Shantanu Deb Mookerjea, Executive Director at LSI Financial Services has identified retail, real estate, banking and infrastructure as four attractive sectors for investment in 2013. While the rise in consumption makes retail a good sector to bet on, the continuing demand for housing by middle class will drive growth in real estate. With India on the path of economic recovery, infrastructure is expected to perform well in 2013. RBI’s likely move to bring down key interest rates will benefit the banking sector, LSI Financial Services has said.
According to Mookerjea organised retail has fuelled high growth in the Indian retail industry for a decade. “While the recent regulatory changes in FDI in the sector are not expected to create any paradigm shift, the general investor mood is already showing signs of an upswing. Add to that, the general economic recovery and the subsequent multiplier effect and increasing discretionary spending flowing through the economy is expected to make the sector an attractive one,” he opines.
LSI Financial Services feels that a direct positive impact of the growing retail sector is manifested in the form of increased demand for commercial real estate. At the same time, as population continues to crowd the urban regions, it is expected that the demand for housing especially amongst the middle class will continue to grow, the brokerage said.
“As such there already exists a demand-supply gap and the government is likely to take steps to facilitate narrowing of the gap. Overall, the real estate sector is expected to fare well, with commercial real estate leading the way,” Mookerjea said.
While acknowledging that the overall sluggishness of the economy has directly impacted credit off take LSI Financial Services said that the numbers for November are encouraging. It is expected that the second half of the calendar year 2013 will witness faster growth and a moderated inflation.
“In such a scenario, it is widely believed that RBI will ensure that key policy rates are brought down to reasonable levels. It would be reasonable to expect higher levels of borrowing activity especially towards the later half of the year which would propel the banking sector,” LSI added.
Within the sector, growth in road, urban infrastructure and housing & Railways are the sub sectors which are expected to witness robust growth. Growth is likely to be propelled both through heightened government initiatives as well as easing borrowers in the later half of the year, Mookerjea concluded.
Via : ET