Best Manufacturing Stocks in India 2023

12 January 2023
5 min read

The manufacturing sector in India is one of the largest in the world. It is also one of the fastest-growing sectors for creating jobs in any economy. Therefore, the Prime Minister of India, Mr Narendra Modi, launched the “Make in India” program to place India on the world map as a manufacturing hub and thereby give global recognition to the Indian economy.

Under the ‘Make in India’ initiative, the Modi government aims to increase the share of the manufacturing sector to the gross domestic product (GDP). 

India's manufacturing industry is dominated by small and medium-sized enterprises (SMEs). These companies manufacture products that are primarily exported abroad or used domestically. However, they also produce large quantities of finished goods for domestic consumption and export, helping reduce India's trade deficit.

India has become a global leader in several high-tech industries, such as automobile manufacturing and information technology services, contributing significantly to its economic development since its independence from British colonial rule in 1947.

Top Manufacturing Stocks 2023

The following are the best manufacturing stocks to invest in India-There are several factors to consider before investing in manufacturing stocks. These include the company's background, financial performance, and so on.

S.No.

Manufacturing Stocks

Type of Industry

1.

Hindalco

Aluminium and Copper Manufacturing

2.

Sun Pharma

Pharmaceutical

3.

ITC

Diversified Conglomerate

4.

HPCL

Oil and Gas

5.

Reliance Ind.

Multinational Conglomerate

6.

Dr. Reddy's Lab

Pharmaceutical

7.

BPCL

Industrial & Commercial Fuel Services

8.

Bajaj Auto

Automobile

9.

UPL

Agribusiness Chemicals

10.

Tata Steel

Steel Manufacturing

Factors To Consider Before Investing In Manufacturing Stocks

  • Company Background

Investors should look at the company's history and background to ensure that they invest in a company with a strong track record. They should also look at the company's financial performance over time to see how well their products sell.

  • Financial Performance of the Company

The financial performance of a manufacturing stock is often one of the most important factors when determining whether or not it is right for you to invest in it.

For example, suppose a company is having trouble keeping up with demand for their products because they don't have enough employees or enough factories. In that case, it could be difficult for them to stay afloat financially while trying to meet customers' demands and maintain quality control standards.

  • Growth Potential

The main factor is the long-term growth potential of the company. Manufacturing companies are great at producing things, but they can also be good at changing their business model and creating new products that bring in more revenue. So look for companies that have been doing well for years and are poised to grow even more.

  • Risk Appetite

Another critical factor is how much risk there is in the stock. There are some great manufacturing companies, but some companies whose stocks could crash as soon as you buy them. So make sure you can handle that risk before investing any money.

  • Company Debt

In addition, look at how much debt the company has taken on recently—this might not seem important at first glance, but it's essential! It's important because if a company is struggling with a debt burden, it may not have enough cash flow available to fund operations without resorting to risky behaviour such as borrowing money from investors or issuing new securities.

Best Manufacturing Stocks 2023: Overview

1) Sun Pharma

Sun Pharmaceutical Industries Limited is a speciality generic pharmaceutical company. The Company is engaged in manufacturing, developing, and marketing a range of generic formulations.

It produces a portfolio of generic and speciality medicines targeting chronic and acute treatments. Its OTC brands include Faringosept, Revital, and Volini. The Company offers various dosage forms, such as tablets, capsules, sprays, injectables, inhalers, ointments, creams and liquids. 

2) ITC

ITC Limited is an India-based holding company. The Company operates through four segments: FMCG (fast-moving consumer goods), Hotels, Paperboards, Paper and Packaging, and Agri-Business.

The FMCG segment includes Cigarettes, such as cigarettes and cigars, and Others, such as branded packaged foods businesses (staples and meals; snacks; dairy and beverages; biscuits and cakes; chocolates, coffee, and confectionery); education and stationery products; personal care products; safety matches and agarbattis and apparel.

3) HPCL

Hindustan Petroleum Corporation Limited is engaged in the business of refining crude oil and marketing petroleum products, production of hydrocarbons, and providing services for the management of exploration and production (E&P) blocks, generation of power and operating liquefied natural gas (LNG) regasification terminal (under construction phase). It exports various petroleum products from its refineries, which include fuel oil, naphtha, high Sulphur Gasoil, and high Sulphur gasoline. 

4) Reliance Ind.

Reliance Industries Limited is an India-based company which operates in the Oil to Chemicals (O2C), Oil and Gas, Retail, Digital Services, and Financial Services segments.

The O2C segment includes refining, petrochemicals, fuel retailing through Reliance BP Mobility Limited, aviation fuel, and bulk wholesale marketing. Its assets include refinery off-gas crackers, aromatics, gasification, multi-feed and gas crackers, downstream manufacturing facilities, logistics, and supply-chain infrastructure. 

5) DR. REDDY'S LAB

Dr Reddy's Laboratories Limited is an India-based pharmaceutical company. The Company’s segments include Global Generics, which is engaged in manufacturing and marketing prescription and over-the-counter finished pharmaceutical products ready for consumption by the patient. It was founded in 1984, and its managing director is Mr G. V. Prasad.

Conclusion

India's manufacturing sector primarily focuses on producing goods for export markets rather than domestic use. This has allowed India to become a significant exporter of finished goods and intermediate inputs (such as petroleum products) to other countries.

However, this sector also has significant challenges, including high pollution levels and energy consumption. 

To read the RA disclaimer, please click here
Research Analyst - Bavadharini KS

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Disclaimer

The stocks mentioned in this article are not recommendations. Please conduct your own research and due diligence before investing. Investment in securities market are subject to market risks, read all the related documents carefully before investing. Please read the Risk Disclosure documents carefully before investing in Equity Shares, Derivatives, Mutual fund, and/or other instruments traded on the Stock Exchanges. As investments are subject to market risks and price fluctuation risk, there is no assurance or guarantee that the investment objectives shall be achieved. NBT do not guarantee any assured returns on any investments. Past performance of securities/instruments is not indicative of their future performance.
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