Fund Strategy
Manufacturing: Sector Focus
There is a huge opportunity in India's Manufacturing Sector
- Capital Goods / Industrials
- Pharma / Chemicals
- Autos / EVs / LITHIUM ION / Solar / Power
- Textile / Steel / Cement / Green Energy / Renewables
- Avoid: Infra / Real Estate / Trading
10 Reasons Why We Like Manufacturing?
- Opportunity For Import Substitution
- Deleveraging: Highest Across The World
- Corporate Balance Sheets: Lower Leverage
- Bank Credit Is Back
- Demand: Shifts In India's Income Pyramid
- Demographics: India Is Competitive
- Order Books: All Time High
- Capacity Utilisation: Above Average
- Corporate Profit: About To Take Off
- Government Reforms
Opportunity For Import Substitution
Import reduction due to Policy reforms, local investments & disruption in global supply chains. Huge potential for Manufacturing Sector
Deleveraging: Highest Across The World
Source: BIS, Jefferies
Indian non-financial sector debt-to-GDP has declined by 24%
Corporate Balance Sheets: Lower Leverage
Deleveraged India Inc has enough headroom to increase leverage for funding capex. This sets the stage for a new leg of investment cycle.
Bank Credit Is Back
Impaired loans have now decelerated to a 10-year low.
Banks are ready to fund the capex cycle.
YTD credit id growing at one of the highest rates in the past 10 years due to increase in domestic demand.
Demand: Shifts In India's Income Pyramid
Demographics: India Is Competitive
India has the best demographics amongst the leading Emerging Market countries. Labour costs are a key factor to propel India to become the world’s manufacturing hub
Order Books: All Time High
Post-COVID the capital goods industry saw a revival in order bookings
Increasing intensity of Gross Block addition due to demand uptick
Capacity Utilisation: Above Average
Capacity utilisation saw an uptick post-COVID and is currently above long-term average.
Corporate Profit: About To Take Off
Profits to compound at more than 25% over the next four years to reach the previous peak of 7% of GDP
Government Reforms
Do You Think Last 8 Years Reforms In India Can Be Wiped Of By A Single Event?
Increasing intensity of Gross Block addition due to demand uptick
Eco System
