Infrastructure, IT, Real Estate, And More: Navigating Profitable Sectors In 2024

Infrastructure, IT, Real Estate and more: Navigating profitable sectors in 2024.

The Indian Economy is set to record 6.5% growth in the financial year 2024, according to the assumptions of S&P Global. September's data showed that the Indian economy stretched 7.6% year on year. If India continues to grow like this then India can surpass China's growth % of less than 5% in the upcoming year. The current standing and projected growth of the Indian economy position India as a lucrative hub for foreign investment. On that note, Let's take a look at how 2024 can be for the Indian Market and which sectors can be more profitable this year.

A quick look at how 2023 has been for the Indian Stock Market

The Bombay Stock Exchange Sensex index marked an all-time high in September. It was 75,057 and the market may touch the 75,000 mark by the end of this FY 2024. This assumption comes after a dip of 3% underscoring the market's resilience. Notably, the benchmark index Nifty soared by nearly 15% from January 2023 to December 2023. It delivered a dividend of 1.24%. It was a stable performance despite the economic slowdown.

2023 recorded over 15% in earnings, which caused analysts to declare a bullish environment for the rest of the year. It hopes to sustain growth in 2024 too.

The Nifty's current PE ratio is 22 which is driven by domestic equity prices and PE ratios. These aspects helped India to become a top-performing market and positioned it comfortably for future growth. Because of this consensus among analysts remains positive. As per the prediction, the market can perform well by 15% in the next 6 months.

Sectors to watch out for in 2024

We judged the current bullish environment of the market. After this analysis, we can see that positive trends are anticipated in all major manufacturing and service sectors. Among them, some of the sectors that will perform well in 2024 include -

Infrastructure

With the  Indian Government's efforts to make rail, road, and air connectivity, enhance energy supplies, and cross renewable targets, the sectoral opportunities across the infrastructure segment are bound to be ample. This sectoral contribution increased by 8.6% year on year between April to October 2023.

IT

The IT sector of India currently adds approx. 8% of the country's GDP. By 2030, It is predicted that the IT sector can generate $350 billion in revenue. Because of the positive momentum in the market, they came out with this prediction, particularly in this sector. The potential advancements and innovations in Artificial Intelligence and IoT (Internet of Things)are expected to keep the IT sector productive for the upcoming years. 

Real Estate Sector

India recorded sales in 7 cities, recording a 36% growth at 1.20 lakhs in a year, in the 3rd Quarter of 2023. Despite, rising property prices, developments in commercial arenas, healthcare, and education continue to fuel the growth of the real estate sector. With the developmental projects in Villages, and roads, this sector will be profitable in 2024.

Energy

In 2024, the Energy sector should rise with the support of government policies and decreasing the cost of renewable energy technology. The demand for clean energy is increasing year by year. Renewable energy stocks like Wind, Bioenergy, Solar, and Hydropower energy stocks have great potential to perform in 2024. 

Metal

The metal sector could show mixed performance in 2024, some other metals can perform extremely well. For instance, Copper is expected to perform well this year. Its demand is increasing rapidly in infrastructure development projects. In the same case, Aluminum can also have good growth due to the support of the automotive and aerospace industries. However, their prices could remain stable or show a modest increase. Precious metals like Gold will be a safety blanket to hedge market fluctuations.

Banking

Public Sector Unit banks and banking stocks are set to grow in 2024 as the market still holds a bullish outlook towards this sector. Typically, the future of PSU banks is tied to the performance of the sectors that borrow money from them. Most of the NPA (non-performing assets) of the PSU Banks as been rapidly resolved. The banks' stocks are positioned so well that they will perform well in 2024 and upcoming years as well.

Anticipated Stock Market Sentiment for 2024

A poll was scheduled recently of equity strategists who found a positive market sentiment towards the Indian market in 2024. The market is expected to increase at a rate of 10% by the end of 2024.

The current environment of the Indian Market can be increased by young traders and investors. In recent years, the growth of young investors, financial literacy, and a strategic approach toward investing and trading have propelled the selling and buying of stocks and mutual funds. The mutual fund also saw a massive jump, with 150 million accounts in action being today, and 60 million functional in 2016.

Based on the current market situation and projected growth prospects, the market can be bullish and in the favor of investors. However, the market is still volatile and it is best to analyze the market trends before making any investment and trading decision.

This article was written by VLA AMBALA, SEBI registered Research Analyst and Founder of Stock Market Today.