Stock Market: Sectors that outperformed in 2021, space to watch out for in 2022 - Experts' Take

The year 2021 witnessed a bull run like never before in recent decades. The equity market was powered by Metal, IT, Pharma and Power sectors, while Realty too jumped in to push the already burgeoning market to new highs this year. The thrust also came from the primary market, which saw companies raising record capital in 2021.  

As per Stock Edge, an app to analyse NSE and BSE data, Nifty Metal surged 77%, S&P BSE Power jumped 745, Nifty Realty clocked 61% return and Nifty IT soared 54.4% in the last one years as on December 23, 2021. During the same time S&P BSE SME IPO grew many folds to over 800%, showed the Stock Edge data.  

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Metal, IT real estate remain favourites

Speaking about sectors that outperformed and those which have potential to do well going forward in 2022, Gaurav Garg, Head of Research at CapitalVia Global Research, said," Metals, IT and Real Estate sectors have done well in 2021. I believe they might continue to do well, however, Specialty chemical, Mid-cap IT stocks along with auto-ancillary stocks might do well and generate good returns in 2022."

Manufacturing-related sectors look promising
Vinod Nair, Head of Research at Geojit Financial Services, expects manufacturing sectors like capital goods, industrial, auto and consumption-based themes to do well due to rise in economic activities.

"We are also positive on IT, Pharma and FMCG, which have been consolidating in the last couple of months. We suggest sectors like tourism, media & logistics to gain traction in the later part of the year, and should be considered during the ongoing consolidation," suggested Vinod Nair.

Good time to accumulate IT, metal and power stocks

IT, metal and power were the highlights of 2021, says Manoj Dalmia, Founder and Director, Proficient equities Private limited. "These sectors underwent a major P/E expansion phase. Sectors like metal, pharma have become sluggish recently and these can be seen as a good opportunity to accumulate value stocks," recommends Manoj Dalmia.  

Proficient equities Private limited Founder and Director said in 2022, investors can consider putting money in real estate, PSU Banks and futuristic companies and platforms.  

Banking, financial, IT and insurance sectors will be the main drivers
 
In 2021, Banking, Infrastructure, IT, Auto, Metals and Pharma were among the top sectors that had given tremendous returns to the investors, says Ravi Singh, head of Research and vice president, share India.

"As the economic cycle has picked up and revival in corporate earnings is strong, we expect the same strength to continue in 2022. The banking, financial services, technology, housing and insurance sector will be the main driver of the market due to their improved outlook, current lower interest rate regime and augmented government spendings," he said.  

He further said that Power, Railways and Oil & Gas space will also remain attractive for a mid-to-long-term perspective. "Other sectors like Travel, Tourism, leisure, Real Estate and ancillaries like cement and other building material companies are also expected to contribute in 2022. This optimism has positively replicated on the technical charts as well," he added.

Domestic economy facing sectors like real estate, power and infra will be good bets
Sunil Nyati, MD, Swastika Investmart Ltd was bullish on the domestic economy facing sectors like real estate, power & infra, Capital goods and Banking.  

"If I talk about the real estate sector then there is a turnaround story after 10 years of underperformance, where the last 5 years were very painful due to demonetization, NBFC crisis, RERA, etc. But things are looking very bright now, thanks to low-interest rates, stamp duty cuts, supportive government policies and consolidation in the industry due to RERA," he said.