Monday, May 8, 2017

NEW OPPORTUNITIES FOR PRIVATE EQUITY AND STOCKS UNDER GST


Well which stocks to focus once GST comes over in the next couple of years is going to be a big event and identification of stocks is going to be another broader gamble. What is being depicted here is the areas where Private Equity Investments, entrepreneurship and key industries transformation will happen in the next couple of years from where one will make money from stock investments.  At the same time Cost Accountants and other professionals should also come to know the places from where the next level of high paying jobs will come up and which areas of practicing will grow in the coming days. From Investments, to employment  to stocks everything gets premium value in the next Among all these many IPO will come to provide mouth watering returns.  Many stocks might have never performed will get into limelight going forward. The traditional days of the warehousing industry will change going forward and more down slide will come for the industry. I am quite in fear that many warehouses will run vacant and future investments in warehouse will come to a significant slowdown once GST kicks in. Currently the growth of the industry has been riding on the wheels of the taxation benefit. Let me elaborate this segment so that you get the clarity about the downfall of the industry. All manufacturers have to pay central Sales tax (CST), when moving a good to another state and selling it in the other state.  Now currently if the good is moved for stocking and not for sale, then CST need not be paid. So, in order to avoid CST, players in the value chain have created a complex network of storage points across the country. This is a substantial cost on the companies and also at the end user as the rent for storage is apart of sales and marketing expenses.  Multiple warehouse points will narrow down to few numbers converting into Mother Warehouse Concept.

 But, with GST, which facilitates one tax payment, the curtailment in the layers of stages in the shipment of goods is a guaranteed factor paving the way for the transfer of consignments directly from plant to the wholesaler/ retailer or even end user in the B2B cases thus eliminating the inventory cost in many supply chain operations. This is the place where warehouses decade old double profit story comes to an end. This is the same place where Investment Bankers will come up to create their wealth.

The next level of growth in stocks and companies will come from Logistic supply companies which is a well known fact but another level of growth will come from new entrepreneurs entering into the industry which will facilitate transportation and save the fixed cost burden of the Small and Medium Enterprise. Since SME will need growth and they will get growth from GST but buying a own fleet of transportation might be cumbersome right at the moment hence service providers in this segment will grow in the long term.Cost Accountants will find huge growth as multiple industries  will open. FDI infllows will also grow making the career prospect for this industry to jump many folds.

Commercial automobile company’s stocks prices will grow in the long term as the demand for this segment will grow. Most of industries will now use hub and spoke model in the Indian transportation sector which will reduce the storage cost next to negligible.  Small IT companies will get huge growth opportunity who will enter into the space of providing Infrastructure support to these SME and transportation companies smooth multiple operation.  Many PE and investment bankers will come up to create opportunities for these low hanging fruits which will improvise the business revenues and industry growth too. New industries will come up where automation and Artificial Intelligence will play a pivotal role. Further Big data analytics will resolve the down time and smooth efficient operating profit growth for the various industries on logistic segment.

NBFC’s will also plays stupendous role as  rural India will grow their business hence Companies in NBFC will get huge growth in the next 2 years from now. New Hubs will come up and new advanced technology driven warehouses will be in demand. Hence the game of ordinary warehouse exploitation comes to an end. The investment in automation would start growing now. Automated, high-speed, cross-belt sorting technology will grow, hence PE and investment bankers should focus on these areas. Companies will require ERPs, advanced planning and warehousing systems in their large warehouses. Hence advanced level of warehouses is the key investment destination. That's why traditional warehouses will come to an end.Technology in logistics, such as the use of advanced telematics, real-time vehicle tracking and route planning, are likely to help manage and execute operations in an efficient and seamless manner. New college pass outs should focus on joining these industries as flush of capital will come up and qualified talents will be required to capture the whole of India in terms of distribution of goods and creating business opportunities. FDI infllows will also grow making the career prospect for this industry to jump many folds. The key thing will be to watch how fast the Corridor projects gets completed. Further as ideal time come down more fleets will be purchased to expedite the supply hence buy these stocks of the various industries discussed above.Cost Accountants will find huge growth as multiple industries  will open. FDI infllows will also grow making the career prospect for this industry to jump many folds.

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