY22. 

India Tourism Development Corporation (ITDC) is a government undertaking. It operates hotels, restaurants and provides tourism services, including consultancy and event management. In FY23, the company reported 60 per cent surge in sales, 609 per cent increase in operating profit while net profit surged substantially by 784 per cent as compared to FY22. Taj GVK Hotels and Resorts is a joint venture between GVK Group and Indian Hotels Company Limited and specialises in owning, operating and managing hotels, palaces and resorts under the renowned brand name of ‘TAJ’. In FY23, the company reported sales growth of 69 per cent while operating profit grew by 179 per cent and net profit grew by 706 per cent as compared to the previous year.
 

Outlook

The hotel and tourism industry in India has received USD 16.61 billion in cumulative FDI equity inflow, constituting 2.69 per cent of the total FDI. The Carlson Group plans to add 30 hotels by 2023. The Ministry of Tourism allocates funds for infrastructure development and has sanctioned USD 76.35 million for the coastal circuit theme. Domestic tourism expenditure is expected to rise, and niche offerings like medical tourism and ecotourism will drive demand. By 2029, India’s tourism sector is projected to reach USD 488 billion, contributing 9.2 per cent to the economy. The Union Budget 2023-24 has allocated USD 290.4 million to the Ministry of Tourism and includes initiatives for tourist destinations and pilgrimage sites. The Swadesh Darshan Scheme' aims to develop 50 tourist destinations to enhance the overall tourism experience while the PRASHAD Scheme has received an allocation of USD 30.25 million for the holistic development of selected pilgrimage destinations in the country. 

Furthermore, staycation, a trend where people seek relaxation in luxurious hotels, is on the rise. Hotel chains like Marriott, IHG, and Oberoi are introducing staycation offers with curated experiences. India's travel and tourism industry shows immense growth potential, and the expansion of the e-Visa scheme is expected to double tourist inflow. A joint study by Assocham and Yes Bank predicts a 2.5 per cent expansion in the industry, fueled by increased budgetary allocation and affordable healthcare. Tourism not only drives economic growth but also provides diverse employment opportunities, promotes environmental preservation, cultural heritage, and fosters international peace. Indian tourism and hospitality aim to earn USD 50.9 billion in visitor exports by 2028, compared to USD 28.9 billion in 2018.
 

Information Technology


 

In India, the information technology (IT) industry consists of information technology services and business process outsourcing. The revenue of the IT and BPM industries has been accounted around USD 245 billion in fiscal year 2023. In 2023, the IT industry’s domestic revenue is expected to touch USD 51 billion with revenue from exports to be around USD 194 billion. As of March 2023, the IT-BPM sector employed 5.4 million people. In the fiscal year 2021-22, IT units registered with the state-run Software Technology Parks of India (STPI) and Special Economic Zones exported software worth ₹ 11.59 lakh crore. 

The current year 2023 has begun with cautious optimism, with global growth forecast at 2.9 per cent. Even as the global economic climate remains uncertain, volatility and business resilience will coexist, defining the ‘no normal’ world into which we are venturing. Globally, enterprises are likely to face headwinds, such as demand contraction in some markets, and this uncertainty may cause decision-making to be delayed. According to Gartner’s most recent forecast, global IT spending will be USD 4.6 trillion during 2023, up 5.1 per cent from 2022. 

The demand for IT is expected to be very high this year as businesses push forward with digital business initiatives in response to economic turmoil. Economic headwinds appear to be building for businesses in general, and for the technology industry in particular. However, there are numerous regulatory incentives that could stimulate innovation and growth in 2023 and beyond. Technology companies must rededicate their efforts to improving supply operations, modernising infrastructure and capitalising on growth opportunities in order to survive and thrive.
 

Financials

The global information technology market increased by 8.2 per cent CAGR from USD 8,179.48 billion in 2022 to USD 8,852.41 billion in 2023. The Russia-Ukraine war, at least in the short term, hampered global economic recovery from the pandemic. The conflict between these two countries has resulted in economic sanctions against a number of countries, a rise in commodity prices and supply chain disruptions, resulting in inflation across goods and services and affecting many markets around the world. The information technology market is expected to grow at a 7.9 per cent CAGR to USD 11,995.97 billion by 2027.
 

Outlook

India, which currently holds the prestigious G20 Presidency, has risen from the tenth-largest economy 10 years ago to the fifth-largest today. For the third year in a row, India has been the fastest growing major economy, and it is poised for further expansion, fuelled in part by a robust and diverse technology ecosystem. In the current year 2023, India’s technology industry revenue, including hardware, is expected to exceed USD 245 billion (8.4 per cent year-on-year growth), an increase of USD 19 billion over the previous year. Exports are expected to grow by 9.4 per cent in reported currency terms and 11.4 per cent in constant currency terms, totalling USD 194 billion. The domestic technology sector is expected to reach USD 51 billion this year, up 4.9 per cent on a YoY basis. 

Government policies and regulations can have a significant impact on the growth of the IT sector. Policies that encourage investment in technology infrastructure, research and development and digital initiatives can help to foster IT sector growth. Furthermore, data privacy, cyber security and intellectual property rights regulations can shape the industry landscape and influence market dynamics. By 2025, India’s IT and business services market is expected to be worth USD 19.93 billion. Because of the increasing demand for talent, the top Indian IT companies such as TCS, Wipro and Infosys are expected to offer thousands of job opportunities in the coming time. 

The digital transformation of businesses and organisations will drive growth in the IT sector in the coming years. Increased investments in cloud computing, cybersecurity, artificial intelligence (AI), and data analytics are expected to keep this trend going in 2023. Cloud computing service adoption is expected to accelerate further in 2023. Cloud computing service adoption is expected to accelerate further in 2023. The rate of technological advancement and innovation will have a significant impact on the IT industry. Artificial intelligence, machine learning, cloud computing, Internet of Things (IoT), 5G, and blockchain advancements can create new opportunities and drive industry growth.
 

Infrastructure

India's infrastructure sector has emerged as a key driver of economic growth and development. With a focus on enhancing connectivity, promoting sustainable development, and attracting foreign investment, the government has implemented various policies and initiatives to transform the country's infrastructure landscape. This report provides an overview of the infrastructure sector in India, highlighting key projects, government policies, and investment opportunities. 

In the Union Budget, a massive allocation of ₹ 10 lakh crore (USD 130.57 billion) was made to enhance the infrastructure sector, including investments in roads, railways, urban development, and telecommunications. Additionally, the National Infrastructure Pipeline (NIP) was expanded to include 9,335 projects, further boosting the sector's growth. India has witnessed extensive road and highway development initiatives. 

These projects include the construction of elevated structures, flyovers, and the development of new highways, resulting in improved connectivity and facilitating economic growth in different regions. The Indian Railways has embarked on an ambitious plan to modernise its infrastructure. Initiatives such as the eastern and western dedicated freight corridors, station redevelopment, and induction of modern rakes through public-private partnerships (PPPs) have been undertaken. 

India's civil aviation sector is experiencing rapid growth, aiming to have 190-200 functioning airports by 2040. The government's Vision 2040 report highlights the development of multiple international airports in major cities and the expansion of regional air connectivity. In the residential sector, has shown signs of an uptick, reflecting the positive sentiment in the market.
 

Financials

These partnerships not only bring in capital but also contribute to technology transfer, skill development, and knowledge sharing. Larsen & Toubro Limited, being the largest company, has shown consistent growth over the years, with increasing revenues and profits. GMR Airports Infrastructure Limited has also demonstrated positive growth, though its profitability has been fluctuating. IRB Infrastructure Developers Limited has witnessed steady growth in revenue and profitability, maintaining a healthy margin. GR Infraprojects Limited has shown a significant increase in revenue and profits, indicating a successful performance. KEC International Limited has experienced growth in revenue but a decline in profitability. 

Among the other companies, NCC Limited has displayed a substantial increase in revenue and profits while H G Infra Engineering Limited and PNC Infratech Limited have shown consistent revenue and profit growth. Some companies like Sterling and Wilson Renewable Energy Limited have experienced negative growth, primarily due to losses in certain periods. It is important to note that Jyoti Structures Limited and Punj Lloyd Limited have faced significant losses. Overall, the infrastructure sector has witnessed a mix of performances. 

Outlook

India's infrastructure sector is a vital component of the country's economic growth and development. The government's commitment to investment, policy reforms, and public-private partnerships has paved the way for the development of world-class facilities in transportation, telecommunications, energy, and urban infrastructure. With a focus on sustainability and resilience, India aims to enhance connectivity, bridge regional disparities, and provide a conducive environment for businesses to thrive. The sector's future looks promising, as India continues to attract both domestic and international investments, creating a robust infrastructure ecosystem that supports the country's economic aspirations.
 

Metal & Mining

Minerals are crucial for the growth of the mining industry, as they provide raw materials for essential industries. India's vast resources, including metallic and nonmetallic minerals, provide a foundation for the industry's expansion. Growth is driven by infrastructure development, automotive production, power and cement industries, and demand for iron and steel in residential and commercial building sectors. The iron and steel industry is one of the oldest and most important industries in India. During 2014 and 2016, India was the largest producer of raw steel. In 2019, India became the world’s largest producer of sponge iron and the second-largest steel producer in the world after China. India is also the third-largest finished steel consumer in the world after China and the USA.
 

Financials

India’s coal production reached a new milestone of 698 million tonnes (MT) during FY23 (April-January 2023), a 16 per cent yoy growth, driven by a 15.2 per cent yoy increase in production by Coal India Limited (CIL). The world production of Aluminium during October-December 2021 was about 16.62 million tonnes against world consumption of 16.56 million tonnes. 

In FY22, India produced 133.596 MT of crude steel and 120.01 MT of finished steel, while in April-November 2022 it produced 81.96 MT and 78.09 MT, respectively. The exports and imports of finished steel stood at 13.49 MT and 4.67 MT, respectively. In FY22, India’s exports rose by 25.1 per cent YoY compared with 2021. In FY21, India exported 9.49 MT of finished steel. From FY23 until January 2023, the exports of finished steel stood at 5.33 MT while the imports stood at 5 MT. 

Steel production is expected to surpass 300 million tonnes by 2030-2031 with crude steel production reaching 255 million tonnes and finished steel production reaching 230 million tonnes. The production linked incentive (PLI) scheme for speciality steel was approved by the Union Cabinet. The scheme is anticipated to attract ₹ 400 billion (USD 5.37 billion) in investment and increase speciality steel capacity by 25 million tonnes (MT) from 18 MT in FY21 to 42 MT in FY27.
 

Outlook

In FY23 (until September 2022), the combined index of eight core industries stood at 142.8 driven by the production of coal, refinery products, fertilizers, steel, electricity and cement industries. The government plans to monetize assets worth ₹ 28,727 crore (USD 3.68 billion) in the mining sector over 2022-25. Import duty on Anthracite/Pulverized Coal Injection (PCI) coal, Coke and Semi-coke and Ferro-Nickel were reduced to zero. 

The Union Budget 2023-24 has allocated to the Ministry of Steel ₹ 75,000 crore for 100 critical transport infrastructure projects, including ₹ 15,000 crore from private sources. These projects aim to provide last and first-mile connectivity in sectors like ports, coal and steel. The steel industry is capital-intensive, requiring between ₹ 25 billion to ₹ 30 billion for a 1 MTPA capacity plant. Steel has low barriers to product differentiation, but some companies like Tata Steel enjoy premiums due to quality and brand value. 

Steel companies sell steel directly to users or through their distribution networks, with some exporting. India’s steel industry is a major focus area due to its dependence on various sectors. With 2 per cent of the nation’s GDP, India is the world’s second-largest steel producer and is poised to overtake China as the second-largest steel consumer. The per capita steel consumption has increased from 57.6 kg to 74.1 kg in the last five years and the government aims to increase rural steel consumption from 19.6 kg per capita to 38 kg per capita by 2030-31.
 

Logistics

The Government of India has undertaken various measures to strengthen the logistics sector’s infrastructure, including the establishment of dedicated freight corridors and the extension of road and rail networks, aimed at improving connectivity and reducing travel time. Additionally, the sector is undergoing a significant digital transformation with initiatives like Digital India, Bharat Net and the National Logistics Portal, contributing to its digitisation. Furthermore, the government has announced plans to establish logistics parks and warehouses across the country to provide adequate storage facilities for businesses. 

The warehouse sector has experienced rapid growth in recent years, driven by the expansion of e-commerce, robust infrastructure, the implementation of the Goods and Services Tax (GST) and the growth of organised retail. The recently implemented National Logistics Policy aims to reduce India’s logistics costs from doubledigit figures of GDP to single digits by 2030. 

The warehouse sector has experienced rapid growth in recent years, driven by the expansion of e-commerce, robust infrastructure, the implementation of the Goods and Services Tax (GST) and the growth of organised retail. The recently implemented National Logistics Policy aims to reduce India’s logistics costs from doubledigit figures of GDP to single digits by 2030.
 

Financials

The logistics industry in India is experiencing significant growth, driven by the thriving e-commerce market and advancements in technology. It is projected that the logistics sector will contribute 14.4 per cent to the country’s GDP. The industry has evolved from a focus on transportation and storage to encompassing specialised functions such as end-toend product planning and management, value-added services for last-mile delivery, predictive planning and analytics. A key factor driving this expansion is the emergence of India’s logistics industry, which employs 22 million people and serves as a critical infrastructure for various businesses. 

In 2021, the logistics sector in India was valued at USD 250 billion, and it is expected to reach an impressive USD 380 billion by 2025, with a healthy year-on-year growth rate of 10-12 per cent. Furthermore, the government aims to reduce the logistics and supply chain costs in India from the current 13-14 per cent to 10 per cent of the GDP, in line with industry standards. Several factors contribute to the growth of the logistics industry, including the escalating demand for e-commerce services, the expansion of the manufacturing and retail sectors, and the government’s emphasis on infrastructure development. The logistics industry in India is a vibrant and expanding sector that is poised for sustained growth in the upcoming years.
 

Outlook

Despite encountering some challenges, the sector is wellpositioned for sustained growth and offers enticing prospects for investors and businesses. With a strong focus from the government on infrastructure development and the exponential growth of e-commerce, the industry is expected to emerge as a key driver of economic progress in India. Furthermore, with the increasing adoption of advanced technologies and the government’s emphasis on building a digital economy, logistics companies have ample opportunities to leverage data analytics, artificial intelligence and machine learning to optimise their operations and enhance customer satisfaction. 

Embracing advanced technologies, harnessing data insights, and cultivating collaborative digital ecosystems are key strategies to streamline supply chains. Moreover, these trends are creating opportunities for niche start-ups as companies strive to outperform competitors and meet the evolving demands of customers. 

The growing logistics market in India also presents attractive prospects for foreign investment as international companies seek to capitalise on this thriving sector. The government has facilitated foreign investment in the industry by permitting 100 per cent foreign direct investment in logistics parks and warehouses, making it easier for international firms to participate in India’s logistics market. The implementation of India’s National Logistics Policy holds the promise of enhancing both domestic and international trade. 

By integrating diverse logistics services and establishing a well-connected supply chain network, the policy aims to enhance the competitiveness of India’s logistics sector. It envisions cost reduction, efficiency improvement, and increased utilisation of technology. Moreover, the policy places significant emphasis on the development of multi-modal transportation infrastructure such as ports, airports and roadways. This strategic focus on improving connectivity and addressing supply chain bottlenecks is poised to have a positive impact on India’s logistics landscape. 

The transportation and logistics industry in India is poised to be a crucial driver in achieving the country's ambitious growth goals. A recent EY report titled "India@100: realizing the potential of a US$26 trillion economy" predicts that India will reach an impressive US$26 trillion by FY 2048. Over the next 25 years, the industry will play a vital role in supporting India's journey towards this milestone.
 

Media and Entertainment 

The media and entertainment (ME) industry in India is experiencing remarkable growth and is considered a promising sector for the economy. Factors such as the widespread availability of affordable high-speed internet, increasing disposable incomes, and rising consumer purchases of durable goods have played a significant role in its advancement. India’s ME industry stands out from others due to its large volume of content and a continuous increase in average revenue per user (ARPU). These factors have greatly contributed to the industry’s success, making India a global leader in digital adoption and providing companies with valuable data to better understand their customers. Additionally, India has emerged as a preferred destination for content creation, particularly in the VFX sector, presenting abundant opportunities for growth in this field.
 

Financials

In the fourth quarter of FY23, the net box office collection (NBOC) for Bollywood and Hollywood movies (excluding regional films) amounted to ₹ 9.0 billion. This represents a 39.7 per cent year-on-year increase but a decline of 18 per cent quarter-on-quarter. While movies like ‘Pathaan’ and ‘Tu Jhoothi Main Makkaar’ performed well and crossed the ₹ 1 billion mark, the response to most other movies was mediocre. As a result, it is anticipated that PVR, in its first quarter of consolidated reporting after the merger with Inox, will witness footfalls of around 30 million but only achieve a breakeven in terms of pre-Ind-AS EBITDA for the quarter. 

On the broadcasting side, ZEEL’s performance is expected to be negatively impacted by a blackout of 10-15 days due to the deadlock between broadcasters and distributors over channel re-pricing following NTO 3.0. Additionally, the absence of meaningful revenue from hosting the Indian Premier League (IPL) tournament, coupled with increased operating expenses, is likely to lead to EBITDA margins dropping to a multi-year low of 7.9 per cent.Looking ahead, the recovery of TV advertisements will heavily rely on the resumption of advertising expenditures by FMCG companies. The improvement in advertising will also play a crucial role in enhancing the profit margins of broadcasters in the future. Another significant development to monitor is the completion of the merger between Zee and Sony.
 

Outlook

The Indian media industry has immense potential for growth across all segments due to rising incomes and evolving lifestyles. According to the latest report by PwC, the media and entertainment industry in India is projected to reach ₹ 4,30,401 crore (USD 53.99 billion) by 2026, with a compound annual growth rate (CAGR) of 12.95 per cent between 2019 and 2026. This growth is fuelled by the increasing demand for content among users and the availability of affordable subscription packages. 

The Indian mobile gaming market is also experiencing significant growth and is projected to reach USD 1.99 billion in 2024, in line with the global trend. The music industry is expected to reach USD 366 million by 2024, driven by platforms like YouTube that offer free access to music content, leading to an anticipated increase in paid OTT music subscriptions, reaching around 5 million end-users by 2023 and generating revenue of approximately ₹ 2 billion (USD 27 million). The animation, visual effects, gaming and comic (AVGC) sector within the ME industry is experiencing a growth rate of approximately 29 per cent, while the audiovisual sector and services are rising at a rate of around 25 per cent. This sector has been recognised as one of the champion sectors by the Government of India. 

According to Piyush Goyal, Union Minister of Commerce and Industry, Consumer Affairs and Food and Public Distribution and Textiles, the AVGC sector is projected to grow at approximately 9 per cent and reach around ₹ 3 lakh crore (USD 43.93 billion) by 2024. Furthermore, the OTT video services market, including video-on-demand and live streaming, is expected to achieve a CAGR of 29.52 per cent and reach USD 5.12 billion by FY26. This growth is attributed to the rapid development of online platforms and the growing demand for high-quality content among users. 

Looking ahead, the M&E industry is poised for significant growth in retail advertising, driven by the entry of various players in the food and beverages segment, the growing popularity of e-commerce platforms in India, and domestic companies venturing into new territories. The rural regions of India are anticipated to emerge as the next frontier for growth in the industry.
 

Plastic 

The Indian plastic industry is one of the most significant contributors to the country’s economy. Over 4 million people are employed by India’s plastic industry, which has expanded significantly since its inception and is now a major global player. The industry employs more than 2,000 exporters, has over 20,000 processing units, and is widespread throughout the country. In 2021, the size of the global plastic market was estimated at USD 440 billion. According to projections, the market may grow from USD 457 billion in 2022 to USD 643 billion in 2029. India’s consumption of plastic has surged 23-fold to almost 21 million tonnes over the past three decades. 

Currently, India is the third-largest consumer of plastics after China and the United States, using about 6 per cent of the world’s total quantity. The industry produces the polymer materials known as plastics and provides services that are crucial to a number of sectors including packaging, building and construction, electronics, aircraft and transportation. Floor coverings, fishnets, furniture, medical equipment, packaging supplies, plastic films, pipes and other raw materials are among the numerous plastic products manufactured. In fact, such is the widespread use of plastic in all spheres that several campaigns calling for its ban have not led to any significant changes.
 

Financials

In order to come up with the financial picture of the plastics industry, we evaluated all the leading manufacturers of plastic products. In terms of market capitalisation, Astral leads the industry, surpassing competitors by a significant margin. Finolex Industries and Polyplex Corporation were also industry majors. Polyplex Corporation reported the highest net sales and net profit for 2023, despite suffering a 35 per cent decline in net profit compared to last year. Astral , which emerged in second place, performed considerably better in terms of top-line and bottom-line performance. 

Despite having the lowest net sales for the year, Kkalpana Industries (India) had the biggest percentage increase in net sales of any company, soaring 578 per cent over the previous year while Nilkamal stunned investors by achieving stellar net profit growth of 62 per cent. Kriti Industries (India) and Jain Irrigation Systems reported the most losses. Only three companies failed to earn profits for the year, which is fairly remarkable but the majority of businesses had significant declines in net profits over the last year. According to market forecasts, the volatility of raw material prices and the rise in prices of polymers have impacted overall demand and profitmaking potential.
 

Outlook

Due to the lockdowns brought on by the pandemic, the demand for plastic in the building, construction and automobile sectors fell drastically. While the plastics industry was in a crisis, the medical industry rescued it by providing enormous opportunities. In addition, improved hygiene awareness and a rise in the buying of disposable goods designed to lower the risk of viral infections have revived the industry. It has significantly increased consumer demand for plastic food and beverage containers. To improve the country’s output of plastic manufacturing and to create employment, numerous plastic parks are being established in stages across the country. 

Meanwhile, the six approved plastic parks are in Madhya Pradesh, Assam, Tamil Nadu, Odisha and Jharkhand. Funds of up to 50 per cent of the project costs, or a maximum cost of ₹ 40 crore per project, are available under the plastic park schemes. In order to advance the country’s petrochemical technology and promote a research environment essential to the industry, the government has also initiated a programme for establishing centres of excellence. This will assist in promoting and creating new applications for plastics and polymers in the country. As public awareness over the environmental harm that polymers cause has grown, more strict government laws have been implemented. 

Straws, ear buds, plastic sticks and other items with limited utility but a tendency to be left lying around were among the single-use plastic goods that the Indian government urged the population to get rid of. Businesses must pay attention to the applicable laws and regulations in order to survive and avoid disruptions to their operations. Many companies and governments have started to use more environmentally friendly and non-plastic alternatives to avoid the negative impact on the environment, signalling a shift in the industry’s direction.

 

Power

The power sector in India is one of the most diverse in the world. Power generation sources range from traditional coal, lignite, natural gas, oil, hydro and nuclear power to feasible non-conventional sources such as wind, solar, agricultural and domestic waste. Electricity demand in the country has grown significantly and is anticipated to grow much further in the coming years. To meet the country’s growing need for power, substantial increases in installed generating capacity are required. 

With an installed capacity of 4,16,591 MW, India stands as the third-largest producer and consumer in the world. The Indian power sector has about 200 million customers and a service footprint of nearly 3.28 million square kilometres. Following the unification of the five regional grids, the system now runs as a ‘one nation-one frequency-one market’. As of May 2023, the state-wise installed generation capacity stood at 50 per cent for the private sector, 24 per cent for the central sector and 25.4 per cent for the state sector. 

Up to 57 per cent of the country’s power needs are met by fossil fuels out of which coal stands as the primary fuel for power generation, contributing 49.3 per cent to the total capacity installed. The renewable portfolio including wind, solar and other renewable energy sources contributes around 30.2 per cent while hydro energy forms 11.2 per cent of the total installed capacity. Although coal meets around 50 per cent of the country’s primary commercial energy requirements, there are growing concerns about its sustainability from an environmental perspective.
 

Financials

For the fiscal year 2023, the top 10 listed companies generated net sales of ₹ 331,418.764 crore, up by 32 per cent compared to ₹ 251,566.82 crore in FY22. Among the listed peers, Torrent Power, Adani Green, Adani Transmission and NTPC clocked robust sales growth driven by increasing power demand. Operating profit stood at ₹ 135,073.59 crore with a YoY growth of 11 per cent from ₹ 121,644.70 crore. Operating margins shrunk by 760 bps and stood at 41 per cent. Net profit for the listed peers came at ₹ 54,486.32 crore in FY23, up by 14 per cent YoY from ₹ 47,685.65 crore in FY22.
 

Outlook

In FY23, India’s per capita electricity consumption stood at 1,255 kWh, which is one-third of the world average and one-fifth of China’s average. The per capita electricity consumption is set for a high-octane growth trajectory in the upcoming year, boosted by the central government’s schemes to prop up last-mile connectivity and the states’ intent to ensure round-the-clock reliable power. As of January 2023, India generated 1,359.21 BU of energy (including renewable sources), representing a 10.08 per cent increase year-on-year. According to data from the Ministry of Power, India’s power consumption climbed 11 per cent year-on-year to 121.19 BU in December 2022. The overall generation (including generation from grid-connected renewable sources) in the country has increased from 1110.458 BU during FY15 to 1173.603 BU during the year FY16, 1241.689 BU during FY17, 1308.146 BU during FY18, 1376.095 BU during FY19, 1389.121 BU during FY20, 1381.855 BU during FY21, 1491.859 BU during FY22 and 1624.465 BU during FY23. 

Category-wise, thermal power generation increased by 8.21 per cent, nuclear generation increased by 2.66 per cent, hydro increased by 6.91 per cent, Bhutan imports reduced by 10.02 per cent while solar, wind and others increased by 19.10 per cent. The electricity generation target for the year 2023-24 was fixed at 1750 BU comprising 1324.110 BU Thermal; 156.700 BU Hydro; 46.190 Nuclear; 8 BU Import from Bhutan and 215 BU RES (Excl. Large Hydro). Around 11,36,124.53 GWh of power was consumed in the country during FY 21-22. NTPC Ltd, the country’s largest integrated power generator, has registered the highest-ever power generation of 400 BU in FY23, a growth of 10.80 per cent YoY. The majority of power imported from Bhutan is under a bilateral agreement between the Government of Bhutan and the Government of India. The tariff is negotiated by the government to ensure the supply of cheap imported power to consumers. 

As per the generation expansion planning studies carried out by the Central Electricity Authority (CEA) for 2029-30, the share of non-fossil fuel-based generation capacity in the total installed capacity of the country is likely to increase from around 42 per cent as of October 2022 to more than 64 per cent by 2029-30. This would reduce the dependence on fossil fuels in electricity generation and promote alternative sources of power like solar and wind. The Indian power sector is undergoing enormous change, which has changed the industry’s perspective. The future of the power industry in India is bright, and continuous economic expansion is driving electricity demand. The aim of the Government of India in achieving the mission of ‘Power for All’ has accelerated capacity addition in the country.
 

Real Estate

The real estate sector holds significant global recognition and encompasses four sub-sectors: housing, retail, hospitality and commercial. Its growth is closely tied to the expansion of the corporate landscape and the increasing demand for office spaces, as well as urban and semi-urban accommodations. The construction industry ranks as the third-largest sector among the 14 major sectors, considering its direct, indirect and induced effects on the overall economy. 

In India, the real estate sector plays a crucial role as the second-largest employment generator, trailing only the agriculture sector. Forecasts indicate a rise in investment from non-resident Indians (NRIs) in this sector, both in the short and long term. Among NRIs, Bengaluru is anticipated to be the most favoured destination for property investments, followed by Ahmedabad, Pune, Chennai, Goa, Delhi and Dehradun.
 

Financials

Based on their annual statements, let’s discuss the financials of the realty sector. The total net sales for FY23 increased by 17.80 per cent to ₹ 80,057.11 crore compared to ₹ 67,959.11 crore in FY22. Additionally, the total operating profit for FY23 increased by 0.56 per cent to ₹ 16,858.49 crore compared to ₹ 16,765.08 crore in FY22. The most notable improvement was seen in the net profit, which increased from ₹ 5,349.06 crore in FY22 to ₹ 6,887.88 crore in FY23, representing a substantial increase of 28.77 per cent. 

The total market capitalisation of the realty sector is more than ₹ 3 lakh crore as of June 2023. These positive financial results indicate the sector’s strong performance and growth during the mentioned period. In the Union Budget 2023-24, the Ministry of Finance has announced a commitment of ₹ 79,000 crore for the PM Awas Yojana, which represents a 66 per cent increase compared to last year. During the comparison between FY23 and FY22, DB Realty Ltd. and Anant Raj Ltd. demonstrated impressive performance in net sales, while Indiabulls Real Estate Ltd. and Ritesh Properties and Industries Ltd. encountered losses. 

Regarding operating profit, DB Realty Ltd. and Omaxe Ltd. showed strong performance, while TARC Ltd. and Indiabulls Real Estate Ltd. experienced setbacks. The Phoenix Mills Ltd. and Welspun Enterprises Ltd. emerged as top performers in net profit, whereas DB Realty Ltd. and Ashiana Housing Ltd. faced losses compared to FY23 and FY22. The real estate market in India is projected to experience significant growth in the coming years. By 2040, it is estimated that the market will expand to ₹ 65,000 crore, a substantial increase from ₹ 12,000 crore in 2019. 

This growth trajectory highlights the potential and attractiveness of the real estate sector in India. The Indian government, in partnership with the governments of several states, has made efforts to foster the industry’s growth. The ‘Smart City’ project, which aspires to construct 100 smart cities, will be in favour of real estate companies. It is estimated that an additional 2.5 crore units of affordable housing will be required by 2030 to accommodate this population growth and address the housing needs of the urban populace. 

Additionally, the real estate sector is anticipated to contribute 13 per cent to India's GDP by 2025, further solidifying its importance in the country's economic landscape.
 

Overview

The Securities and Exchange Board of India (SEBI) has approved the Real Estate Investment Trust (REIT) platform, allowing all types of investors to enter the Indian real estate market. In the following years, this move is likely to offer a lucrative opportunity worth ₹ 1.25 lakh crore. Indian real estate developers have embraced new challenges and undergone substantial modifications in response to an informed consumer base and the influence of globalisation. One major shift is the transition from family-owned to professionally managed firms. 

In conclusion, the real estate sector in India holds immense potential and is poised for significant growth. With its strong financial performance, positive market projections and government initiatives, the sector is set to contribute significantly to India’s economy and meet the rising demand for housing and infrastructure. Developers are adapting to changing consumer preferences and adopting professional practices, while government initiatives like the Smart City project aim to further boost the industry. The future looks promising for the Indian real estate sector as it continues to evolve and meet the needs of a rapidly growing urban population.
 

Retail

The Indian retail industry is dynamic, contributing over 10 per cent to the country's GDP and employing around 8 per cent of the workforce. It is divided into food and groceries (68 per cent), lifestyle (15 per cent), electronics (5 per cent), and others (12 per cent). As the world's fifth-largest retail destination, India offers growth potential. The middle-class market and increasing urban purchasing power attract international retailers. 

The sector is projected to reach USD 2 trillion by 2032, making India an attractive market for investments. The retail industry is growing significantly, expanding beyond major cities to smaller ones, driven by economic development, changing demographics, and consumer preferences. The shift in lifestyle among rural youth towards branded goods is also contributing to this growth.
 

Financials

In FY23 the top players in the retail sector have reported robust growth in their sales and net profit. Avenue Supermarts is primarily engaged in the business of organised retail and operates supermarkets under the brand name of D Mart. In FY23 it has reported a 38 per cent surge in sales, 44 per cent growth in operating profit and 59 per cent growth in net profit as compared to the previous year. Bata India manufactures and trades footwear. Sales of the company in FY23 surged by 45 per cent, operating profit grew by 73 per cent while net profit surged by a whopping 214 per cent as compared to FY22. Metro Brands Limited designs and manufactures footwear. 

The company offers men’s and women’s footwear, foot care products and related accessories. The company achieved exceptional performance as their sales increased by 58 per cent in FY23, operating profit grew by 57 per cent while net profit grew by 71 per cent. In general, the retail sector is witnessing strong performance driven by factors such as increasing consumer income, rising GDP per capita, changing demographics and the convenience of e-commerce. 

Additionally, companies are enhancing the desirability of their products through various marketing strategies. 

Outlook

India’s retail industry is thriving and is expected to reach over USD 1.8 trillion by 2030. E-retail is projected to grow to USD 120-140 billion by FY26 with 500 million online shoppers anticipated by 2030. The digital economy in India is set to touch USD 800 billion by 2030 and the e-commerce market aims for USD 350 billion in GMV by 2030. According to industry reports, e-commerce witnessed a remarkable 36.8 per cent YoY growth in order volumes. 

Online transactions in India reached 1.2 million daily with a total value of USD 300 billion in 2021 and a projected USD 1 trillion by 2026. The logistics sector expects to deliver 2.5 billion D2C shipments by 2030. The mature status of e-commerce brands is evident as consumer preference shifts towards online shopping throughout the year. The consumption story remains strong, driven by affluence, accessibility, awareness and attitude with household consumption reaching ₹ 130-140 trillion (USD 1.63-1.75 trillion) in 2021.
 

Telecom

India is currently the world's second-largest telecommunications market with a subscriber base of 1,170.38 million in December 2022, and has posted rapid expansion in the recent decade. The Indian mobile economy is quickly expanding and will contribute significantly to India's GDP. India has the second-highest number of internet subscribers in the world, with 832.20 million subscribers as of December 2022. Telecom penetration, also known as teledensity, has risen dramatically in recent years. Teledensity rose from 18.23 per cent in the fiscal year 2016 to 88.17 per cent in the fiscal year 2021. Continuing the upward trend, teledensity stood at 84.56 per cent in December 2022. 

Financials For this research, we looked at the top 13 firms in terms of market capitalization to examine the financial performance of the telecommunications industry in FY23. These companies combined market capitalization is approximately ₹ 5.8 lakh crore. Reliance Jio is leading the telecom market share with 35.15 per cent followed up by Bharti Airtel, Vodafone Idea, BSNL and MTNL with 31.38 per cent, 22.40 per cent, 10.39 per cent and 0.51 per cent, respectively. Looking at the financial performance, in FY23, amongst the equipment providers, Black Box Ltd registered YoY net sales growth of 17 per cent, the highest amongst its peers. 

In contrast, HFCL’s operating profit slipped by 4 per cent YoY to ₹ 665.86 crore. On the net profit front, GTL Infrastructure Ltd is leading in the telecommunication space and ITI Ltd showed a negative PAT of -401 per cent. In the telecom service providers group, Railtel Corporation of India Ltd, a ‘Miniratna’ PSE of the Government of India, registered sales growth of 27 per cent YoY. Reliance Communications and Bharti Airtel reported net profit growth of 39 per cent YoY and 21 per cent, respectively. 

Outlook

The future of the Indian telecommunication sector seems bright. In addition, India is one of the world's largest data consumers. According to TRAI, the average cellular data consumption per wireless data subscriber in June 2022 was 16.40 GB per month, up from 61.66 MB in March 2014. The government has accelerated telecom reforms and continues to be aggressive in expansion for telecom companies. In addition, the Department of Telecommunications was granted ₹ 97,579.05 crore in the Union Budget 2023-24. Research and development will receive ₹ 400 crore while BharatNet will receive ₹ 5,000 crore. With a futuristic perspective, the Department of Telecommunications (DoT) has formed a sixth generation (6G) innovation group to help push the development of 6G telecommunications (DoT) has formed a sixth-generation (6G) innovation group to help push the development of 6G technologies. The government has also introduced RailTel and launched a mini-Ratna PSU called Prime Minister Wi-Fi Access Network Interface (PMWANI) to access its public WiFi services across 100 railway stations, in 22 states. Between April 2000 and December 2022, FDI inflows into the telecom sector totalled ₹ 3,950 crore. This indicates that the telecommunication sector is one of the lucrative options in terms of investment and has good expansion scope.
 

Textile

India’s textile sector, which has been a part of the Indian economy for centuries, is one of the oldest industries in the country. It encompasses a diverse range of segments with hand-spun and hand-woven textiles at one end and technologically advanced mills at the other. One of the key strengths of the Indian textile industry is its robust production base, encompassing a wide variety of natural fibres like cotton, jute, silk and wool, as well as synthetic fibres such as polyester, viscose, nylon and acrylic. During April- October in FY23, the total exports of textiles stood at USD 21.15 billion. 

India’s textile and apparel exports to the US, its single largest market, stood at 27 per cent of the total export value in FY22. Exports of readymade garments including cotton accessories stood at USD 6.19 billion in FY22. India’s textile industry has around 4.5 crore employed workers including 35.22 lakh handloom workers across the country. The Indian textile and apparel industry is projected to experience a compound annual growth rate (CAGR) of 10 per cent from 2019-20, reaching a market size of USD 190 billion by 2025-26. India currently holds 4 per cent share of the global trade in textiles and apparel.
 

Financial

Highlights For this report we have considered the top 46 companies in terms of market capitalisation to assess the financial performance of the textile industry in FY23. The total market capitalisation of these companies is roughly about 1.9 lakh crore. The net sales in the textile industry grew by nearly 5 per cent on YoY basis. However, the operating profit declined by 28 per cent YoY. Subsequently, the PAT exhibited a decline of 20 per cent. 

Company-wise, in FY23, Swan Energy exhibited the highest top-line growth of 282 per cent. However, the company continued to be non-profitable as it posted net loss of ₹ 61.05 crore as compared to net loss of ₹ 157.89 crore in FY22. In terms of bottom-line growth, Pearl Global Industries exhibited the highest net profit growth of 118 per cent on YoY basis to report ₹ 152.93 crore. The company’s net sales rose by 16 per cent from FY22 to report ₹ 2,713.53 crore.
 

Outlook

The future of the Indian textile industry holds great promise, driven by strong domestic consumption and a growing demand for exports. To bolster the technical textile sector, India is implementing various significant initiatives. The corona virus pandemic has resulted in a surge in the need for technical textiles, especially in the form of personal protective equipment (PPE) suits and equipment. Leading industry players are placing strong emphasis on sustainability by manufacturing textiles that utilise natural and recyclable materials. 

With increasing consumerism and disposable income, the retail sector has experienced rapid growth over the past decade, attracting renowned international brands to venture into the Indian market. The textile industry’s growth will be driven by rising household incomes, a growing population, and increased demand from sectors such as housing, hospitality, healthcare and more. In order to promote private investment and create more employment opportunities, the government has introduced several schemes. These include the Scheme for Integrated Textile Parks (SITP) aimed at establishing integrated textile parks and the Technology Upgradation Fund Scheme (TUFS) which facilitates the modernisation of textile machinery. 

Meanwhile, the Mega Integrated Textile Region and Apparel (MITRA) Park scheme is focused on developing large-scale textile and apparel regions. The market for automotive textiles within the technical textiles segment is projected to reach USD 3.7 billion by 2027 compared to USD 2.4 billion in 2020. Similarly, the industrial textiles market is expected to grow at a compound annual growth rate (CAGR) of 8 per cent, expanding from USD 2 billion in 2020 to USD 3.3 billion in 2027. Overall, the Indian textile market is anticipated to surpass USD 209 billion by 2029. 

Exports were impacted this year due to two main factors: the significant inventory held by international buyers and the high cotton prices in India during the previous year. This inventory issue also affected orders to countries like Bangladesh. However, there has been a resurgence in sourcing by buyers as they resume fulfilling their requirements. Despite challenges such as the Russia-Ukraine war, sluggish demand in major garmentimporting nations, tough competition from other leading apparel manufacturing countries, and initial volatility in raw material prices, India managed to increase its global apparel exports in the 2022-2023 period. This success can be attributed to initiatives like the 'Make In India' campaign, which has attracted investments and created new manufacturing opportunities. 
 

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