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As many predicted, 2023 was an extraordinary year for the Indian market, marked by the launch and high performance of significant projects in various sectors of the economy. This remarkable year has seen a rally in mid-and small-cap stocks, and a historic number of IPOs. Overall, the Nifty 50 gained 18.30% and the S&P BSE Sensex gained 17.22%, in the current year so far.

OmniScience Capital, a registered Investment Adviser with SEBI and smallcase manager, has utilised its rigorous investment assessment framework to provide a detailed market outlook for the year 2024. This report comes at a vital time for investors looking to gain some valuable insights regarding the macro economic environment and capital markets of India in the coming years. It does so by analyzing on-going projects within different economic sectors.

The highlights include some of the most impactful projects that are currently under way in vital sectors of the Indian economy, in addition to quantifying the opportunities that they create in the markets.

A snapshot of various sectors of the Indian economy:

1)      Banking and Finance:

There exists a phenomenal 100 Lakh Crore opportunity in Banking in India. This opportunity is catalyzed by spending in fintech and payments, rating agencies, enhancing digital banking, exchange systems, HFCs and NBCs. The opportunity includes several sub growth vectors, providing stability and promise in this avenue for investors.

2)      Digital Transformation:

The nation’s drive towards complete digital transformation is in full swing and is expected to carry the momentum forwards in the next several years. Total expenditure is predicted to be divided among AI ($15 Trillion), Cloud infrastructure ($1 Trillion), 5G infrastructure ($13 Trillion), development of Metaverse ($5 Trillion), Internet Of Things ($19 Trillion) and Blockchain ($3 Trillion). All in all, digital transformation investment will be creating a 100 Trillion Dollar impact through technology development projects worth more than a Trillion dollars.

3)      Power and Energy:

Power consumption is expected to reach 4 Trillion unites by the year 2030 at 13% CAGR. The Total Addressable Market (TAM) in Power is estimated to be a whopping 24 Lakh crores, thus being one of the major drivers of India’s current growth. Avenues for investment include clean energy, generation and transmission, solar/hydro, resource and equipment manufacturing, and trading & exchange. The diverse and ambitious projects have created an opportunity of a 24 Lakh Crore CAPEX push. The volume growth is expected to be in the double digits in the coming year based on our analysis.

4)      Railway Infrastructure:

India plans to ramp up its railway infrastructure development to a new level in the coming years with various projects including Purchase of 8 High Speed Bullet Trains, the redevelopment of more than 1300 Railway Stations. The plan also expects to invest in 400 Vande Bharat Trains and 3000 new passenger trains in the next 5 years. Lastly, there will be progress in an ambitious Dedicated Freight Corridor of India targeting 45% of all freight in the country.

These projects have created a total sector CAPEX opportunity of 50 Lakh Crore in Railways thanks to a massive Total Addressable Market predicted to be 50 Lakh crores.

5)      Defence Sector Spending:

The Indian defence sector has spent a whopping $81 Billion Dollars in the year 2023, the 4^th highest spending in the world. Defence exports touched a CAGR of 20% to 84 countries. The expenditures range from purchase of submarines and torpedos, aircraft carriers, fighter jets, missiles, 2 defence corridors, 150 defence systems and radar systems, with 70% domestic procurement. The opportunity presented is estimated to be a turnover of 1.75 Lakh crores by 2025 at a CAGR of 15%.

6)      Clean Energy for Mobility:

India is aspiring to control 30% of the global market share in clean mobility by the year 2030. In order to meet this goal, there would have to be Investments worth Rs. 30 Lakh Crore. Of these, 8 lakh crores are anticipated to be invested in green hydrogen, most likely the future of car fuel. In addition, the various avenues of investment include 2/3W Passenger Commercial EVs, New Battery Technology, development of charging infrastructure, and power storage technology.

Key events in 2024 -> impact they could cause in the financial environment of the country:

*  Fed Rate cut between 0.75% to 2% à May cause risk to trade thanks to a large flow of FII into Indian equities.)

* 1.5% to 2.5% Rate cut by RBI à Could drive large economic growth and to the large DII inflows.

* Elections in India 2024 à Large fiscal and monetary allocations

* Election in the USA 2024 à Will lead to favourable monetary and fiscal policies.

Based on the above effects, OmniScience advisors conclude that the external events happening in the year 2024 would not cause a significant impact to the optimism created in the markets of India due to the strong drivers in the various sectors of the economy as highlighted in this article.

Growth Vectors for 2024:

OmniScience Capital is a pioneer in investment research and has a proven track record of successful investment baskets in the last year. Based on our developed frameworks, we have picked out certain avenues of investment that we are counting to be the growth vectors for 2024. There are:  Omni Fintech smallcase, Digital Banking and Payments smallcase; Omni AI Tech Global smallcase, Omni Future of Mobility smallcase, Omni Power smallcase, Omni Banking on Growth smallcase, and Omni Super Global smallcase.

The data and findings presented in this report undoubtedly paint an optimistic economic future for the country in the next several years, and thus indicating a strong 2024 for investors. With so much coming into the markets of vital economic sectors, there is a strong consensus among various investment analysts that 2024 will be a robust and promising year for investors across the industries in India.

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