Three Breakout Stocks to Play India’s Growth Machine
One of the major investment themes for 2024 is the global decoupling from China.
The idea is that the supply chain debacles of the COVID-19 years coupled with the autocratic hand of President Xi and the ongoing tech feud with the U.S. means that global multinationals are looking for new places to do business.
Places like Thailand, Vietnam, Indonesia, and Mexico have benefited from this factory diaspora.
And perhaps the biggest winner is India.
India has many positives. They have a middle class that includes roughly 300 million people. They also have the rare benefit of a growing working-age population. In terms of population pyramid India has it going on. Half of Indians are under the age of 25. By 2030 one-fifth of the working-age people in the world, those between 18 and 64, will be Indian.
Furthermore, India’s stock market just surpassed Hong Kong as the fourth largest in the world and the latest GDP growth number came in at 7.3%.
The economy is booming with strong government and consumer spending as well as a robust service sector. This is despite the central bank hiking interest rates six times since 2022 to slow inflation.
The government of Prime Minister Modi is pro-business and has ramped up its spending on infrastructure. Furthermore, foreign businesses are dumping more cash into the country to build factories, especially in tech.
Major international banks such as Barclays Plc and Citigroup Inc., have raised their full-year projections on India.
The Subcontinent Strikes Back
If you are a believer in the India story you might be looking for investments to increase the value of your trading accounts. I haven’t done full due diligence on these stocks but having a nice chart is a good place to start.
Here are three Indian stocks that are breaking out:
The company makes and sells technology-based polymer and composite products in India and internationally. It’s kinda like the Rubbermaid of India. They also make products for industry such as barrels and bins. As the consumer moves up he will buy more stuff.
Time Technoplast has a price-to-earnings ratio of 20, and grew earnings by 49% last quarter.
Torrent Power Limited, is an electric company. The company owns thermal power plants with a generation capacity of 3,092 megawatts; and renewable power plants with a generation capacity of 1,804 megawatts.
They have a price-to-earnings growth of 36 and a quarterly revenue growth of -47%.
Triveni Turbine Limited, together with its subsidiaries, engages in the manufacture and supply of power-generating equipment in India. The company offers back-pressure and condensing steam turbines for a range of pressure and flow applications; American Petroleum Institute (API) compliant steam turbines; and sustainable modularly arranged pressure-reducing turbines, as well as spare parts.
They have a price-to-earnings ratio of 69 and a quarterly revenue growth of 32.5%.
All the best,
Christian DeHaemer
Senior Investment Analyst,
Outsider Club
