With regards to value investing in India and picking the right stocks, there are few better than Aditya Mehta, of Equitylion India, who says there is still a lot of opportunities in Indian stock market right now as the Indian economy is undergoing a structural change which is giving way to value migration.
Aditya Mehta, who is known for spotting multi-bagger stocks in India at the right time, says he sees over two dozen themes which are yet to be recognized by the market.
“There are plenty of opportunities to invest in the economy, especially in a country like India which undergoing a change. As the economy changes from black to white, from unorganized to organized, this change will result in value migration in many sectors, and that is where value investors can make 10x-20x returns in coming years,” Mehta said in an interview.
India is ripe with opportunity, and if investors can pick the right stocks at the right time, above average returns will happen. One such opportunity lies in the FMCG sector, said, Mehta.
Indian FMCG and Consumer sector is a critical sector where the value migration is happening. A similar situation was visible in the banking space a few years back when private sector banks captured the market, and something comparable has as of now began occurring in the consumer space.
FMCG is a vital industry for the stock market in the coming years. In any case, why now?
They years 2014 and 2015 were poor monsoon years for the Indian economy. Weak monsoons severely affected the rural demand. FMCG was considered to be a slow-growth sector. Further to this if one takes a closer look at the Indian Consumer space most of it is unorganized with transactions conducted in cash, but now with 7th pay commission, demonetization and the introduction or GST or Goods and Services Tax, is making the sector attractive.
GST or Goods and Services Tax. Once the GST becomes an enforceable law, it will change the way in which distribution and warehousing take place in India. Further, it will force major segments of the consumer sector to become organized.
“All these changes/things are going to create huge value migration within the industry,” said Mehta. A lot of companies will get organized, and buyers will be well aware of their rights. Regarding revenue of the FMCG industry is minuscule when compared with that of China.
In 2015, China recorded a revenue of $584 billion from FMCG Sector. Profits today moved 10-20 times since 2005 (past decade), he said. “We are nowhere when it comes to revenue from the FMCG sector despite having such a large population,” said Mehta.
There is a massive structural change which is happening in the sector. “The government’s push towards more transparency, and non-cash economy and GST to name a few,” he said.
To become expert stock picker, Mehta advises investors to track changes which are happening in the sector, learn it and Identify companies with strong competitive moats which will benefit from the value migration.
About Aditya Mehta
Aditya Mehta is a serial entrepreneur and investor. He is an alumnus MBA from the University of Sheffield, the United Kingdom with a Major in Finance and Strategic Management. Aditya has over ten years of experience in the Stock market and Marketing. He helps investors and companies on sustainable business models in the start-up arena. He is a registered SEBI independent Research Analyst. He published his stock market research reports and focused on principles of Value Investing in India.
Official Website: http://www.equitylion.com/
Company Name: Equitylion Inc
Contact Person: Aditya Mehta
Phone: +91 9167432259