Indian Stock Market Sector Research and Analysis by VR Advisors

Aluminium Sector Analysis Report

  • Aluminium Industry is the second most important metallurgical industry in India. The industry is primarily dominated by companies such as Hindalco and Vedanta, which are privately owned by NALCO.
  • Aluminum is the second most used metal in the world after steel with an annual consumption of approximately 88 million tonnes (including scrap). It is also the fastest growing metal which has grown by nearly 20 times in the last sixty years (compared to 6 to 7 times for other metals).

Auto Ancillaries Sector Analysis Report

  • The fortunes of the auto ancillary sector are closely linked to those of the auto sector. Demand swings in any of the segments (cars, two-wheelers, commercial vehicles) have an impact on auto ancillary demand. Demand is derived from original equipment manufacturers (OEM) as well as the replacement market.
  • The Auto Ancillary sector is closely linked to Automobile Industries. The Indian Auto Ancillary industry is one of the crucial industries in India with higher growth prospects. Some examples of Auto Ancillary industries are: Tyre industries, Battery, Gears, Engines etc.

Automobiles Sector Analysis Report

  • The Indian automobile market can be divided into several segments viz., two-wheelers (motorcycles, geared and ungeared scooters and mopeds), three wheelers, commercial vehicles (light, medium and heavy), passenger cars, utility vehicles (UVs) and tractors.
  • India is currently the world’s 5th largest manufacturer of cars, 7th largest manufacturer of commercial vehicles, and the largest manufacturer of two wheelers in the world. Indian automotive industry (including component manufacturing) is anticipated to reach Rs 16.2-18.2 trillion (US$ 251.4-282.8 billion) by 2026.

Banking Sector Analysis Report

  • The Indian banking system consists of 27 public sector banks, 21 private sector banks, 49 foreign banks, 56 regional rural banks, 1,562 urban cooperative banks and 94,384 rural cooperative banks, in addition to cooperative credit institutions.
  • As of Q1 FY19, total credit extended by commercial banks surged to Rs 86,976.2 billion (US$ 1,297.4 billion) and deposits grew to Rs 115,070.3 billion (US$ 1,716.4 billion).

Cement Sector Analysis Report

  • With ~509 million tonnes per year (mtpa) of cement production capacity as of March 2019, India is the second largest cement producer in the world and accounts for over 8% of the global installed capacity.
  • As of July 2019, the production of cement stood at 28.1 million tonnes. The cement production capacity is estimated to touch 550 MT by 2020. Of the total capacity, 98% lies with the private sector and the rest with the public sector. The top 20 companies account for around 70% of the total production.

Energy Sources Sector Analysis Report

  • India’s energy requirements have grown significantly since market reforms were initiated by the Government of India in the 1990s. Energy sector reforms, capacity addition and improvement in existing infrastructure are the government’s primary focus areas as energy is a key necessity for meeting the country’s high economic growth expectations.
  • There are presently three major pipeline entities in gas transportation in the country – GAIL (operating HVJ and DVPL), RGTIL and GSPL. The natural gas is sourced from KG-D6, Mumbai offshore, Cambay Basin, Ravva Offshore, KG Basin, Cauvery basin and imported LNG.

Engineering Sector Analysis Report

  • The engineering sector is the largest of the industrial sectors in India and can be broadly categorized into two parts, namely heavy engineering and light engineering. India’s engineering industry accounts for 27% of the total factories in the industrial sector and represents 63% of the overall foreign collaborations. It has emerged as the largest contributor to the country’s total merchandise exports.
  • Capacity creation in sectors such as infrastructure, power, mining, oil & gas, refinery, steel, automotive, and consumer durables are driving demand in the engineering sector. The sector has a comparative advantage in terms of manufacturing costs, market knowledge, technology and creativity.

Fast Moving Consumer Goods Sector Analysis Report

  • Fast moving consumer goods (FMCG) is the 4th largest sector in the Indian economy. There are three main segments in the sector – food and beverages which accounts for 19% of the sector, healthcare which accounts for 31% and household and personal care which accounts for the remaining 50%.
  • Growing awareness, easier access and changing lifestyles have been the key growth drivers for the sector. The urban segment (accounts for a revenue share of around 55%) is the largest contributor to the overall revenue generated by the FMCG sector in India. These initiatives are expected to increase the disposable income in the hands of the common people, especially in the rural area, which will be beneficial for the sector.

Hotels Sector Analysis Report

  • The Indian tourism and hospitality industry has emerged as one of the key drivers of growth among the services sector in India. Tourism in India has significant potential considering the rich cultural and historical heritage, variety in ecology, terrains and places of natural beauty spread across the country. Tourism is also a potentially large employment generator besides being a significant source of foreign exchange for the country.
  • The World Travel & Tourism Council (WTTC), the global authority on travel and tourism, has done a research study called ‘India 2019 Annual Research’, which shows that travel and tourism in India contributed 9.2% of the GDP and provided 42.7 million jobs or 8.0% of the total employment.

Insurance Sector Analysis Report

  • The insurance industry can be broadly divided into two: life insurance and general insurance. While life insurance relates to risk cover for life or disability/accidents of an individual or a group of individuals, general insurance or non-life insurance covers risk to other insurable assets such as property, vehicles, health etc.
  • The insurance sector is regulated by the Insurance Regulatory and Development Authority of India (IRDAI). The IRDAI opened up the insurance sector for private participation in 2000. Until 2000, there were only one life insurer and four general insurers in the country, all from the public sector. Presently there are 24 life insurance companies and 34 general insurance companies operating in the country.

Investment & Finance Sector Analysis Report

  • 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 sector comprises commercial banks, insurance companies, non-banking financial companies, co-operatives, pension funds, mutual funds and other smaller financial entities.
  • The banking regulator has allowed new entities such as payments banks to be created recently thereby adding to the types of entities operating in the sector. However, the financial sector in India is predominantly a banking sector with commercial banks accounting for more than 64% of the total assets held by the financial system.

Media Sector Analysis Report

  • The Indian Media and Entertainment (M&E) industry is a sunrise sector for the economy and is making high growth strides. Proving its resilience to the world, the Indian M&E industry is on the cusp of a strong phase of growth, backed by rising consumer demand and improving advertising revenues.
  • The industry has been largely driven by increasing digitization and higher internet usage over the last decade. Internet has almost become a mainstream media for entertainment for most of the people.

Paints Sector Analysis Report

  • The Indian paint industry is over 100 years old. Its beginning can be traced back to the setting up of a factory by Shalimar Paints in Calcutta (now Kolkata) in 1902. Until World War II, the industry consisted of small producers and two foreign companies.
  • The domestic paint industry is estimated to be a Rs 500 billion industry with the decorative paint category constituting almost 75% of this market. The decorative paint market includes multiple categories depending on the nature of the surface like exterior wall paints, interior wall paints, wood finishes, enamels as well as ancillary products like primers, putties, etc.

Pharmaceuticals Sector Analysis Report

  • India enjoys a key position in the global pharmaceutical industry. The country is the world’s largest supplier of generics, accounting for 20% of global exports. It supplies over 50% of global demand for various vaccines and 40% of the demand for generic products in the US. The domestic pharmaceutical market contributes to ~2% of the global industry in value and ~10% in volume terms.
  • The domestic pharmaceutical industry has received foreign direct investment (FDI) worth US$ 16 billion on a cumulative basis, between April 2000 and June 2018.

Power Sector Analysis Report

  • With a generation of 1,561 terawatt-hour (TWh), India is the third largest producer and the third largest consumer of electricity in the world. Electricity production reached 360.5 GW as of July 2019.
  • India ranked sixth in list of countries to make most investment in clean energy at US$ 90 billion. Renewable energy is fast emerging as a major source of power in India.

Retailing Sector Analysis Report

  • India is currently the world’s second-largest telecommunications market with a subscriber base of 1.20 billion and has registered strong growth in the past decade and half.
  • The liberal and reformist policies of the Government of India have been instrumental along with strong consumer demand in the rapid growth in the Indian telecom sector. The government has enabled easy market access to telecom equipment and a fair and proactive regulatory framework that has ensured availability of telecom services to consumer at affordable prices.

Shipping Sector Analysis Report

  • India has 12 major and 200 notified minor and intermediate ports. The Indian ports and shipping industry plays a vital role in sustaining growth in the country’s trade and commerce. India is the sixteenth largest maritime country in the world, with a coastline of about 7,517 km.
  • Since ports handle almost 95% of trade volumes in India, the rising trade has contributed significantly to the country’s cargo traffic. Capacity at major Indian ports reached 1,477 million tonnes by FY19.

Software Sector Analysis Report

  • India is the leading sourcing destination across the world, accounting for approximately 55% market share of the US$ 185-190 billion global services sourcing business.
  • India’s IT industry can be divided into six main components, viz. Software Products, IT services, Engineering and R&D services, ITES/BPO (IT-enabled services/Business Process Outsourcing), Hardware, and e-commerce. The Indian IT sector will benefit significantly from the government’s schemes like Digital India, Make in India, and Start Up India.

Steel Sector Analysis Report

  • Being a core sector, steel industry tracks the overall economic growth in the long term. Also, steel demand, being derived from other sectors like automobiles, consumer durables and infrastructure, its fortune is dependent on the growth of these user industries. This provides major cost advantage to the domestic steel industry.
  • India was the world’s second-largest steel producer with production standing at 106.5 MT in 2018. The growth in the Indian steel sector has been driven by domestic availability of raw materials such as iron ore and cost-effective labour. Consequently, the steel sector has been a major contributor to India’s manufacturing output.

Telecom Sector Analysis Report

  • India is the world’s second-largest telecommunications market, with around 1.2 billion subscribers as of September 2018. The telecom market can be split into three segments – wireless, wireline and internet services. The wireless market comprises 98.1% of the total subscriber base. India’s telephone subscriber base has expanded at a CAGR of 19.6%, reaching 1,183.4 million at the end of FY18. Tariff reduction and decline in handset costs has helped the segment to gain in scale.
  • The cellular segment is the dominant segment in the industry by making itself available in the rural areas where the teledensity is far lower (56.9%) than that in urban India (171.1%).

Textiles Sector Analysis Report

  • India’s textile industry is among the oldest industries in the country dating back several centuries. It is one of the largest contributors to the economy accounting for 4% of the GDP.
  • It is the second largest contributor towards employment generation, after agriculture, contributing 10% to the country’s manufacturing, owing to its labor-intensive nature.

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