SECTOR WISE ANALYSIS 2018

PRESENTED BY .
G.RAHUL
( INTERNSHIP ASSIGNMENT)

COGNIZ CAPITAL
 )

PERCENTAGE Banking/Finance 32%

Automotive 15%
OF Technology 13%
Engineering 6%

INVESTMENTS IN Cons NonDurable 6%

Chemicals 6%
Oil & Gas 5%
DIFFERENT SECTORS
Food & Beverage 4%
Manufacturing 3%
BY Cement 3%
Pharmaceuticals 3%
TOP 20 MUTUAL Miscellaneous 2%
Conglomerates
FUNDS(2018) 1%
Tobacco 1%
Retail & Real Estate 0%
(DIVERSIFIED Metals & Mining 0%
EQUITY) Services 0%
100%
 NO OF MUTUAL FUNDS IN EACH SECTOR

NAME NOMF
Banking/Finance 16

Automotive 17

Technology 17

Engineering
S 10

Cons NonDurable 8

Chemicals 7

Oil & Gas 7

Food & Beverage 6

Manufacturing 6

Cement 6

Pharmaceuticals 7

Miscellaneous 4

Conglomerates 3

Tobacco 2

Retail & Real Estate 2

Metals & Mining 1

Services 1
 AUTOMOTIVE SECTOR
REASONS TO INVEST :
 Automobile Industry contributes around 7.1% to India’s GDP by volume
 India poised to be the third largest automotive market in the world by
2020
 Policies such as Automotive Mission Plan (2006-16) and further rollout of
Automotive Mission Plan (2016-26) providing the much required thrust to
the sector

 AUTO INDEX
 India is home to four large auto manufacturing hubs

 6 million-plus hybrid and electric vehicles to be sold annually, by 2020.

 FDI received by the sector between April 2000 and December 2017- USD 18.43
Billion & it is estimated that sector would attract additional USD 8-10 billion in
local and foreign investment by 2023.

 India offers a comparative cost advantage of roughly 10-25 percent in comparison

to that in Europe and Latin America.

 Research & Development (R&D) hub

 Global car majors have been ramping up investments in India to cater to

growing domestic demand.
 Expected production to grow annually by 2026
NAME Expected growth by 2026

Passenger vehicle 9.4 million units

Commercial vehicles 2million units

Two wheelers production 50.6 million units

Three wheelers production 0.95 million units

 100% Foreign Direct investment (FDI) is allowed under the automatic route in
the auto sector, subject to all the applicable regulations and laws
 Banking Sector
 REASONS TO INVEST :
 As per the Reserve Bank of India (RBI), India’s banking sector has
sufficient capital and well-regulated. The financial and economic
conditions in the country are far superior to any other country in the
world.
 The bank recapitalisation plan by Government of India is expected to
push credit growth in the country to 15 per cent and as a result help the
GDP grow by 7 per cent in FY19

 BANK INDEX
 In August 2017, Global rating agency Moody’s announced that its outlook
for the Indian banking system was stable AND upgraded four Indian
banks from Baa3 to Baa2

 The Insolvency and Bankruptcy Code (Amendment) Ordinance, 2017

will strengthen the banking sector
 .
 As compared to PSBs, the private sector banks continued to have strong net
worth coverage to Net NPA with Net NPA to Net worth ratio of 13.03% as on
March 31, 2017 as compared to high 77.52% for PSBs.

 As per CARE Ratings’ estimate, India’s GDP would see growth in the range of
7.5% to 7.8% during FY18. Considering the improvement in GDP growth,
declining pace of NPA addition and capital requirement; CARE Ratings estimates
the credit growth to be in the range of 8% – 10% during FY18.

 On the future expectations of the Banking industry, PwC India said:

“China and India could have a combined share of around 35% of global
banking assets by 2050. India to become the third largest domestic banking sector
by 2050 after China and the US
 Indian IT Industry

 Export revenue of the industry is expected to grow 7-9 per cent year-on-year to
US$ 135-137 billion in FY19
 Indian IT industry has set an inspirational target to touch USD 350 Billion in
revenue by 2025 from the present USD 150+Billion
 Contributed 7-8% to India’s GDP
 India’s IT – BPM industry amounts for 56% of the global outsourcing market
size.
 India is ranked as the 3rd largest tech based start-up hub in the world with over
4200 start-ups in the country.
• IT INDEX
 Companies which can adopt the new technology faster and change their
business model accordingly will be winner for next phase of growth.

 Revenue from digital segment is expected to comprise 38 per cent of the

forecasted US$ 350 billion industry revenue by 2025
 The internet industry in India is likely to double to reach US$ 250 billion by
2020, growing to 7.5 per cent of gross domestic product (GDP). The number of
internet users in India is expected to reach 730 million by 2020, according to a
report by National Association of Software and Services Companies (NASSCOM)
 PHARMA INDUSTRY
•The country’s pharmaceutical industry is expected to expand at a CAGR of 22.
per cent over 2015–20 to reach US$ 55 billion.

• India’s pharmaceutical exports stood at US$ 17.27 billion in 2017-18 and are
expected to reach US$ 20 billion by 2020

PHARMA INDEX
PHARMA INDUSTRY

•Medical tourism to India is on a rise, primarily due to its expertise in cardiac

and orthopedic procedures, in addition to other specialized areas like
neuro-surgeries, cancer treatment and organ transplantation

•Drugs worth USD 130 billion are expected to go off patent between FY17 to
FY22, presenting a huge market opportunity for Indian manufacturers
•The market share of hospitals is expected to increase from 13.1% in 2009 to
• 26% in 2020.

•Over USD 200 Billion is to be spent on medical infrastructure in the next

decade
•India has a market share of almost 42% of Generic drugs produced globally,
a market size of Africa and Middle East put together.
 Chemical Industry
 The Indian Chemical Industry is the 6th largest in the world and 3rd largest in Asia.

 The Chemical Industry in India is expected to reach USD 200 billion by 2020.

 India is also the sixth largest consumer of chemicals in the world.

 Growth Drivers: Innovation, raw material availability, demand growth and low-
cost production.

 India has one of the lowest rates of per hour labour cost among major chemical
producers.

 India’s proximity to the Middle East, the world’s source of petrochemicals

feedstock, enables India to gain advantage from economies of scale.
 Fast Moving Consumer Goods
 FMCG is the 4th largest sector in the Indian economy
 Household and Personal Care is the leading segment, accounting for 50 per cent of
the overall market. Hair care (23 per cent) and Food and Beverages (19 per cent)
comes next in terms of market share
 Retail market in India is estimated to reach US$ 1.1 trillion by 2020 from US$ 672
billion in 2016, with modern trade expected to grow at 20 per cent - 25 per cent
per annum, which is likely to boost revenues of FMCG companies

 FMCG INDEX
 The FMCG sector has grown from US$ 31.6 billion in 2011 to US$ 52.75 billion in
2017-18
 The sector is further expected to grow at a Compound Annual Growth Rate
(CAGR) of 27.86 per cent to reach US$ 103.7 billion by 2020
 FMCG’s urban segment is expected to have a steady revenue growth at 8 per cent
in FY19 and the rural segment is forecasted to contribute 15-16 per cent of total
income in FY19
 Engineering Industry
 The Indian engineering sector is divided into two major segments - heavy
engineering and light engineering. The capital turnover in India is estimated at
US$ 70 billion in 2017 and is expected to grow to US$ 115.17 billion by 2025.

 During FY08–FY18, engineering exports from India registered growth at a CAGR of

8.50 per cent

 Engineering exports include transport equipment, capital goods, other

machinery/equipment and light engineering products such as castings, forgings
and fasteners.

 Electrical equipment industry’s production for FY17 is estimated at US$ 23.64

billion

 Turnover of capital goods industry is expected to increase to US$ 115.17 billion by

2025F.
 India’s engineering R&D market will increase from US$ 28 billion in FY18 to US$
45 billion by 2020F.
 Capacity creation in sectors like infrastructure, power, mining, oil &
gas, refinery, steel, automotive, and consumer durables has been
driving demand in the engineering sector.
 Separately, the approval of significant number of special economic
zones (SEZs) across the country and the development of the Delhi
Mumbai Industrial Corridor (DMIC) across seven states is expected
to further bolster the engineering sector.
 OIL &GAS INDUSTRY

 Oil imports constitute about 81% of India's total domestic oil

consumption in 2015-16.
 Oil and gas contributes about 34.4% to primary energy
consumption in India
 The oil and gas sector is among the six core industries in
India and plays a major role in influencing decision making
for all the other important sections of the economy
 Third largest consumer of crude oil and petroleum products
in the world and second largest refiner in Asia
 Thrust on developing gas based economy by connecting
major cities with green highways, which will have vehicles
running on CNG and LNG with adequate refuelling stations.
 Regasified Liquified Natural Gas (RLNG) regasification facility is likely to increase
from 47.5 MMTPA* by 2022 from a current level of 22 MMTPA.
*million metric tonnes per annum
 Completion of national gas grid by construction of another 15,000 km of gas
pipeline network, which is currently under various stages of implementation.
Several industries are increasing consumption of natural gas in operations.
 Investment opportunities are in upstream, gas pipeline, City Gas Distribution
(CGD) network, LNG Terminal, Petrochemical and Refinery

 OIL AND GAS INDEX

 FOOD & BEVARAGES
 India ranks second in terms of availability of arable land with 127 diverse agro-
climatic zones, having a share of 11.2% of the total arable land in the world

 In addition, the resource-rich country, has the 6th largest food and grocery market
and 5th largest retail market globally.

 The Food Processing Industry has emerged as one of the important segment in
terms of its contribution to Indian economy, as it contributes 9 % and 11% of GDP
in Manufacturing and Agriculture sector respectively.

 India is also globally acknowledged as the leading producer of agriculturally allied

products. It is the world's biggest milk producer . Milk production in India in 2015-
16 stood at 155.5 million tonnes. With a total fish production of 10.07 million
metric tonnes, India makes for around 6.3% of the global fish production.

 World Food India, a mega food event that took place in November 2017, brought
together 75000 business visitors, from 61 countries, It helped India showcase itself
as a preferred investment destination, with MoU’s worth USD 13.56 billion signed
by domestic & foreign investors
 Sector Specific Skill Development Initiatives are also being taken up, with National
Institute of Food Technology, Entrepreneurship and Management (NIFTEM) and
Indian Institute of Food Processing Technology (IIFPT) being recognized as Centers
of Excellence.
 Thus, with such major developments, the market for plant and machinery in the
food processing sector in the year 2024-25 is posed to stand at USD 51.41 billion
.High growth food segments within the Food & Beverage Industry are Breakfast
Cereals, Savory Snacks, Ingredients such as seasonings and dressings and pet food.

MARKET SIZE OF FOOD INDUSTRY IN INDIA(15-20)

 Cement industry
 India - world’s 2nd largest cement market, both in production and consumption.
 Supported by high level of activity going on in real estate and high government
spending on smart cities and urban infrastructure.
 As of FY17, a total of 575 operational cement plants in the country.
 Capacity of 460 MTPA as of December 2017.
 In the next 10 years, India could become the main exporter of clinker and gray
cement to the Middle East, Africa, and other developing nations of the world.
THANK YOU