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Vivek Sukhani
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Joined: 23/Jul/2006
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   Posted: 18/Oct/2006 at 7:34pm |
I agree with you vip1.Also, returns from these sectors are dpendent upon the competition in the prevailing sectors. Most of these sectors require big initial capital investment and the resulting profit/Fixed asset is not very high.Also, a sector like Insurance requires very good participation from re-insurers, which India doesnt have many. It is they who will make a killing.Telecom is definitely good. Problem is out of the sector mentioned, there are some public sector giants already in them. For instance in insurance, LICwill continue its march given its strength of distribution and agent loyalty.Telecom also has BSNL and MTNL which may lag behind however.Logistics, is also a place where state owned or controlled enterprises dominate.Airlines is something which will always look decent but they will not be investors' delight for long. retailing may be definitely an area of importance but you need to watch out for competition.So, scalability is definitely an opportunity but how much will translate into profits is a different game altogether.
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basant
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Posted: 18/Oct/2006 at 7:45pm |
This 400 Billion USD is a spend over a period of time:
__________________________________________________________
Yes that is what I meant. The above figures reflect annual industry/sales only.
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kulman
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Joined: 02/Sep/2006
Location: India
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Posted: 05/Nov/2006 at 12:13pm |
Most people in the market are obsessed with outperforming returns from major indices (Sensex/Nifty). Even during the Diwali show, the heroes mentioned on CNBC that large-caps would out-perform mid & small caps in any market over the long term.
Now without getting into the debate of large v/s mid/smaller-caps, let's do some crystal gazing to project the future composition of Sensex.
Given below is approximate current composition & some wild guesses on sector-wise projection. It's just a wild guessing really, one might call it too macro or too much of a top-down approach.
Some of the points to consider are:
- Which sectors would become larger than what they are today, so would command larger weightage?
- My own view is that over the next decade, financial services would become bigger commensurate with growth in income levels/GDP. As Basant jee mentioned insurance would be an area.
- As India's young population grows older they would need more healthcare services. In fact with upwardly mobile sedentary lifestyle, my view is that Pharma companies would have lots of opportunity within India itself. As such, some of the large Pharma majors would really become MNCs in years to come. Here if Pharma is not one's "circle of competence", but one could back good & proven managements.
- Energy/Power needs would rise multifold and so utilities will benefit.
The idea is to indetify growth areas & large companies (with good managements) in those sectors which are likely to benefit by sheer size of the opportunity. Here one may not be looking at multi-baggers though, but steady earners with lesser downside.
| SECTOR |
Current Weightage |
Projection 2010 |
Projection 2015 |
| TELECOM |
8.7 |
9 |
8 |
| METAL |
3.3 |
4 |
3 |
| IT-SOFTWARE |
21 |
18 |
12 |
| PHARMA |
3 |
5 |
7 |
| CEMENT |
2.2 |
2 |
2 |
| ENGG |
7.5 |
7 |
7 |
| AUTO |
6.7 |
4 |
4 |
| ENERGY/OIL |
10.4 |
10 |
12 |
| POWER |
7.2 |
10 |
12 |
| PETROCHEM |
10.6 |
10 |
10 |
| FMCG |
7.6 |
8 |
8 |
| BANK/FIN INST |
11.8 |
13 |
15 |
| NEW ADDITION? |
? |
? |
? |
| Total |
100 |
100 |
100 |
Let's debate on this......
Edited by kulman - 05/Nov/2006 at 12:16pm
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Life can only be understood backwards—but it must be lived forwards
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s_praharaj
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Joined: 10/Sep/2006
Location: India
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Posts: 357
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Posted: 05/Nov/2006 at 12:38pm |
To my mind the following sectors will also grow.
1. Companies working on software and telecom security.
2. Drinking Water will be scarce and there may be great movements in this area.
3. Power from alternate source. In this Nuclear Power is one of the sectors.
4. Drug Research- Now research for cure of many diseases are in a low ebb. I feel, like software boom now going on, the next boom and discovery will be in Pharmaceutical Research.
We have to see which will be the best companies in these sectors which can reap the benefits in after say 5 years from now.
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Shashi Praharaj
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basant
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Posted: 05/Nov/2006 at 10:06pm |
Great work Kulman ji. Let me put in my thoughts with some reasoning:
1) In 2010 the car and bike market should double so the weightage could at best be stable so I would not change that.
2) Organized Retailing should be a Rs 150,000 crore sector in the listed segment that is about 1,50,000 crore of market cap. The sensex is Rs 16 lac crore now and should be Rs 30 lac crore in 2010. Therefore retailing should take about 4-5% of weightage.
3) Private Insurance should eb a Rs 50,000 crore market. it is around 25,000 crore now. That gives it at least 2-3% weightage
4) Telecom should increase 5 times but the index will have Bharti and RCOVL so this weightage should double by that to at least 16%.
5) Media will be a small upcoming sector and we should have a 1-2% weightage with Zee and any other company. I would not guess that name???
6) That brings us to the mathematical impossibility the total exceeds 100%. See India is a services led economy I would think that weightage of the old economy will decrease so while power generation would go up its weightage could actually decrease since power companies would not be able to keep pace with the service economy in growth also the cement and other material sectors could actually see a weightage compression. We need to see which sectors would grow faster then the others so even though a sector would grow at 10% its overall weightage could decrease if the average growth is say 15%.
What do you all say?
Edited by basant - 05/Nov/2006 at 10:13pm
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omshivaya
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Joined: 06/Sep/2006
Location: India
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Posted: 10/Nov/2006 at 4:29pm |
Basant ji,
When do you think TV18 should become part of the sensex? IT etc. came into the sensex and before that there were other bellwethers in sensex. Now, which ones do you think would be bellewethers. In what sector especially? In let's say Japan, which are the companies in the top 30 of the major index, like here in sensex. If India has a Japan kind of secular bull rally, I just wanted to get an idea where we could be headed.
Thanks
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The most important quality for an investor is temperament,not intellect.A temperament that neither derives great pleasure from being with the crowd nor against it
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basant
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Posted: 10/Nov/2006 at 4:36pm |
Just before it becomes a twenty bagger from here.
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omshivaya
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Posted: 10/Nov/2006 at 4:47pm |
Okay then. I'll give TV18 around 7-8 years for that no more
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The most important quality for an investor is temperament,not intellect.A temperament that neither derives great pleasure from being with the crowd nor against it
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