Last Updated on Oct 25, 2022 by Anjali Chourasiya
Every once in a few years, the world embraces innovations and new technologies. Some of these stand the test of time by solving a solution, reducing costs or increasing operational efficiency. Companies engaged in developing and distributing such technologies and innovative products/services from initial stages eventually become future-ready sectors that offer attractive investment opportunities.
In this article, we look at five future industries in India that can make it big. We also look at their growth prospects and certain stocks of these sectors in India.
Table of Contents
Renewable energy sector in India
According to the India Brand Equity Foundation (IBEF), India stands fourth in renewable energy capacity and wind power in the world; and fifth in solar power capacity. We have also maintained the third position in October 2021 on the EY Renewable Energy Country Attractive Index 2021.
What is renewable energy?
Renewable energy is generated using natural resources that can be replenished. Examples are solar, water, and wind, among others.
Future of the renewable sector in India
Renewable energy is one of the lucrative industries in India. As per the Central Electricity Authority, our power requirement is likely to reach 817 GW in 2030. And the aim is to meet 50% of the total energy requirement from renewable energy by 2030. This makes the prospects for the renewable energy sector greener.
List of renewable energy stocks in India
| Name | Market Cap (Rs. in cr.) | Close Price (Rs.) | 5Y CAGR (%) | 1Y Return (%) | Total Debt (Rs. in cr.) | Net Income (Rs. in cr.) |
| Adani Green Energy Ltd | 3,41,160.99 | 2,153.75 | – | 78.93 | 52,832.00 | 489 |
| NHPC Ltd | 42,138.92 | 41.95 | 8.34 | 18.16 | 26,095.95 | 3,523.57 |
| SJVN Ltd | 12,850.43 | 32.7 | -0.89 | 0.46 | 6,906.15 | 989.80 |
| Jaiprakash Power Ventures Ltd | 5,345.69 | 7.8 | -1.58 | 38.05 | 5,050.36 | 107.48 |
| KPI Green Energy Ltd | 1,628.28 | 901.25 | – | 538.27 | 352.30 | 44.61 |
| BF Utilities Ltd | 1,535.70 | 407.7 | 0.12 | -11.58 | 1,526.82 | 50.83 |
| Waaree Renewable Technologies Ltd | 978.29 | 470 | 66.98 | 160.74 | 41.84 | 8.89 |
| Urja Global Ltd | 674.41 | 11.95 | 62.64 | 48.44 | 5.88 | 0.78 |
| Orient Green Power Company Ltd | 649.37 | 8.65 | 0.95 | 78.35 | 1,215.62 | 34.980 |
The data in the above list is as of 19th October 2022. The following filters were used to get the list using Tickertape’s Stock Screener:
- 1Y return
- 1Y return vs Nifty
- Net income (greater than zero)
- Total debt
- Return on investments
Semiconductor sector in India
Semiconductors tiny chips that power electronic devices by managing the flow of electricity in electronic products.
Where are semiconductors used?
These are used in electronic products such as ACs, CPUs, rice cookers, electric vehicles, smartphones, ATMs, and other electronic products.
Future of semiconductors in India
Currently, India meets 100% of its semiconductor needs through imports. MEITY (Ministry of Electronics and Information Technology) has estimated that India’s semiconductor market is expected to grow four times the current market to $63 bn by 2026. Therefore, to reduce our dependence on imports and become a global hub for semiconductors, the government has taken several measures.
Rs. 76,000 cr. has been sanctioned for semiconductor and display manufacturing in the Production-linked Incentive (PLI) scheme. The Semicon India Program has been launched to invite semiconductor companies to build and operate their plants in India, and both global and domestic players have responded positively to this. With all these measures in place, semiconductors can be one of the fast-growing industries.
List of semiconductor stocks in India
| Name | Market Cap (Rs. in cr.) | Close Price (Rs.) | 5Y CAGR (%) | 1Y Return (%) | Total Debt (Rs. in cr.) | Net Income (Rs. in cr.) |
| ASM Technologies Ltd | 652.62 | 551.45 | 59.99 | 117.87 | 50.58 | 14.61 |
| Tata Elxsi Ltd | 44,867.99 | 7,204.65 | 53.38 | 14.02 | 138.50 | 549.66 |
| Dixon Technologies (India) Ltd | 25,492.10 | 4,295.8 | 51.82 | -25.33 | 666.90 | 190.16 |
| SPEL Semiconductor Ltd | 267.01 | 57.9 | 41.29 | 127.95 | 29.93 | -11.84 |
| Ruttonsha International Rectifier Ltd | 173.51 | 249.4 | 40.50 | 166.16 | 29.20 | 2.81 |
| HCL Technologies Ltd | 2,73,225.26 | 1,009.20 | 16.92 | -17.37 | 6,343.00 | 13,499 |
| Surana Telecom and Power Ltd | 151.37 | 11.15 | 15.39 | 6.69 | 25.20 | 7.92 |
| Moschip Technologies Ltd | 1,130.17 | 70.35 | 10.24 | 44.01 | 67.62 | 6.42 |
| MIC Electronics Ltd | 260.19 | 11.75 | 8.12 | 803.84 | 7.88 | 2.97 |
| Vedanta Ltd | 1,03,736.53 | 279.7 | -3.33 | -25.36 | 53,581 | 18,802 |
| Solex Energy Ltd | 254.8 | 318.5 | – | 524.50 | 21.32 | 0.99 |
The data in the above table is as of 19th October 2022.
​Drone industry in India
Commonly called an Unmanned Aerial Vehicle (UAV), a drone is an aircraft that is operated without a pilot onboard. Currently, UAVs are operated remotely by a pilot, but fully independent variants are in the final stages of development.
Where are drones used?
Airborne drones were first utilised for military purposes but now find applications in commercial and recreational areas as well. Advancements in AI, robotics, thermal imaging, and other technologies have made this possible.
The civilian application of drones can be found in sectors including agriculture, power, telecom, infrastructure, mining, healthcare, delivering supplies, and so on. Drones help companies optimise costs and enhance efficiency.
Future of drones in India
Drones are the next big tech disruption that India will see. The government has also liberalised rules to make India a drone hub by 2030. Currently, UAVs are operated remotely by a pilot, but fully independent variants are in the final stages of development. As per IBEF, India’s drones and drone component manufacturing industries have the potential to attract Rs. 5,000 cr. worth of investments. With the budget allocations and liberal policies in place, drones can be one of the fastest-growing industries in India.
List of drone stocks in India
| Name | Market Cap (Rs. in cr.) | Close Price (Rs.) | 5Y CAGR (%) | 1Y Return (%) | Total Debt (Rs. in cr.) | Net Income (Rs. in cr.) |
| Rattanindia Enterprises Ltd | 7,015.01 | 50.75 | 53.26 | 20.54 | 157.67 | 553.87 |
| Solar Industries India Ltd | 35,274.38 | 3,898.15 | 31.40 | 44.51 | 888.00 | 441.28 |
| Info Edge (India) Ltd | 49,691.77 | 3,860.3 | 28.36 | -45.00 | 64.07 | 12,759.56 |
| Zen Technologies Ltd | 1,662.22 | 209.8 | 26.58 | -11.79 | 14.75 | 1.98 |
| Bharat Electronics Ltd | 77,447.10 | 105.95 | 12.98 | 46.38 | 52.7 | 2,398.87 |
| Dcm Shriram Industries Ltd | 716.81 | 82.4 | 4.11 | -31.04 | 566.08 | 66.24 |
| Hindustan Aeronautics Ltd | 82,859.55 | 2,477.95 | – | 67.38 | 49.27 | 5,080.04 |
| Paras Defence and Space Technologies Ltd | 2,532.46 | 649.35 | – | -13.46 | 31.08 | 27.06 |
The data in the above list is as of 19th October 2022.
Artificial Intelligence (AI) sector in India
AI refers to the ability of machines, systems or a robot controlled by a computer to perform tasks that are typically done by humans. AI-enabled machines can improve themselves based on the information they collect.
Where is AI used?
From self-driving cars, smart assistants, and manufacturing robots to healthcare management and automated financial investing, AI is used in many sectors in the economy.
Future of AI in India
India is among the top three talent markets for Artificial Intelligence, accounting for 16% of the global AI talent pool. According to a joint study by Microsoft and the Internet and Mobile Association of India (IAMAI), our artificial intelligence (AI) market is expected to grow at a rate of 20% over the next 5 yrs.
List of AI stocks
| Name | Market Cap (Rs. in cr.) | Close Price (Rs.) | 5Y CAGR (%) | 1Y Return (%) | Net Income (Rs. in cr.) | Total Debt (Rs. in cr.) |
| Tata Elxsi Ltd | 44,867.99 | 7,204.65 | 53.38 | 14.02 | 549.66 | 138.5 |
| Persistent Systems Ltd | 27,402.16 | 3,689.9 | 41.40 | -10.62 | 690.39 | 578.22 |
| Saksoft Ltd | 969.04 | 96.6 | 36.24 | -7.74 | 63.26 | 20.68 |
| Zensar Technologies Ltd | 4,878.19 | 215.5 | 7.50 | -57.11 | 416.30 | 335.3 |
| Cyient Ltd | 8,407.29 | 762.1 | 6.91 | -36.05 | 522.30 | 573.4 |
| Kellton Tech Solutions Ltd | 616.60 | 63.9 | 5.58 | 22.53 | 70.45 | 122.31 |
| Oracle Financial Services Software Ltd | 25,473.35 | 2,949.2 | -3.82 | -37.64 | 1888.83 | 83.39 |
| Bosch Ltd | 46,215.50 | 15,669.65 | -6.33 | -11.26 | 1218.30 | 72.9 |
| Affle (India) Ltd | 15,702.55 | 1,179.1 | – | 2.56 | 213.90 | 148.64 |
| Happiest Minds Technologies Ltd | 14,118.52 | 988.8 | – | -30.13 | 181.20 | 249.75 |
Internet of Things (IoT) sector in India
The Internet of Things is a system of interrelated computing devices, objects, mechanical and digital machines, animals or people given unique identifiers (UIDs). They can transfer data over a network without requiring human-to-computer or human-to-human interaction.
The ‘thing’ in IoT can be a person with a heart monitor implant, an automobile with built-in sensors or any other manmade or natural object that can be given an Internet Protocol (IP) address. Organisations across industries are using IoT to achieve operational efficiency, deliver better customer service, and improve decision-making.
Where is IoT used?
IoT is used in connecting everyday objects like cars, thermostats, kitchen appliances, and other objects to communicate seamlessly.
Future of IoT in India
With 5G connectivity, IoT solutions will find applications in home automation, security, and so on. As per PR Newswire, the IoT industry in India is estimated to grow at a CAGR of 13.2% from 2020 to 2025.
List of IoT stocks in India
| Name | Market Cap (Rs. in cr.) | Close Price (Rs.) | 5Y CAGR (%) | 1Y Return (%) | Net Income (Rs. in cr) |
| Larsen & Toubro Infotech Ltd | 82,642.00 | 4,722.4 | 42.37 | -20.03 | 2,296.80 |
| Honeywell Automation India Ltd | 35,253.05 | 39,872.15 | 20.50 | -9.65 | 339.13 |
| Havells India Ltd | 78,749.91 | 1,257.05 | 18.18 | -13.58 | 1,196.47 |
| Siemens Ltd | 1,00,557.67 | 2,823.7 | 18.14 | 24.61 | 1,090.30 |
| Tech Mahindra Ltd | 99,203.86 | 1,019.4 | 17.33 | -31.10 | 5,566.1 |
| Wipro Ltd | 2,07,631.31 | 379.3 | 11.40 | -46.55 | 12,229.60 |
| Voltas Ltd | 28,950.76 | 874.95 | 10.23 | -34.59 | 504.08 |
| Kellton Tech Solutions Ltd | 616.60 | 63.9 | 5.58 | 22.53 | 70.45 |
| Whirlpool of India Ltd | 20,307.73 | 1,600.65 | 2.63 | -34.29 | 566.37 |
| Bosch Ltd | 46,215.50 | 15,669.65 | -6.33 | -11.26 | 1,218.30 |
| Johnson Controls-Hitachi Air Conditioning India Ltd | 3,714.41 | 1,366.05 | -11.75 | -37.95 | 16.12 |
The data in the above list is as of 19th October 2022.
Conclusion
It is a good idea to watch future-ready sectors and invest in them while they have significant scope to grow. However, companies of such sectors would be in their nascent stages, where there is also scope for capital expenditure, trial and error, and operational inefficiencies. Some of them may also be loss-making and may not have strong fundamentals. So it makes sense to invest in fundamentally strong companies after researching them thoroughly.
Note that the above tables are not sorted in any preferred order but are simply stocks discovered based on the parameters. Past performance is not indicative of future returns. Do not take these as stock recommendations.
Frequently asked questions
Which sector is growing fast in India?
Artificial Intelligence, renewable energy, and the Internet of Things are among new-age sectors that have a bright future in India. Additionally, evergreen sectors such as IT and BFSI also have good scope. Regardless of any sector your choose to invest in, ensure to carry out a fundamental analysis and only invest in qulaity companies for the long term.
What are some AI stocks in India?
Tata Elxsi Ltd, Persistent Systems Ltd, Saksoft Ltd, Zensar Technologies Ltd, and Cyient Ltd are some of the AI stocks in India. You can study these companies on Tickertape by visiting the respective Stock Pages.
What are some of the semiconductor stocks in India?
ASM Technologies Ltd, Tata Elxsi Ltd, Dixon Technologies (India) Ltd, SPEL Semiconductor Ltd, and Ruttonsha International Rectifier Ltd are some of the semiconductor stocks in India. Study the fundamentals of these companies by visiting the respective stock pages on Tickertape.
