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The real story in the consumption theme is not about welfare schemes and tax breaks driving higher disposable income (which are the popular narratives), but its all about understanding changing priorities of Indian consumers and picking stocks that are on the right side of these shifts.
Ratish gives an example of AC sales – they are growing faster than GDP for several years and well ahead of the entire consumption pack as larger proportions of Indian families treat ACs as necessities and not nice-to-haves.
Another stark example is the willingness of 90+cr internet users to pay higher amounts to telcos for broadband usage while cutting back on other consumption items. Monetization of this content-hungry consumer base represents a huge and sustained opportunity.
Discretionary consumption in India is a decadal growth opportunity. The key lies in identifying consumption priorities of diverse consumer sets and businesses that will likely benefit most from these trends.
Sundaram Consumption Fund has delivered a sound 1 yr performance (7.7% return vs 4.6% of its thematic benchmark and 1% of the broad market index BSE500TRI). Ratish says this alpha is a combination of stock selection as well as lower drawdowns during the recent correction.
