The flow of retail investors into Indian equity markets in the pandemic has been unprecedented as the number of new demat accounts opened in FY21 surpassed 14 million. 

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Meanwhile, on Friday, the last trading day of this week, Sensex created a history by scaling landmark 60,000-mount for the first time ever, while Nifty also inched closer to attempting 18,000 level as it surged nearly 75 points or 0.42 per cent to 17897.5 levels on Friday.  

The Sensex rallied 26 per cent, while Nifty 28 % this year so far. Investor’s wealth grew by over Rs 75 lakh cr so far in 2021. The average market capitalization of the BSE-listed companies rose from Rs 188 lakh cr as on December 31 to Rs 263 lakh cr on September 24, 2021 (intraday). 

Pharma, and IT/Technology sector led from the front closely followed by telecom. But, to lead the next leg of the rally, analysts advise investors to look at new age themes which will produce the next set of wealth creators.   

During the COVID 19, companies across the globe are focussing on accelerating digital transformation initiatives to secure their businesses. According to NASSCOM, cloud adoption by organizations rose by 80 per cent in FY21.   

Themes that will be in focus from a future perspective is Saas, AI, 5G, and EV from the auto/auto component space, suggest experts.     

“We are witnessing a rapid evolvement in traditional technology services and we believe the future growth in the technology sector will be led by next-generation digital technologies such as AI, 5G, Cloud-based SaaS, blockchain, robotics etc.,” Mohit Nigam, Head - PMS, Hem Securities, said.   

“Electrification is the biggest emerging trend in the automobile industry. According to a report by Ricardo, Battery Electric Vehicles (BEV) has been the fastest-growing, at a CAGR of approximately 46% between CY 2015 to 2020 and is expected to experience increased market penetration growing at a CAGR of approximately 36% between CY 2020 to 2025,” he said.

  

COVID likely to boost Demand:   

The outbreak of COVID proved to be a boon to many sectors and helped companies increase productivity at a time when most of the employees were working from home. Technology evolution played a big role that helped India Inc. to display earnings growth. 

“We can say that these sectors are emerging and game-changers for the world. The evolution of the internet from 2G to 5G by telecom operators such as Bharti Airtel in 10 years is a classic example of this, as is the demand for high-speed internet all over the world,” Gaurav Garg, Head of Research at CapitalVia Global Research, said.

“In recent times, Zomato, a completely new business model, has piqued the interest of investors. Climate change is a top priority for the world leaders which is expected to boon for electric vehicles (EV) manufacturing companies, and demand for EVs may be higher than expected in the long run,” he said.

“When it comes to 5G and digital, which are playing important roles in transforming India into a digital nation, they will be in high demand. Bharti Airtel, which is currently conducting 5G trails, TATA Motors and Maruti Suzuki which had introduced EV were already part of the Nifty50,” added Garg. 

We have collated a list of stocks in focus from various experts on sectors that could well turn wealth creators of future: 

Expert: Manoj Dalmia, Founder and Director, Proficient equities Private limited

Each stock will be a monopoly. There are only a few stocks listed in these sectors. It is a global necessity now. 

Stocks to watch out in this space

Banking: Federal Bank (blockchain)

5G - Bharti Airtel

AI and service-Subex, Alphalogic, MindTree

EV - TATA Motors, TATA Elxsi, Motherson Sumi

SAAS: Kelton Tech 

Expert: Gaurav Garg, Head of Research at CapitalVia Global Research

The demand for these sectors may skyrocket in the next 5 to 10 years, which may become a wealth creator and multi baggers; however, due to the rapid change in demand, new-age companies may outperform old-age companies.
  
AI: Tata Elxsi, Happiest Minds 

5G: Bharti Airtel, Indus Towers and RIL are few companies which investor may focus. 

EV: Maruti Suzuki, Tata Motors, Exide, Minda Industries are the few companies which may benefit from EV sector. 

Aside from the stocks mentioned above, India is becoming a hub for the SaaS and digital markets. By 2030, Indian SaaS companies alone could be worth $1 trillion, creating jobs for more than half a million people. 

Currently, India has eight unicorn startups focusing on SaaS. And a few of these start-ups are already in the process of raising capital through an IPO, which may attract investors in the near future.

Expert: Mohit Nigam, Head - PMS, Hem Securities

Some of our picks for the above-mentioned sector:

AI / 5G / SaaS: Tata Consultancy Services, Happiest Minds, Mastek, Tech Mahindra 

EV: Sona BLW, Tata Motors, Greaves Cotton, Tata Power (EV Charging Solutions)

We believe that future growth in the above-mentioned sectors is enormous and the stocks in these sectors could turn out be wealth creators.
  
But, one needs to be selective when picking the stocks in these sectors, we should deeply understand company’s business, products and their future plans before investing in this sector.

(Disclaimer: The views/suggestions/advice expressed here in this article are solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)