Hi,
I’ve been a close observer and participant of the market since the last 4 years. Right in front of us the government made some decisions that brought about structural changes to some sectors and stocks in those sectors of given multi-bagger returns
e.g. Defence - where we started with increasing budget allocations and now our country has a vision of becoming net exporters from net importers
Kusum Scheme - Shakti pumps going from 400 - 3000 (roughly)
Railway
PSU banks
etc
I’d like to learn more and get better. Would love to understand from you all how to read better and how to research better to be able to get a better picture about the upcoming trend!
Your advice is highly appreciated! 
6 Likes
Hi siddarth, I do not know the exact answer, but I’ll tell how I think of it sometimes I look at developed countries and certain industries and how they developed and I just see if there is a company like that in India and it is not possible always but I try to see parallels among them. I would like to give 2 examples : CDSL and CRISIL.
See in USA, the participation of everybody in the capital markets is a lot and only increasing but not decreasing almost 25-30% of an american family’s net worth is exposed to equities directly or indirectly.
In India, which has a heavy bias towards real estate and gold, only 4% of Indian wealth is exposed to equities. As financial literacy increases, and more capital is exposed to equities the capital markets and the companies related to the market will benefit. This is a structural trend I believe and being one of the only 2 depositories, CDSL is bound to have a long runway for growth.
Previously 2 decades back the accountability of listed companies was very low and even today I would say it is not up to the mark. As the financial industry and capital markets mature, ratings companies of India will progress just like S&P and Fitch ratings of USA. Even today many mid cap and small cap companies have dubious ratings companies and these unconsolidated players will lose market share and both the pie of the ratings industry becomes bigger as well as the pie share of the big players will also increase. According to me these are long term structural trends.
This is my personal opinion I would love to hear any other person’s take on this
3 Likes
Dii are biggest investors in the Indian Market. Youngsters are aggressively buying SIP, which inturn enters equity. That is why prices of equities are appreciating far beyond normal levels. Companies like HAL now seems to be overpriced. You can also look at listed Drone companies in India and what they do. Just depending on Govt policy decision for sales is not a good thing.
Industry should have diverse customer base with wide spectrum revenue sources.
Having exports is a good thing. But probe who are the customers. Again, if it is govt of other countries, one cannot bet on policy decisions of any govt. It can change any time.
1 Like
