With the world at a standstill and the pandemic bringing the economies of several countries crumbling down, you may ask yourself, “What Now?”, “What Next?” With the world battling these desperate times, our financial markets do give us hope about the future for investors to look into.
What would be the financial condition of the markets for the next decade? Are we prepared? And if so, what would be the upcoming trends that will change how the world works in 2030!?
We at smallcase sat down with a few of our managers to get a long-term perspective of the financial market and its role to play in the next 10 years.
With this perspective of the future, Mr Dick Hosy Mody from Ethical Advisers shared his thoughts with us,
“Ever since I began my investment journey in 1992, markets have taught me to “stay focused on the ‘BIG Picture!” and 2021 is no different. Considering this, out of 195 countries in the world, India is expected to be in the top 3 (behind US and China) by 2030. Biggest BULL RUNS have occurred when GDP moves towards $5 Trillion, e.g. China, US, and Japan.
The Dependables! smallcase by Ethical Advisers
India’s GDP has just crossed $3 trillion, and the aim is $ 5 trillion in the next 3 years. THIS IS THE GOLDEN period. STAY Invested in the best businesses run by shareholder-friendly management with high capital efficiency for Wealth Creation” -Dick Mody, Ethical Advisers
One of the major trends that are up and rising is the ‘Renewable Energy’ industry. We got the chance to sit down with Arvind from Niveshaay for valuable insights on Renewable Energy.
“Renewable electricity is increasingly cheaper than any new power capacity based on fossil fuels, according to a report by the International Renewable Energy Agency (IRENA). Renewable energy has become competitive – and one often overlooked reason is the reduced cost of financing.
The Bloomberg report shows that solar and wind will increase their combined share of global generation capacity to 16% from 3% by 2030.According to a new report by Bloomberg New Energy Finance, by 2030, renewable energy sources will account for over 60% of the 5,579 gigawatts of new generation capacity and 65% of the $7.7 trillion in power investment.
Green Energy Portfolio smallcase by Niveshaay
Renewable Energy space and innovation will play a major role in the transformation of India as a country by the year 2030” Arvind Kothari, Niveshaay.With the advent of the digital transformation, technology has been changing our lives over the years for the better. Digital transformation has changed how the world carries and spends their money.
Digital transactions have become so easy that it can be done in the touch of a button. We spoke to Ashwini from Omniscience Capital to garner their views on the subject. “Digital adoption in payments has been growing at a rapid pace and the pandemic has only bolstered this trend. As per RBI data, Retail payment such as UPI, IMPS and NACH registered nearly 100% growth in transaction value and volume in the last one year. Interestingly, India continues to remain globally at the top with the highest number of digital transactions. By 2025, digital payments are expected to account for more than 70% of transactions. However, the growth outlook for the next decade till 2030 shall depend on various factors including few structural imperatives that will support this trend,” he said.
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Cloud computing has remained a key enabler for digital payments. Most of the new entrants, be it payment apps or mobile wallets, have operated completely on the cloud. Indian IT Services companies such as Wipro and TCS which are part of the Omni DX portfolio are in the ‘Leaders’ quadrant in the Gartner’s 2020 cloud infrastructure services and will continue to help digital payments firms in designing and implementing their cloud strategies.
The other high growth vector for digital payments is going to be the adoption of Blockchain technology and improvements in cybersecurity. The decentralized blockchain systems are resistant to cyber-attacks and data thefts. The recent formation of IBBIC (Indian Banks’ Blockchain Infrastructure Co.) owned by 15 banks is on the lines of NPCI. IBBIC will use Blockchain for LC, GST Invoice and e-way bills transactions. The system will be based on Infosys Finacle Connect, a blockchain-based platform.” Ashwini Shami, Omniscience Capital.
Last but never least, technology has not just been making waves in the digital payment space but has also focused itself on the Healthcare Industry, saving lives in the process.
We talked to Anubhav from Prescient Capital for more clarity. “We believe diagnostics and contract research and manufacturing services (CRAMS) are two areas in pharma and healthcare where Indian companies will witness substantial growth by 2030.
The healthcare diagnostics market in India is quite fragmented with diagnostic chains having only 15-16% market share. Even within that, national diagnostics chains like Metropolis, Dr. Lal, Thyrocre, etc have only 6-7% share of the total market.
The overall diagnostics market will witness 10%+ CAGR over next several years driven by increasing per capita income, focus on preventive check-ups, etc.
The large organised chains will grow faster than the industry as they gain market share from smaller chains and standalone labs on the back of better protocols & certifications like NABL and also helped by how they have been able to ramp up Covid-19 testing.
We believe the Covid-19 pandemic further boosted the importance of quality diagnostics and with emphasis on providing quality services and compliance, the organised players will benefit from such developments and gain market share.
Market share gains will also be driven by national chains acquiring standalone labs and regional chains leading to significant consolidation in this industry as it has played out in western markets like the US.
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High Quality Companies smallcase by Prescient Capital
In the area of CRAMS, we believe that leading Indian CRAMS companies like Syngene, Divis, Suven, etc will continue to grow fast and take away market share from European players like Lonza, Catalent, etc. This will be driven by their strong chemistry skills, process innovation and research capabilities while offering services at a lower cost to their European counterparts. We are quite bullish about prospects of the India pharma and healthcare diagnostics sectors and have a healthy allocation to these in our smallcase ‘High Quality Companies’ as we believe these sectors will enjoy several years of secular growth.” Anubhav Mukherjee, Prescient Capital
It is quite evident that there are multiple facets to the face of development and growth that will transform India and the World itself in the next decade. Investors have to look out for these sectors such as ‘Renewable Energy’, ‘Healthcare and Pharmaceuticals’ and ‘Digital Transformation’ which could massively impact the face of the world and our living conditions for the better.
(This is a partnered post)
Disclaimer: The views and investment tips expressed by the expert on Moneycontrol.com are his own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
