The Indian government has set a roadmap to move the economy towards a $5 trillion milestone through a multifaceted approach.
The government has undertaken key initiatives such as promoting a digital economy, advancing technology-driven development, facilitating the transition to sustainable energy, and implementing climate action plans.
Additionally, it is boosting sectors like infrastructure, defense, and power by providing Production-Linked Incentive (PLI) schemes and subsidies to support future growth.
Listed below are the few stocks to watch out for next 5 years:
INFRASTRUCTURE SECTOR
Motilal Oswal analyst anticipates a positive outlook on the infrastructure sector. Since 2014, the national highway network has seen substantial growth of 60 percent, expanding from 91,287 km to 146,145 km by the end of 2023.
The Bharatmala Pariyojana Phase I aims to further develop 34,800 km of national highways by 2027-2028. Moreover, the government intends to build 22 new greenfield expressways and increase the number of airports to 220 by 2030.
Larsen and Toubro Limited
Larsen & Toubro Limited is an Indian multinational engaged in Engineering-Procurement-Construction (EPC) Projects, Hi-Tech Manufacturing, and Services, operating in more than 50 countries globally.
In FY24, the company’s order book stood at Rs. 4,758 billion, increasing by 20 percent from Rs. 3,970 billion in FY23, while over the same period, the order inflow grew by 31 percent from Rs. 2,305 billion to Rs. 3,028 billion.
In Friday’s trading session, the shares of a company engaged in EPC projects closed at Rs. 3,618.55 on the BSE.
DEFENCE SECTOR
As per a report from Motilal Oswal, the government has introduced four ‘Positive Indigenisation Lists’ aimed at reducing import dependency and enhancing local manufacturing.
Furthermore, the Indian government has set a target to double defence exports to Rs. 50,000 crores by 2028-29, as part of efforts to achieve self-reliance and increase domestic procurement within the defence sector.
Bharat Dynamics Limited
Bharat Dynamics Limited, a Government of India Enterprise under the Ministry of Defence, is engaged in the manufacturing of Missiles and allied Defence equipment, along with providing the majority of its goods and services to the Indian Armed forces and the Government of India.
The export order position of Bharat Dynamics stood at nearly Rs. 2,420 crore, featuring potential products for export such as the Akash SAM (missile), Light Weight Torpedo (underwater weapon), and NAG (missile), among others.
During FY24, the company successfully executed and completed orders including the Heavy Weight Torpedo contract, export agreements for Light Weight Torpedo, and the Akash order for the Indian Air Force and more.
In Friday’s trading session, the shares of Bharat Dynamics closed at Rs. 1,468 on the BSE.
As of March 31, 2024, the company reported a total order book of Rs. 19,434 crores, with additional orders expected to materialize over the next 2-3 years amounting to nearly Rs. 20,000 crores.
RAILWAY SECTOR
According to a report by Motilal Oswal, there is a potential for a significant increase in Indian Railways’ capex. The government’s plans may include the modernization of existing trains with upgraded amenities and the introduction of new trains on high-demand routes.
In the last budget, the BJP government demonstrated its strong support for the railways by allocating Rs. 2.40 lakh crore for capex. This allocation is notably nine times higher than what was allocated by the UPA government in FY14.
Indian Railway Catering and Tourism Corporation Limited
IRCTC Limited, a Miniratna Central Public Sector Enterprise, is engaged in the business of online railway ticketing, catering services, packaged drinking water, and promoting travel and tourism in India.
IRCTC is the only entity authorized by Indian Railways to provide online railway tickets, catering services to railways, and packaged drinking water at railway stations and trains in India.
In Friday’s trading session, shares of the only entity authorized by Indian Railways to provide online railway tickets closed at Rs. 989.15 on the BSE.
IRCTC is focusing on enhancing its digital infrastructure to provide comprehensive services for train passengers. This includes developing an
integrated platform for all train-related needs and leveraging artificial intelligence (AI) and machine learning (ML) for personalised services.
The company plans to transition to a public cloud platform for its e-ticketing services, which will improve scalability and efficiency in operations
POWER SECTOR
Motilal Oswal maintains a positive outlook on the power sector. India aims to achieve a renewable energy capacity of 500 GW by 2030.
The Ministry of Power’s draft National Electricity Plan outlines a plan for Rs. 4.75 lakh crore investment in transmission upgrades by 2027. Additionally, there is a target to install 51.5 GW of battery storage by 2030 to ensure uninterrupted power supply.
NHPC Limited
NHPC Limited, a Mini-Ratna Category-I Enterprise of the Government of India, is a hydroelectric power generating company dedicated to the planning, development and implementation of an integrated and efficient network of hydroelectric projects in India.
NHPC aims to become a 23 GW company by 2032, significantly increasing its renewable energy capacity by adding 16 GW over the next decade, and a 50 GW company by 2047 by adding 43 GW of renewable energy in the next 25 years. The company plans to undertake investments of Rs. 800 billion by 2032 and Rs. 3.6 trillion by 2047.
This growth is crucial as India targets 500 GW of non-fossil fuel-based energy by 2030, a commitment made during the COP26 summit.
NHPC has signed agreements to develop 12 stalled hydroelectric projects in Arunachal Pradesh, collectively adding 11,523 MW of capacity.
Additionally, the government is supporting investments in renewable energy through policies that allow up to 100% foreign direct investment (FDI) in the sector.
Further, NHPC is involved in several significant projects, including the 2,880 MW Dibang multipurpose project, which will be the largest hydro project in India upon completion.
The company also plans to develop additional pumped storage capacity, which is vital for balancing supply and demand in renewable energy.
In Friday’s trading session, the shares of one of India’s largest organizations in the field of hydropower development closed at Rs. 106.15 on the BSE.
Written by Shivani Singh
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