My guess is that in next 2-3 years stocks related to primary sources/producers (mining, sugar, oil etc) or primary sources producers (steel, cement, textile, power etc) are likely to do well. My guess is based on simple assumptions:
(1) All consumers/ pharma / seed, branded players , consumption themes, auto , housing or housing finance, IT etc are priced to perfection for next 3-4 years. So even if they do well stock price appreciation is likely to be muted for them. Also there are investor fancy in these sectors and lot of talk about quality etc.
(2) There is hardly many materials or commodities which india can produce more than it consumes and if it has to grow at least for initial phase of growth it needs those commodities in abundance. Valuations of metals, steel, mining, sugar etc are already priced for close to bankrupty and most of these happen due to dollar getting stronger or slowdown in china etc themes which dont have much impact on fundamental demand in india of those commodities. Again strong dollar as a theme is not very sustainable for long term as amount of dollar printed by FED or EU etc at some point going to show it true effects in terms of increase in inflation and devaluation of us dollar which likely to support prices of primary producers and squeeze margin of branded players.
(3) Already most of agricultural commodities showing price recovery in last 6 months and no new investment is going into mining,steel,sugar, oil etc sector so no supply increase is possible for next many years. Also mostly consensus opinion is that commodity prices likely to remain in bear markets for many years which is already priced in by market and stock prices start recovering much before actual events happening. Any case without demand revival in commodities these level of consumption growth is not likely to sustainable any further.
