As an investor, when you invest in a stock market, you not only look at the past and current performance of the stock. You also try to predict future performance. You should know how to select stocks that will perform in the future and invest accordingly. If you cannot do it yourself, take help from your equity advisory services.
There are hundreds of stocks, and picking good stocks is not easy. Hence what you can do is first select the themes that can grow in the future. Look out for themes that have grown exponentially and will continue to dominate the market in the coming years. Once you know the themes, you can pick the best stocks from them. The stock advisory company can help you with the analysis.
In this article, we will talk about the three themes that will grow in the future. Every investor who wants to create wealth should invest in them.
Electric Vehicle
Electric vehicles should not have come as a surprise to you with so much news around this theme. Before we understand why to invest in this theme, it is essential to know why the electric vehicle theme is on the list.
Countries across the globe are adopting electric alternatives because of climate change. In terms of air quality, India ranks 168 in the Environmental Pollution Index (EPI). India has no choice but to push for electric vehicles and push hard. With the electric vehicle push, India will have the double advantage – climate change control and reduction in crude oil import.
The government has set a target of 100% electrification by 2030. It is an ambitious target set by the government, especially when we have made little progress since the announcement. However, the push is still there from the government – the state government has introduced subsidies for electric vehicles.
Given the size of the Indian automobile market, even if we do not achieve the target of 100% electrification, the companies around the electric theme will grow significantly. There are a lot of stock categories under this, and investors should pick stocks from each category. Investors should explore companies that will produce electric vehicle batteries, and provide power charging stations. Needless to say, companies manufacturing electric vehicles should be on top of your list.
Consumer Discretionary
It is not a new theme, but it will remain intact for the long term. We are sure some of you must be wondering what this theme is about. The companies in this theme manufacture automotive, household durable goods, textiles, apparel, and leisure equipment. The services segment includes hotels, media production and services, restaurants and other leisure facilities, and consumer retailing and services.
Some of you may be wondering why this is on the list, right? The disposable income in India is expected to grow exponentially. It means an uptrend in consumption will happen. At present, the number of middle-class (earning between Rs 4 lakh and Rs 10 lakh) families in India is close to Rs 6 crore. As per projections, the number will grow to Rs 12 crore in the next few years.
China grew at a similar pace in the last ten years, and now India will follow the same pattern. The demand for consumer discretionary products will grow at 12-14% (projections). India will be the next growth market for products like branded apparel, washing machine, room ACs, etc.
You should look out for stocks that are doing well in this theme and can increase production as and when required – when the demand increases.
Renewable Energy
If you had checked Reliance’s Q1FY22 results, this theme would make a lot of sense to you. The company has announced that it will invest Rs 75,000 crore in the new energy business over the next three years. The Adani Group is already a big player in this industry.
India is the second-largest consumer of electricity in the world and the third-largest producer. Why does this theme have an excellent growth opportunity? First, the government has a vision of ensuring quality and 24*7 affordable power for all. Second, as per projections, India’s energy demand will double by 2040 from the current level. It has the potential to triple in the future.
As already mentioned (under the consumer discretionary theme), the demand for products like room ACs, washing machines, etc will increase. Also, the temperature in India is rising, so everyone who could afford cooling devices will buy them. Hence the power demand will also increase.
India will have 100 crores ACs by 2050. It would require a massive amount of power generation capacity. It is where the renewable energy companies come to the party – to meet this demand.
Conclusion
Investors should closely watch these themes and not miss the investment opportunity in them. Stocks under these themes have the potential to give much higher returns to you as they have tremendous growth potential.
However, when you invest in stocks under these themes, you have to have patience. If your investment horizon is short and you cannot hold your investment for 10+ years, you may not reap the benefits fully. Holding on to investments for this long requires a clear mindset, and equity advisory services can bring that to you. There is an alternate solution too.
We understand selecting stocks is not easy – especially the good ones and hence we have created Jarvis for you. It is an AI-driven platform that creates a personalized stock portfolio for you based on your risk profile and investment horizon.
If you are afraid of investing in equity because you don’t understand the market, then you should definitely explore the Jarvis app. The app will tell you which stocks to keep in the portfolio and when to sell the existing investment. Over time, you will learn the art of investing if you analyze what you are doing.