Different Sectors in Stock Market: Which are the best stocks under each of them?

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different sectors in stock market

Sectors in Stock Market: Introduction

With the ever-growing interest in the share market, there is a drive among intelligent investors to learn more about varied jargon used in the market. That is what brings you here as well, right? 

Well, in light of this, you must have seen the stock market making headlines about a particular sector taking away the market by storm. Especially with covid around, some sectors like healthcare and consumer witnessed a high boom while other sectors like aviation couldn’t seem to have seen the other side of the door until very recently.

So let us understand the reasons why a particular sector outperforms while the other struggles to survive. Also which sector should deserve a chance in your portfolio based on your investment periphery.. 

What are Sectors in Stock Market

Let’s say you are looking to watch something that gives you shiver spines on Netflix, what would you look for? a thriller section right? Or if you are surfing about the best stocks to invest under Rs 1, you will immediately check out the finance blog in Indmoney. What are these after all? Categories. Stock market sectors have the same philosophy.

Sectors in the share market are merely a way to classify the Indian stocks based on the industry type in which they operate. The marketplace is like an indefinite curveball with more than 1900 companies listed on the stock exchanges. This makes it difficult for an investor to segregate them, especially in times when a stock market segment is at fall.

Market sectors help the investors to understand where they should park their money based on the market performance and help them to diversify their portfolios based on the best-performing stocks of that sector. Further in this article, you shall find some of the best-identified stocks as per their share market sectors.

Identifying Different Sectors in the Indian Stock Market

The market sectors prove to be handy to identify some hidden gems in the stock market. The Indian stock market is a hub of varied sectors, where there is no definite answer to how many sectors are there in the stock market. However some of them can be certainly identified as household names. Let us look at some of the key sectors in the Indian stock market.

Industry/SectorsMarket cap (in Rs cr)Reasons to Invest
  • The advance/decline (A/D) ratio is 1.00, which is on a very good side
  • High potential for long-term investors
  • Huge market size and is expected to grow at a CAGR of 6.8% by the next year, which if true can yield high returns
  • Range of innovations in the Indian alcoholic beverage industry.
  • The automobile industry contributes about 7.1% to the overall GDP of the country.
  • The industry  accounted for a massive 77.21% of the total vehicle sales volumes in FY2021.
  • It is a cyclical industry which shall help the industry to grow at a very high during an economic boom
  • Interdependence of growth of economy and banks
  • Attractive valuations in the sectors
  • Scope of earning double digit earnings
  • Banking Stocks in NIFTY 50 contribute 18.56% of weightage.
Consumer Durables197,507
  • The A/D ratio is 0.86 on the positive side 
  • India is a consumption-driven industry so chances of becoming obsolete are quite slim
  • Indian consumer durables sector seeking investment of a Rs 6 lakh crore market opportunity
  • The industry to grow at 15% CAGR till the financial year 2024-25 as per the experts.


  • Fast-moving consumer goods (FMCG) is said to be the 4th largest sector in the Indian stock market.
  • Even with online shopping emerging as a global trend, it accounts for only about 4.9% of the FMCG market in India. 
  • ITC, Amul, Hindustan Unilever, Nestle, Marico,  Procter & Gamble, and Britannia Industries are among the top-notch double-digitnames in the Indian FMCG sector.


  • The Healthcare sector in India is likely to reach US$ 372 billion by the end of FY2022
  • As of FY2021, the Indian healthcare industry was one of largest employers as it employed a total of 4.7 million people.
  • Ministry of Health and Family Welfare has been allotted a whopping Rs. 86,200.65 crore in the union budget 2022-23
Oil & Gas2,233,305
  • India is known to be the 3rd largest consumer of oil in the world and hence the demand shall be intact
  • 100%  of FDI is allowed in the exploration activities of oil and natural gas fields under automatic route which creates a high potential for foreign investment
  • India is on a mission to become a gas-based economy by increasing the share of natural gas from 6.3 % to 15% by 2030.
  • The power index recently hiked up by 17%
  • The demand-supply gap in Power in India makes it a desirable stock
  • Increasing FDI inflow due to the sector and government favoritism to the industry make it a hot industry to invest in.
Real Estate365,494
  • The recent surge in the industry
  • The private equity investment inflows in India stood at US$ 3.3 billion during the third quarter of FY2021
  • Sales volume has increased by 113% in India since the last year
Software & IT Services2,985,191
  • The industry as a whole is expected to witness a growth of 12-14% in its revenues by the end of the year, as per the experts
  • IT industry currently contributes around 7.7% of the GDP of the country and the figure is expected to grow to about 10% by 2025
  • Indian market share is about 35% of the world economy in the sector

Relevant Factors before Investing in a Market Sector

It is important for an investor to understand, that even though an industry must be all in limelight, it is still important to consider some of the relevant points before making an investment decision 

Financial Health

If you choose to invest in a particular industry based on the records it has been set in that year, you must check the financial health of the company in that industry. You must check if the company shall be able to pay its liabilities and has an earning potential in the future.

Risk Appetite

Your risk tolerance must be an important factor before making an investment decision. Some sectors may appear to be highly appealing but involve a huge amount of risk. If you are an investor who cannot afford to take an ultimate risk with your portfolio, you must carefully scrutinize the fundamentals before investing

Your investment goals

It is important that as an investor you must not invest based on a herd mentality rather you must as per your investment goals. If you are a long-term investor you must consider sectors that shall not become obsolete in the long run, whereas if you deal in short-term profits, little playing around with your stocks shall not hurt.

Best Stocks as per Stock Market Segments in India

Let us now look at some of the best stocks as per their stock market segments in India

CompanySectorMarket cap (in cr)Market Price (in Rs)
Associated Alcohols & BreweriesAlcohol785434.20
Motherson SWIAutomobile25,22257.05
Axis BankBanks2,72,887887.75
Bajaj Electricals Ltd.Consumer Durables12,7091,105.25
Varun BeveragesFMCG74,8251,151.95
Ajanta PharmaHealthcare15,7871,232.15
Indian Oil CorporationOil & Gas1,03,57973.35
Adani PowerPower1,24,946323.95
Ahluwalia ContractsReal Estate2,879429.80
Brightcom GroupSoftware7,53737.35

(Data as of November 25, 2022)

Disclaimer: The securities quoted are exemplary and not recommendatory. Past performance is not indicative of future returns

Important things to remember:

1. Do Not Blindly Follow Hot Tips

No matter how credible the source is, never follow a stock marketing tip blindly without conducting thorough research personally. Always select the stocks after doing proper research and analysis on the performance as well as the companies. While some tips can work out to give you huge benefits, the wrong ones can push you down under the risk pretty quickly. 

2. Eliminate Loser Stocks from Portfolio 

There is absolutely no guarantee that a stock will rise after a great fall. Know that it is extremely important to be practical about what is possible and what's impossible in the stock market. So, upon realizing that a stock is performing poorly in your portfolio, accept your mistake and sell it immediately to prevent further losses. 

3. Don't Exceed Your Investment Budget Abruptly 

While it's true that long-term investments are way better than other forms of investment, you shouldn't exceed your investment budget in a haste. Instead, decide on a fixed amount and invest it across various good stocks. Rather than investing in only one stock, divide your budget evenly across multiple good-performing stocks and shares. 

Disclaimer: The securities quoted are exemplary and not recommendatory. Past performance is not indicative of future returns.

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