Ravi Dharamshi expects exceptional growth in this space within consumption
If the country has to go to a $5 trillion economy, the per capita income will rise to $4,000-4,500. In anticipation of that, the next six months are a great period to be looking at some of the consumption bets, according to the Chief Investment Officer of ValueQuest Investment Advisors.
With valuations in the consumption space look compelling, Ravi Dharamshi, Chief Investment Officer at ValueQuest Investment Advisors, believes "the premiumisation story and the higher value products where the discretionary spends are, are the ones that will benefit disproportionately going forward."
Dharamshi noted that consumption remains a longer term team in India; it cannot be written down.
If the country has to go to a $5 trillion economy, the per capita income will rise to $4,000-4,500. In anticipation of that, the next six months are a great period to be looking at some of the consumption bets.
"It's a bit of a contrarian bet, but I feel that that is the space to be looking at,” he said.
He explained that the hockey stick growth can really come into play on the discretionary side.
On the staples side, it's a challenge to witness that transition from a 5-6% growth rate to hitting 10-12%, especially considering factors like the level of penetration in certain product categories. Toothpaste, for instance, has an over 70% penetration, so expecting a significant jump there is unrealistic.
However, as consumers move up the hierarchy of needs, towards experiences, services, and goods that were once considered luxuries, there is a natural inclination inclined towards a premiumisation narrative.
“I am not saying this is necessarily the space where one should be investing, but the relative valuations are starting to get attractive and probably the worst of the performance is starting to get factored in. So, these are the areas where one should start looking, is what I feel,” Dharamshi added.
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Also Read | Consumption growth slows, Indians are consuming less food and more durable goods, finds households survey
For the entire interview, watch the accompanying video
(Edited by : Shweta Mungre)
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