Current Industry Trends for major Industries:

In this article we will discuss the current Industry trend for major sector is as listed below. By understanding where the market is headed, we can make more informed decisions and help achieve organizational/individual's objectives. Whether you want to expand rapidly and are in search to buy a business or want to cash out and sell a business  to pursue other opportunities, we at Kapso Business Services, India’s Leading Business Brokers will help you make the right decisions and guide you through the process.

 

Automobiles:

  • The automotive manufacturing industry comprises the production of commercial vehicles, passenger cars, and three & two-wheelers.

  • Two-wheelers are by far the most popular form of vehicle in India, taking an 80% share in 2015-16.

  • 25 million automobiles produced in FY17.

  • Total production volume grew at a CAGR of 5.56 per cent between FY12-17.

  • Two-wheelers and passenger vehicles dominate Indian auto market .

  • Two-wheelers and passenger cars accounted for 78 per cent and 15 per cent of production volume in FY17 respectively.

  • Domestic passenger car sales dominated by small and mid-size cars.

  • Over 67 per cent of export volumes comprised of two-wheelers, followed by 22 per cent for passenger cars

 

 

Power:

  • For the 12th Five-Year Plan, a total of 88.5 GW of power capacity addition is targeted; of which, 72.3 GW constitutes thermal power, 10.8GW hydro power & 5.3 GW nuclear power

  • In January 2017, the 2nd unit of Kundankulam Nuclear Power Project, attained a capacity of 1000Mwe & this is anticipated to strengthen the overall power generation capacity in India.

  • In February 2017, a 40-killowatt solar power plant was inaugurated at Don Bosco Higher Secondary School in Johrat City, Assam.

  • In May 2017, the government approved the raising of bonds worth US$351.03 million for renewable energy through the Indian Renewable Energy Development Agency (IREDA).

  • As of June 2017, total thermal installed capacity in the country stood at 220.58 GW, while hydro & renewable energy installed capacity totalled to 44.61 GW & 58.3 GW, respectively.

  • With electricity production of 1,160.1 BU in India in FY17, the country witnessed growth of around 4.72 per cent over the previous fiscal year.

  • Over FY10–FY17, electricity production in India grew at a CAGR of 7.03 per cent.

  • The 12th Five Year Plan projects that, total domestic energy production would reach 844 million tonnes of oil equivalent (MTOE) by 2021–22.

 

FMCG:

  • Rise in rural consumption to drive the FMCG market.

  • The rural FMCG market in India is expected to grow at a CAGR of 14.6 per cent, and reach US$ 220 billion by 2025 from US$ 29.4 billion in 2016.

  • Favourable demographics and rise in income level to boost FMCG market.

  • FMCG market in India is expected to grow at a CAGR of 20.6 per cent and is expected to reach US$ 103.7 billion by 2020 from US$ 49 billion in 2016.

IT and ITeS:

 

  • IT BPM industry revenues (excluding hardware) is estimated at around US$ 130 billion in FY 2015-16 and is estimated to be at US$ 154 billion in FY 2016-17.

  • The contribution of the IT sector to India’s GDP stood at 7.7 per cent in 2016.

  • TCS is the market leader, accounting for about 10.4 per cent of India’s total IT & ITeS sector revenue in FY16

  • The top 5 IT firms contribute over 25 per cent to the total industry revenue, indicating the market is fairly competitive.

  • The domestic revenue of the IT industry is estimated at US$ 38 billion and export revenue is estimated at US$ 117 billion in FY17.

 

 

Oil and Gas:

 

  • Oil consumption has expanded at a CAGR of 3.3 per cent during FY2008–16F to reach 4.0 mbpd by 2016.

  • Due to the expected strong growth in demand, India’s dependency on oil imports is likely to increase further

  • Rapid economic growth is leading to greater outputs, which in turn is increasing the demand of oil for production and transportation

  • With rising income levels, demand for automobile is estimated to increase, in turn leading to augmented demand for oil and gas.

 

  • In FY16, total crude oil imports were valued at US$ 64.4 billion as compared to US$ 112.7 billion in FY15. In FY14, imports accounted for more than 80 per cent of the country’s total oil demand.

  • Backed by new oil fields, domestic oil output is anticipated to grow to 1.0 mbpd by FY16.

  • In March 2017, the Indian Strategic Petroleum Reserve Ltd (ISPRL) and Abu Dhabi National Oil Company (ADNOC) of UAE signed an agreement, to fill up 0.81 MMT or 5,860,000 million barrels of crude oil at ISPRL storage facility at Mangalore, Karnataka.

  • According to the Organisation of the Petroleum Exporting Countries (OPEC), the demand for oil across the world will grow by 1.26 million barrels per day (mb/d).

Telecommunications:

 

  • India is currently the 2nd largest telecommunication market and has the 3rd highest number of internet users in the world

  • India’s telephone subscriber base expanded at a CAGR of 19.16 per cent, reaching 1188.5 million during FY07–1

  • Tele-density (defined as the number of telephone connections for every 100 individuals) in India, increased from 17.9 in FY07 to 92.59 in FY171

  • The mobile segment’s teledensity surged from 14.6 per cent in FY07 to 90.70 per cent in FY171

  • GSM services continue to dominate the wireless market with a 98.66 per cent share (as of December 2016); while CDMA services accounted for the remaining 1.34 per cent share.

 

Real-Estate:

 

  • Scenario: Few large developers with a pan-India presence dominate the market, operating model has shifted from sales to a lease & maintenance

Key Drivers: Rapid growth in services sectors: IT/ITeS, BFSI & Telecom, Rising demand from MNCs, Demand for office space in Tier 2 cities

Notable Trends: Mumbai, NCR & Bengaluru account for 60 per cent of total office space demand in India as of 2017, the office space absorption in 2016 across the top eight cities amounted to 34 million square feet (msf) with Bengaluru recording the highest net absorption during the year, business activity shifting from CBDs to SBDs, Tier 1 to Tier 2 cities

 

  • Scenario: NCR & Mumbai are by far the biggest hospitality markets in India, followed by Bengaluru, Hyderabad & Chennai, besides hotels, the hospitality market comprises serviced apartments & convention centres

Key Drivers: A robust domestic tourism industry, the increasingly global nature of Indian businesses boosting business travel,tax incentives for hotels & higher FSI, expansion of physical infrastructure during the 12th Five Year Plan

Notable trends: Serviced apartments appear particularly attractive within the hospitality space, government initiatives to promote tourism in Tier 2 & Tier 3 cities is generating significant demand for hotels in such cities, especially for budget hotels

 

 

Pharma:

 

  • The pharmaceutical industry in India ranks 3rd in the world terms of volume and 14th in terms of value. According to Department of Pharmaceuticals, Ministry of Chemicals and Fertilizers, the total turnover of India's pharmaceuticals industry between 2008 and September 2009 was US$21.04 billion. The domestic market was worth US$13.8 billion in 2013.

  • Indian pharma industry is mainly operated as well as controlled by dominant foreign companies having subsidiaries in India due to availability of cheap labor in India at low cost.

  • India’s pharmaceutical exports stood at US$ 16.8 billion in 2016-17 and are expected to grow by 30 per cent over the next three years to reach US$ 20 billion by 2020, according to the Pharmaceuticals Export Promotion Council of India.

  • India spends only 4.6-5 % of its total gross domestic product (GDP) on healthcare and hence, ranks amongst the lowest, globally. In contrast, developed countries spend about 14-17% of their GDP on healthcare.

 

Banking and Financial services:

 

  • This sector comprises of Banks, insurance companies, non banking financial companies, pension funds, mutual funds, and in recent times there is new entity came up i.e. payment bank. This was to boost the the digital economy.

  • Currently Asset management industry is the fastest growing industry and also the mutual fund saw huge increase of 44% in terms of money infusion.

  • Although banking industry is suffering from a huge problem of NPA`s and bad debt but the government is taking pro active steps to boost these sectors like a recapitalization of Rs. 80,000 crore and steps towards digital transaction.

  • The mobile wallet industry is expected to grow at a CAGR of 150%.