19 Best Sectors to Invest in The Market

The 19 best sectors for any Indian retail investor to invest in the market from one of the best fund managers in the world – Peter Lynch

Peter Lynch’s One Up on Wall Street has shared the best way to invest in the market. I follow the same process for my investment ideas.

Today, I will share sectors in that every Indian retail investor has an edge investing in them over an experienced fund manager.

The main idea of investing like Peter Lynch is to take cues from Main Street and not Wall Street or Dalaal street in India.

So what does it mean when he says “taking cues from the main street”?

It simply means you should invest in companies where you are a consumer or know something that people in Dalaal street don’t know.

So let’s look at these different sectors where you are indeed a consumer somehow or the other. The stocks mentioned are not recommendations but to understand the industry. You can choose other stocks within the same sector as well.

Daily Essentials – HUL / Colgate / Dabur

I am sure you use a lot of daily essentials like Hair oil, Shampoo, Soap, Toothpaste etc.

Do you know which company makes them?

If not, it is better to look at the company’s name that makes them and then see if it passes your investment checklist. If it does, you can consider it for fundamental and business analysis.

Maggi / Cerelac – Nestle

If you are an Indian, you know the brand “Maggi”.

Even if you are one of those who doesn’t like eating Maggi out of the box, there are times when you enjoy some of the Maggi recipes.

So do you know the Brand Maggi is owned by Nestle India, a listed company that one can invest in?

Fashion – ABFL / Page Industries

We all buy clothes but do you wonder which companies you prefer more?

I always prefer Jockey for innerwear, so I know how good the company is doing when it comes to comfort. But unfortunately, no fund manager can have the same edge.

Similarly, check out the listed company and consider it for investment in your preferred brands.

Shoes – Bata / Relaxo

Which companies shoes or chappals do you prefer?

Ask your better half (Husband or Wife) what shoes he or she prefers?

I am damn sure there will be a few choices in each category like Sports shoes, parties, and Formals. So see if there are companies in the listed space and consider investing in them.

Cars – Maruti Suzuki

We have only one listed player for cars in India, Maruti Suzuki.

I’m not too fond of Maruti cars, but they own 50% of the market share. So it means every alternate car sold is by Maruti.

So if you like their cars, you will have the edge over their good and not so good products.

However, if you prefer some other car brand and still want to invest in the auto sector, one can consider auto-ancillary companies.

Bikes and Scooters – Bajaj Auto / Hero Honda

There is so much more than cars in the auto sector.

So what bike or scooter do you drive?

Why not become a partner in the company by investing in the company as well?

Telecom – Bharti Airtel / JIO

I am sure you are paying a lot more for your mobile bills, which is hurting you. At least it is hurting me.

However, it means the telecom companies are getting more money for the same services. So it may not be great for the customers, but it can be a good choice for the investor.

However, I like to clarify one point: no telecom is a highly competitive sector, and technological enhancements (4G to 5G) for operators drain out so much cash that they may not be a great investment opportunity.

Invest if you understand the business along with being a loyal customer.

Food – Zomato / Domino’s / Burger King

Everyone orders food online now.

Online food delivery is a high growth sector in India. So companies will see a considerable amount of growth.

If you like the food and the services of a player, it is better to partner in such companies’ growth and profits.

Do you Smoke? – ITC

If you smoke, consider investing in the brand.

Offline Shopping – DMart / Reliance Retail

I am sure you may be wondering who all will do offline shopping in 2022?

I also had the same feeling at the time of DMart’s IPO. They offered at ₹300 and then listed at ₹600 and have hit ₹5k+ in a few years.

I still believe offline shopping is on a decline, but time and again, data is proving me wrong.

Then I found that offline shopping giants like DMart and Reliance retail are opening up new offline shops very aggressively. Then they take orders online using the app or website. And use the mall to deliver goods even faster than Amazon Prime.

Oil and Gas – IOC / BPCL / HPCL / GujGas

Everyone uses petrol, diesel as well as LPG gas. So have you considered investing in companies that manage them?

I am not a fan of investing in PSU, and so I avoid them, but it is because of my way of being an investor in the market. However, it is not the only way to invest in the market.

Banking – HDFC Bank / ICICI Bank / SBI

Almost every Indian bank is listed in the Indian market.

So, if you think your hard-earned money is safe with a particular bank, you should also consider investing in it.

Paint – Asian Paints / Berger Paints

When did you last paint your home?

Which companies paint did you use?

Have you considered investing in it yet? If not, it is high time you should consider them for investment.

Heavy Electric Appliances – Voltas / Whirlpool

Summer is here, and I am sure you already have electric appliances like AC and refrigerators ready to serve you better.

But did you look at the company’s name and see if it is listed in India? If not, it is high time you do it.

Kitchen Appliances – TTK Prestige / Stove Kraft

I am sure you remember the tagline – “जो बीवी से करे प्यार, वो प्रेस्टीज से कैसे करें इंकार”

Ask your wife or mom which Mixer Grinder or Microwave Oven she is using.

Then consider those companies for investing.

Medicines – Abbott / CIPLA

Do you or your family members take regular medicines for diseases like sugar, cholesterol, hypertension, and high blood pressure?

If yes, see which companies are serving you. You will be surprised to know that you will find a few companies producing all the medicines for you.

Hospitals – Shalby / Apollo / Fortis

In 2019, my dad had a heart attack and was treated in a nearby Shalby hospital.

I didn’t know it was a listed company then, but I found it as a listed company when I searched. I didn’t invest in it because I thought they were only interested in increasing the bills.

But the point I am trying to make with this article is that if you want to invest in India’s growth story, see from the lens of an investor in everything you are doing.

Jewellery and Eye wears – Titan / TBZ / Kalyan

Even if you are wearing the eye-wear from Lenskart, you should ask your wife or mom who provides the best jewellery designs.

Technology – IT Companies

Finally, I will mention a sector where I have the most expertise. Being a computer programmer and having worked for Indian IT services companies, I can have an edge in investing in them.

So, you don’t need to be a consumer to invest. But, if you have the edge over the understanding of the business much better than others, you should consider investing.

However, I have worked in product-based companies, and Indian listed IT companies are services based. So, I have no IT services companies in my portfolio.

Final Thoughts

Can you find other sectors where you are a consumer but didn’t find it in the list above? Please share it in the comments.