With increasing financial literacy and the ease of online trading platforms, more retail investors are entering the markets, even with modest capital.
A small sum of money invested every month with discipline, irrespective of market conditions, can go a long way in generating wealth, thanks to the magic of long-term compounding
If you’re looking to begin your investment journey or diversify your existing portfolio, and have ₹10,000 to spare right now, it’s important you choose the right stocks.
With so many listed companies, that’s easier said than done. However, picking market leaders in high-growth sectors can give investors the long-term advantage.
In this article, we will explore some of the market leaders in high-growth sectors in India that deserve a spot on your watch list.
#1 Tata Motors
Tata Motors is a global automobile manufacturer.Part of the illustrious Tata group, it has a diverse portfolio of cars, sports utility vehicles, trucks, buses and defence vehicles.
The company has operations in India, the UK, South Korea, South Africa, China, Brazil, Austria and Slovakia through a strong global network of subsidiaries, associate companies and joint ventures (JVs), including Jaguar Land Rover in the UK and Tata Daewoo in South Korea.
It’s the Indian market leader in electric vehicles (EVs) with a market share upwards of 50%.
The company operates in four business segments – Jaguar Land Rover (71%), commercial vehicles (17%), passenger vehicles (11%), and others (1%).It has 25 manufacturing units across India, China, North America, Europe and the UK.
The company derives 29% of its revenues from India, 15% from the US, 13% from China, 13% from Europe, and 30% from the rest of the world.
It recently launched an EV version of the Harrier and plans to launch the Sierra, along with upgrades to its existing EV lineup, to further strengthen its market share.
It’s also targeting an increase in market share in the PV segment to 18-20% by FY30, from 13.2% in FY25. It aims to achieve a 40% market share in the CV segment, up from 33.5%. It also expects to outpace industry volume growth over FY26-30.
Tata Motors reported marginal 1.3% growth in revenue in FY25. Ebitda growth came in at negative 2.9%. Ebitda margin deteriorated slightly from 13.3% in FY24 to 12.8% in FY25.
Tata Motors is betting big on a strong rebound in the EV segment as volumes fell 13% in FY25. It aims to regain a 50% market share in the coming years.
Shares of Tata Motors have returned negative 29% over the past year on the back of muted operational and financial performance.
#2 Eternal (Zomato)
Incorporated in 2010, Eternal Ltd, formerly known as Zomato Ltd, is a leading online food delivery platform, one half of a duopoly in the space along with Swiggy.
It connects customers with restaurants, allowing them to discover eateries, order food and book tables. Its offerings include food delivery, dining-out services and loyalty programme.
The company has four business segments – food delivery (44% of revenue), quick commerce (23%), B2B business Hyperpure (30%), and dining out (3%).
Beyond food delivery, Zomato provides marketing tools and various services to restaurant partners, enhancing their visibility and customer reach. It also offers Zomato Gold, a subscription-based loyalty programme that offers exclusive discounts and privileges at partner restaurants.
Zomato is aggressively expanding its quick commerce platform Blinkit, with plans to establish 2,000 dark stores by 2026. The company is also investing in AI-driven technology to optimise supply chains and delivery operations, aiming for faster and more efficient service.
In August 2024 the company acquired Paytm’s entertainment ticketing business, including the’Paytm Insider’ and ‘TicketNew’apps, used to discover and purchase tickets for movies, sports, and events, at a cost of ₹2,050 crore.
Eternal reported 67.1% growth in revenue in FY25 on the back of strong growth across segments. Ebitda came in at ₹630 crore with margins improving from 0.4% in FY24 to 3.2% in FY25.
The management is optimistic about profitability improving as stores become more mature and operational efficiencies are realised.
Eternal stock has returned more than 28% over the past year on the back of strong operational performance and the business turning around.
#3 One97 Communications (Paytm)
Incorporated in 2000, One97 Communications Ltd is India’s leading digital ecosystem for consumers and merchants. The company owns and operates India’s leading mobile payments and financial services distribution brand, Paytm.
The company facilitates seamless transactions through Paytm Wallet, UPI and IMPS, allowing users to make payments, transfer money and recharge accounts easily.
It has built the largest payment ecosystem with a registered merchant base of 420 million and 11.2 million payment devices. The company operates in three major business segments – payment services (59% of revenue), financial services (21%) and marketing services (20%).
In October 2024, Paytm received approval from NPCI to onboard new UPI users after being restricted for several months by the RBI. This approval will allow the company to accelerate growth and expand its UPI user base.
Paytm also expanded its global reach, launching UPI payments for Indian travellers in countries such as the UAE, Singapore and France.
The company is focusing on expanding its financial products, including insurance, wealth management, and digital banking services, to become a one stop shop financial platform.
Paytm reported a substantial 30.8% drop in revenue in FY25, and 66.1% in Ebitda. The Ebitda margin also deteriorated significantly from -9.1% in FY24 to -21.8% in FY25.
Management has reiterated its medium term guidance of 30-35% growth in revenue and a 15-20% Ebitda margin.
Shares of the company have returned 117% over the past year with the market believing the worst is over for the company.
#4 Britannia Industries
Britannia Industries is one of India’s leading food companies, with a 100-year legacy and annual revenues in excess of ₹9,000 crore.
The company’s product portfolio includes biscuits, bread, cakes, rusk and dairy products including cheese, beverages, milk and yoghurt.
Britannia is among the most trusted food brands, and manufactures some of India’s favourite brands including Good Day, Tiger, NutriChoice, Milk Bikis and Marie Gold. It’s one of the leading players in biscuits and derives 80% of its revenues from the segment.
Britannia’s network comprises more than 30,000 distributors with more than 2.8 million outlets served across India.
The company derives 5.5% of its revenue from global markets. It exports to 80 countries and has manufacturing units in UAE and Oman.
Britannia reported 5.9% growth in revenue for FY25. Profit-after-tax growth came in flat at 2.4%. Ebitda margin deteriorated from 18.9% in FY24 to 17.8% in FY25.The return on capital was 53%.
The stock is up only 7% over the past year owing to muted operating performance.
Conclusion
Investing ₹10,000 in stocks today may seem challenging as the market continues its rally and valuations get stretched beyond the long term averages.
Many investors are waiting for the market to fall substantially to start investing. But with a little research, investors can still find plenty of good stocks trading at reasonable valuations, even in the current market.
The key is to stay informed, track financials, earnings calls, and the company’s execution.
As always, investing decisions should be guided by individual risk tolerance, financial goals, and proper due diligence. Understand the challenges before diving in head first.
Happy investing!
Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such.
This article is syndicated from Equitymaster.com.