The world has shrunk, changed, and is now polarized. Either you’re with the western nations or you’re with Russia, China, and North Korea. The side a nation takes will determine the direction its economy takes.
The opportunities are plenty: food (esp wheat) and edible oil exports from Ukraine have almost stopped and the country will take 1-2 years to recover its lost production; metal, minerals, and energy exports from Russia are being shunned by the west; every country wants to increase its defense budgets, become self-reliant, and partner with stable and developing countries that have the brainpower and skilled workforce but are lacking on resources – and are looking for opportunities.
That’s where India comes in – Our country is in a sweet spot and both the warring sides have no option but to woo us (along with other countries in Asia and Africa) to outsource manufacturing and services. This explains the recent visits from ministers from the EU, UK, and USA.
If investors latch on to the right opportunities now, they stand to make mega wealth for the next generation/s. However, they need to persevere through the market volatility.
Make no mistake, the market will twist and turn and a time may come when you feel it is the end of the world and that every stock should be dumped. This would be the time to buy, as you will discover after the event has passed.
Here, in my opinion, are the sectors that can yield unimaginable wealth in the next 2-10 years:
Renewable Energy, Including Batteries
It is now clear that countries who produce oil are intent on blackmailing the importing countries by using tools such as wars, production cuts, protectionism, embargos, etc. The EU and developing countries want to become self-reliant on power and they want it cheap. Aside from the geopolitics, you know that climate change is devastating economies and the sooner we shift to renewables, the better.
Therefore, renewable energy and its storage devices (batteries) are sectors that will prosper in the coming years. This is a secular theme that must be latched on to.
Renewable energy stocks I am bullish on: Orient Green Power, HBL Power, Karma Energy, Century Extrusion (it makes supports for solar panels and EV fittings), MITCON, Reliance Power, and Reliance.
Food and Fertilizer
The world is likely to experience food and fertilizer shortages for at least 1-2 years and so, food, plant nutrition, animal medicine, and fertilizer stocks can experience a solid bull run. Most farmers are individuals and they are not listed, and therefore a good proxy to look for would be export houses that specialize in food exports.
Food and fertilizer stocks I am bullish on for the medium term: Sakuma Exports, Chamanlal Setia, Meghmani Organics, GAEL.
Huge theme with potential disruption coming up (China-Taiwan). Our government has announced a Rs 76,000 cr PLI scheme for semiconductors and has promised to do more. The sector has been neglected in India thus far and has solid potential.
Semiconductor stocks I am bullish on for the long term: HIRECT, RIR.
Waste to Wealth
This sector is another solid play on pollution control/climate change. We’re already witnessing a lot of conversions of waste products to useful products, starting with water, plastics, paper, electronic goods, and more. The moment has caught on and is here to stay for the next decade.
Waste-to-Wealth stocks I am bullish on for the long term: Genus Paper, Satia Paper, Cerebra, Gravita India.
Other themes like exports and manufacturing outsourcing ought to do well going forward. You can easily spot them – just look for companies that are increasing capacities and research into their sectors. You’ll get the answer.
But be ready to withstand volatility. If you cannot, or if you’re a short-term trader, forget about buying anything in this market.