 India in 2006
The fundamental question this year would be how is India Inc going to do this year. Positive, growth-oriented, symbolically, green light.
Relationship with Pakistan - there will be no war. As usual diplomatic speeches, plus there will be border tensions and infiltration of terrorists, mass death due to the attacks. On the positive side, more road links, other forms of diplomacy and increase in trade, bilateral and cooperation. At the diplomacy-level, it will be a positive trend with Pakistan.
The stability of UPA
government- The UPA government will survive. At the most, some kind of ministerial shake-ups will be there. Till September there will not be even major problems with the Left. Once Saturn moves into Simha, there can some problems in and around September 2006, more towards the year-end.
The Opposition BJP will be taken over by the younger face but the transition will not be very smooth and there will be more disarray than unity.
The rains
Most parts of India will see enough of rains. There can be extremes in climate in some region. It will be one of the best seasons for crops. Agricultural output will be positive and touch new records. In the south also the Monsoon will be good.
Stock markets-
The economy will do well. More than 8 % GDP growth will be reached. The market can even touch 11,000 before the year-end. Most of the time the market will hover around well over the 7000 mark.
The value of the rupee
Rupee will continue to be moderately strong in the range of 43-45 most of the time.
Gold prices will come down and then again it will peak up.
Prices of essential commodities will have marginal inflation. As such food products will show a slight price increase. Interest rate will go up in India in a marginal way. FED will hike the interest rates.
Foreign reserves in India will increase, be positive and the government will ease up restrictions in a positive manner for foreign currencies regulations.
Sectors:-
Automobile- All leading players will do well. Two-wheelers will penetrate the lower segment. The major two-wheeler makers will laugh all the way to the bank. All the major companies will register higher growth.
Auto ancillaries will continue to do very well. Shares and quarterly profit will touch all-time high in these sectors. Tyres will have only very marginal growth and it can even dip further in the bourses.
Cars- Many Indians will be first-time car owners. There will be a boom in the car market which will be dealt with as a separate story. High-end cars will show slow growth. Ford cars in Maraimalainagar will need to do some vastu alterations to make its place profitable. As far as the four-wheeler segment is concerned, Maruti will still hold the sway. The other companies in the lower-end and beginning segment of the market will also do well. The high-end segment car will register ordinary growth only.
Pharma- It will be a good story but not a boom story. Most of them will have a positive year. Ranbaxy, which has had major setbacks, will slowly bounce back. Indian companies will continue to export in a major way.
Banks- There will be increase computerisation in banks, new models of revenues and new products will work out. Many banks will aggressively position themselves on an end-to-end solution. Most of the banks will be in blue or brown whichever is the colour of profit.
PSU- The same story of the Left blocking the moves of the government which wants to sell the stake to the market will be there. Some flexibility in going public will be there for some companies. As such, no major changes.
Oil- Markets will bleed. There will be increase in prices with the government taking a tougher stand. It can even touch $ 70 per barrel and then it will come down. If you have long-term perspective, then this sector is ok. If it is yearly, then do not enter the segment or play bearish.
Infrastructure- Cement, steel, etc., will do well. Heavy and infrastructure engineering will continue to see a boom. Of course, steel will be sluggish on and off. Overall more than average growth.
Retail- The Indian boom story. You will see all the sub towns having malls and all the big towns having hyper marts, new formats and design in retail will emerge across the metropolis. If you are not interested in IT as a career, then this can be a huge story of boom and success. Many small retailers will try to expand in a big way and already existing players will enter new B and C class towns.
Tourism - All tourist destinations will see increase and record occupancy in hotels. More chains of hotels will come and there will be more revenues. More foreign travellers will visit exotic locations and theme locations.
IT- There will be big news from the Big Five. Infosys might do something interesting like ADR issue, etc.
BPO- Mark my words, the boom will continue. There will be big recruitment. First it was IT, now it will be BPO followed by retail. In any case, KPO, IPO will all do well and market will further become segmented. Specialisation will be flavour of the year.
Internet users will increase and the money in shopping will increase. Other than a few sites, most of them will bleed.
Chemicals and
fertilisers- Call it the rural boom. This sector will have better growth with Mars in the second house of varasha pravesh chart.
Textiles- The Chinese will beat in terms of volume. We will still have the niche areas. More malls and classy outfits will sell. Specialised format stores will increase. It will be average growth in textiles but no boom like the IT. Some good orders will be there and overall the performance will be average.
Hotels and eating out joints will continue to have a boom. Old chains of hotels will make money and new chains will do better. The pizza market will consolidate. There will be new exotic food locations, with themes, which will open in many towns and metropolis.
FMCG- is the sector of growth. New products, new covers and price wars will be common. Food makers and FMCG for packaged food will see some exceptional growth.
Advertisement- Become an ad man and become rich will be the story. It will be a boom time in the sector.
Spirituality- People will become more religious. New gurus and some old gurus getting into controversy will be common.
Air travel - Huge story of boom and merger. The number of people opting for air travel will be very high.
Media and
television- 5- 6 new channels will be launched. Old channels can launch specialised channels. Television will dominate in profit rather than cinema. Cinema will see high-end intellectual movies and not run-of-the-mill stories. With Tamil industry going through a revival, it will be a maximum of 10 movies hitting big time. Promotions and advertisements for the movies will be excellent.
Packaging will see a new level of prosperity so will plastic makers in the car segment.
Telecom New record level in subscriber growth, newer models of revenues and intense competition will be there. The markets will start hitting the mass segments more and more.
Housing - Boom in high-end market. Overall the market will be positive. The middle-class obsession for buying a house will continue.
Sports Indian sports will be better. New areas like chess, shooting and tennis will dominate the headlines. Cricket under the new captaincy will be good. Other sports will also do well.
K
B Gopalakrishnan
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