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Tales from the road: Intrigued by India

Portfolio Manager Aimee Truesdale recently conducted a research trip to India. Here, we outline her key observations around the exciting growth opportunities in India.

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Date published
17 Mar 2023
Aimee Truesdale, CFA Portfolio Manager

  • "Commentary from various companies underlined that the mass affluent proportion of the population continues to thrive, with urban areas showing strong growth trends."

    Aimee Truesdale, Portfolio Manager

This was reinforced during the trip, seeing that even small street-side vendors were taking payment by QR code or digital transfer. Additionally, a number of people commented that in the larger cities people have stopped carrying or using cash, even for small payments.

Banks are well-positioned for this digital shift, having invested in technology such as user-friendly banking apps, and are gaining share from non-banking finance companies who have struggled with a regulatory clamp-down6. Bank credit growth in the September-December 2022 quarter was very strong at 17% year on year7 and the banks Aimee met with continued to see positive momentum.

Although digital has grown a lot, physical bank branches continue to play an important role in the financial space in India. Many customers are using these financial or digital products for the first time and need to be talked through how to use them. Additionally, although digital has grown there is still a sizeable informal, economy especially in lower tier cities and rural areas which have yet to be converted to digital. During a meeting with HDFC Bank, management discussed how they are tapping into this demand by expanding the company’s branch network into these harder to reach areas. HDFC currently have over 7,100 branches, of which around half are in rural and semi-urban areas8. They expect this to help them reach new customers in an environment where banks are competing for customer deposits.

Infrastructure and Construction

India’s drive towards modernisation has also manifested itself in significant infrastructure projects. Throughout India, there are 16 metro projects (both expansions to existing systems and new systems) under construction, and 16 upcoming projects9 . One of these is a 243km expansion to the Regional Rapid Transport System (RRTS) in the Delhi, Rajasthan and Haryana area9. Another of these projects is an ambitious expansion to Mumbai’s metro network. Visually, the scale of the project is breath-taking, with both overground and underground lines being built. Although in the short term it is not helping Mumbai’s traffic situation, once completed it will have massive benefits for the city. Despite the various headwinds that abound, these projects are ongoing and will make major changes to the Indian skyline over the next few years.

During a meeting with the cement company Ultratech, management discussed the opportunities they are seeing not just in infrastructure, but also in residential housing construction. Covid has resulted in more demand for living space, and household incomes are rising. The company saw low double digit year-on-year volume growth in the September-December 2022 quarter, and strong overall sales growth10. This demonstrates that demand for cement is robust and has been able to withstand price increases implemented as a result of raw material inflation.


Overall, we remain optimistic about our positioning within the Indian market. The consumer space is particularly exciting as the names we hold benefit from the trends around formalisation as well as rising income levels. In the financials space we have been focused on the digital leadership of our holdings as well as the resultant opportunities. Our approach to the Indian market is in line with our portfolio more broadly. We continue to believe our highly selective, stock-focused approach will prosper through accessing companies with a high return on equity that operate in structurally growing industries.

  • "Throughout India, there are 16 metro projects (both expansions to existing systems and new systems) under construction, and 16 upcoming projects.2"

    Aimee Truesdale, Portfolio Manager