S2 E8 - India's Consumption Boom: An Opportunity?

[00:00:00] [SPEAKER_01]: Welcome to Axis Moneynomics, by Axis Mutual Fund. Hello and welcome to Axis Moneynomics, by Axis Mutual Fund.

[00:00:11] [SPEAKER_01]: 5 trillion dollars that's how much Indias GDP is expected to be in the next 3 years according to the Finance Ministry.

[00:00:20] [SPEAKER_01]: In fact, as per the UBS report, we are expected to become the world's third largest economy by 2026.

[00:00:29] [SPEAKER_01]: Hello and welcome to yet another exciting episode of Axis Moneynomics.

[00:00:36] [SPEAKER_01]: This is how we from Axis Mutual Fund.

[00:00:39] [SPEAKER_01]: And today we have with us, it is thus, fund manager at Axis Mutual Fund to dive deep into Indias' consumption growth story.

[00:00:58] [SPEAKER_01]: It is welcome to Axis Moneynomics.

[00:01:03] [SPEAKER_00]: Hey, great and thanks for having me here.

[00:01:06] [SPEAKER_01]: It is Indias already one of the fastest growing economies in the world.

[00:01:11] [SPEAKER_01]: We also have the fifth largest consumer market in the world.

[00:01:15] [SPEAKER_01]: And why not? Our bulk capital income has been rising steadily and has cost the $2,000,

[00:01:22] [SPEAKER_01]: recently as per data from World Bank Group.

[00:01:26] [SPEAKER_01]: Also, our sold consumption has nearly doubled between 2013 and 2023 at a age at a age that is higher than that of China, USA, Germany, the UBS report set.

[00:01:41] [SPEAKER_01]: Sounds very interesting, you think? Can you shed some light on the key drivers of this growth?

[00:01:47] [SPEAKER_00]: Absolutely, Harry. I think we are slowly shifting from a saving economy to be a consumer economy.

[00:01:55] [SPEAKER_00]: And one of the major drivers actually is improved Axis to consumer credit with financial institutions now offering more flexible and more accessible loan products.

[00:02:09] [SPEAKER_00]: How do we actually have leverage up significantly improving consumption?

[00:02:14] [SPEAKER_01]: That's quite insightful, it is.

[00:02:17] [SPEAKER_01]: But tell me, you know what sectors know, actually benefit from this growing consumption?

[00:02:21] [SPEAKER_00]: Yeah, actually this consumption drive could benefit a lot of sectors.

[00:02:28] [SPEAKER_00]: For example, by 2030 OECD expects almost 68% of our populations to be classified as one level higher to middle class.

[00:02:40] [SPEAKER_00]: Our large working population combined with rapid organization improving disposable incomes and growing aspirations is driving growth in the consumption sector.

[00:02:52] [SPEAKER_00]: As I discussed, while on one side this is supported by credit growth, digitalization is also accelerating our growth.

[00:03:02] [SPEAKER_00]: A recent report by IMI and Qatar showed that India has more than 80 to crore active internet users and you'll be surprised to know that about half of them are from rural India.

[00:03:13] [SPEAKER_00]: The cheap data plants also people are doing everything digitally from consuming audio and video content to shopping.

[00:03:24] [SPEAKER_00]: And more and more Indians are growing, going digital.

[00:03:28] [SPEAKER_00]: In fact, did you know we have the third largest digital shopping population as part of it by being in coal?

[00:03:35] [SPEAKER_00]: And this growing digital population is driving the growth for consumption related sectors like FMCG, consumer durable non-derables auto telecom and services like air travel.

[00:03:49] [SPEAKER_01]: Interesting, there is also expand on some of these sectors in the country.

[00:03:53] [SPEAKER_00]: Yeah, sure. So let's start with FMCG. As per Crisil, the FMCG sector is expected to see a revenue growth of 7% to 9% in FY25 compared to 5% to 7% in FY24.

[00:04:09] [SPEAKER_00]: Along with rising organization and also disposable incomes improving vehicle sales in India are also rising.

[00:04:18] [SPEAKER_00]: Our auto market is on track to hit a significant milestone with projections estimating it will reach almost $300 billion by 2026 as per an article in the economic times.

[00:04:33] [SPEAKER_00]: And as I discussed since digitalization is also rising, people are buying most smartphones and consuming online services like air travel and hotels.

[00:04:44] [SPEAKER_00]: Along with digitalization we are seeing India's e-commerce industries also booming.

[00:04:50] [SPEAKER_00]: People are investing a lot in home appliances, electronics and other consumer durables to enhance their life quality.

[00:04:58] [SPEAKER_00]: And with more gadgets and appliances being bought, the consumer durable market is also doing well.

[00:05:04] [SPEAKER_00]: In fact, it is expected to reach $35 billion by 2025 by IVF research. Also, we can see a premiumization trend as well.

[00:05:17] [SPEAKER_00]: People are taking more flights than ever making India the third largest domestic airline market in the world.

[00:05:24] [SPEAKER_00]: As people seek more experiences, the hospitality sector continues to flourish.

[00:05:29] [SPEAKER_01]: Looks like a lot of sectors are related to consumption, push in India.

[00:05:34] [SPEAKER_01]: India is becoming a consumer-driven economy.

[00:05:38] [SPEAKER_01]: I'm very excited to announce that investors can now tap into this potential of India's glowing consumption with the launch of the access consumption fund.

[00:05:49] [SPEAKER_01]: This is a new fund offering from access mutual fund.

[00:05:53] [SPEAKER_01]: Itesh could you take us through this fund?

[00:05:56] [SPEAKER_00]: Sure, so access consumption fund is designed to capitalize on the booming consumption trends in India.

[00:06:03] [SPEAKER_00]: The fund actually aims to invest in companies that are at the forefront of this consumption revolution across various sectors.

[00:06:13] [SPEAKER_00]: The fund also aims to provide long-term capital appreciation from an actively managed portfolio of equity and equity-related securities.

[00:06:21] [SPEAKER_00]: Investing in companies engaged in consumption-related sectors or allied sectors.

[00:06:29] [SPEAKER_00]: By investing in access consumption fund, investors can potentially benefit from their robust growth in these sectors and the overall economic expansion.

[00:06:39] [SPEAKER_01]: That really sounds like a great opportunity for investors looking to ride the wave of India's consumption boom.

[00:06:47] [SPEAKER_01]: Thank you so much, Itesh. We're joining us today. Your insights are truly valuable.

[00:06:52] [SPEAKER_00]: Thank you very much for the pleasure to be here.

[00:06:54] [SPEAKER_01]: And that's a wrap for today.

[00:06:57] [SPEAKER_01]: Thank you so much for tuning in.

[00:06:59] [SPEAKER_01]: If you found this episode valuable, make sure to subscribe and follow.

[00:07:04] [SPEAKER_01]: And don't forget to share it with your friends and family, or diving into the world of investing.

[00:07:11] [SPEAKER_01]: Until next time, this is your host, Hadee, signing off.

[00:07:16] [SPEAKER_01]: Investors are requested to consult the financial, tax and other advisors before taking any investment decisions.

[00:07:24] [SPEAKER_01]: Mutual fund investments are subject to market risks. Read all-skinned related documents carefully.