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India: Local Entrepreneurial Leadership

India is home to vibrant, entrepreneurial companies which are leaders in their respective segments and positioned to benefit from the key driving forces in the market.

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Date published
15 Dec 2021

India is the 6th largest economy in the world and home to vibrant, entrepreneurial companies

India poses an exciting opportunity among emerging markets – we talk much about the world leaders emerging in nations like China or Korea but there is another type of company which is experiencing long-term sustainable growth. These are the local, entrepreneurial companies who display ingenuity and can take advantage of domestic structural change and consumer trends. Many of these companies are found in India and are experiencing strong growth. The market agrees: India’s equity market has outperformed the MSCI Emerging Markets Index by over 30% in the past year1 and the Indian market earnings revisions are one of the strongest in emerging markets, up over 40% in 2021.2

Figure 1: India has one of the highest gross domestic product (GDP) in the world

Source: Statista and IMF. 10 countries with the largest GDP 2020.

Our Global Emerging Markets team continues to be optimistic about the portfolio’s Indian stock holdings which we believe will benefit from structural growth changes.  The combination of strong vaccination rates, capex recovery and the redirection of government spending toward investments and infrastructure provide a supportive environment for domestic equities. With this backdrop in mind, the Global Emerging Markets team looks at the broader driving forces in the Indian market and how the portfolio is positioned to take advantage of them.

Benefitting from India's driving forces

India is home to vibrant, entrepreneurial companies which are market leaders in their respective segments. They are positioned to benefit from key driving forces of underpenetration, formalisation and housing.

In the following sections we highlight how some of our portfolio is positioned in order to take advantage of these forces.


The local market is deeply underpenetrated in areas such as passenger vehicles and financial products and services.

Maruti Suzuki is the leading Indian automotive company with roughly 50% market share.3 With only 6% of India’s population owning a car (versus 88% in the US), we believe this a great growth opportunity.4

India is projected to have the largest share of incremental growth of nearly 30% in passenger vehicle sales globally for the next decade.5

Our Global Emerging Markets team continues to be optimistic on the portfolio’s Indian stock holdings which we believe will benefit from structural growth changes.


Retail activity is moving to formal channels with a focus on premium brands. We see this trend across the entire landscape, ranging from broadline retailers to specialty retailers and home building products.

Titan is the leading luxury jewellery and watch retailer in India where 70% of the market is estimated to be unorganised. Revenue growth has been as high as 70% recently, driven by a broad shift to branded jewellery.6

Broadline retailer Reliance benefits from part of the structural shift from unorganised to organised retail markets. Unorganised retail is estimated to be 90% of the Indian market and organised retail the remaining 10%.7 Reliance is a proven market leader -their retail revenue base is 30% higher than the next 10 largest retailers combined.8

Housing and property cycle

Unlike China which is currently experiencing weakness in property market fundamentals, India’s property cycle is improving (following an 8-year period of weakness). Affordability has improved and there is a structural demand-supply gap across all the major property markets of high, medium and low income (figure 2).

Figure 2: Cumulative demand and supply numbers for housing in eight major cities of India 2016-2020

We have two-pronged exposure to housing-driven growth: retail banking and building materials.

Our exposure to retail, private enterprise banks is through HDFC Bank, ICICI Bank and Kotak Mahindra Bank. These companies have the largest market shares in lending with a combined market share of roughly 20% of all lending in India.9

The portfolio holds building material stocks such as Asian Paints and Ultratech Cement. Asian Paints has a 39% market share in the domestic Indian paint market, more than the next three largest combined.10 It is a premium product with the ability to pass through higher raw material costs and recently announced a 10% price increase. Ultratech is India’s largest cement manufacturer with exposure to all product verticals. Cement is a beneficiary of both underpenetration and end-market demand improvement in real estate and infrastructure. For example, ready mix concrete is a very small portion of India’s cement consumption (compared to being the vast majority in developed markets).

Source: Statista and India Brand Equity Foundation; Anarock; Cushman & Wakefield (IBEF real estate 2020, page 9), December 2020. The cities of Delhi NCR, Mumbai MMR, Ahmedabad, Kolkata, Pune, Hyderabad, Bengaluru and Chennai are generally known as the eight major metropolitan areas in India.

In addition to global leaders, emerging markets present a unique opportunity to invest in local market leaders with the potential to benefit strongly from consumption trends and structural reforms in their domestic market. India's vibrant market is home to several of these companies and we have positioned the portfolio for investors to partake of the exciting opportunity it presents.

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1Source: MSCI. MSCI India returned 36.5% in the 12 months to 30 Nov 2021, compared to the MSCI Emerging Market Index returns of 4.6% over the same period.; Stakeholder Engagement | Antofagasta PLC.

2Source: FactSet, Martin Currie, December 2021E.

3Maruti Suzuki market share was 47.8% for passenger cars in India for the financial year 2021. Source: Statista and Auto Punditz.

4Source: Statista and Pew Research Center, 2014, and Martin Currie research.

5With global passenger vehicle sales expected to grow around 20% between 2020 and 2030, India is expected to increase its share of sales from 4% in 2020 to almost 6% in 2030. Source: Statista and OICA, Morgan Stanley Research, Martin Currie, 2021.

6Source: Martin Currie, company results.

7Source: Martin Currie.

8Source: Martin Currie.

9Source: FactSet, June 2021.

10Source: Statista and Nirmal Bang, financial year 2020. The next largest paint firms operating in India have market shares of: Berger Paints India 12%; Kansai Nerolac Paint 11%; Akzo Nobel India 6%.

Regulatory information and risk warnings

This information is issued and approved by Martin Currie Investment Management Limited (‘MCIM’), authorised and regulated by the Financial Conduct Authority. It does not constitute investment advice. Market and currency movements may cause the capital value of shares, and the income from them, to fall as well as rise and you may get back less than you invested.

The information contained in this document has been compiled with considerable care to ensure its accuracy. However, no representation or warranty, express or implied, is made to its accuracy or completeness. Martin Currie has procured any research or analysis contained in this document for its own use. It is provided to you only incidentally and any opinions expressed are subject to change without notice.

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The document does not form the basis of, nor should it be relied upon in connection with, any subsequent contract or agreement. It does not constitute, and may not be used for the purpose of, an offer or invitation to subscribe for or otherwise acquire shares in any of the products mentioned.

Past performance is not a guide to future returns.

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The views expressed are opinions of the portfolio managers as of the date of this document and are subject to change based on market and other conditions and may differ from other portfolio managers or of the firm as a whole. These opinions are not intended to be a forecast of future events, research, a guarantee of future results or investment advice.

Please note the information within this report has been produced internally using unaudited data and has not been independently verified. Whilst every effort has been made to ensure its accuracy, no guarantee can be given.

The information provided should not be considered a recommendation to purchase or sell any particular security. It should not be assumed that any of the securities discussed here were or will prove to be profitable.

Risk warnings – Investors should also be aware of the following risk factors which may be applicable to the strategy shown in this document.

  • Investing in foreign markets introduces a risk where adverse movements in currency exchange rates could result in a decrease in the value of your investment.
  • This strategy may hold a limited number of investments. If one of these investments falls in value this can have a greater impact on the strategy’s value than if it held a larger number of investments.
  • Smaller companies may be riskier and their shares may be less liquid than larger companies, meaning that their share price may be more volatile.
  • Emerging markets or less developed countries may face more political, economic or structural challenges than developed countries. Accordingly, investment in emerging markets is generally characterised by higher levels of risk than investment in fully developed markets.

For institutional investors in the USA: The information contained within this presentation is for Institutional Investors only who meet the definition of Accredited Investor as defined in Rule 501 of the United States Securities Act of 1933, as amended (‘The 1933 Act’) and the definition of Qualified Purchasers as defined in section 2 (a) (51) (A) of the United States Investment Company Act of 1940, as amended (‘the 1940 Act’). It is not for intended for use by members of the general public.

For wholesale investors in Australia: This material is provided on the basis that you are a wholesale client within the definition of ASIC Class Order 03/1099. MCIM is authorised and regulated by the FCA under UK laws, which differ from Australian laws.