Despite a recent retrenchment Indian consumer stocks have still outpaced a buoyant wider domestic stock market over the medium term, supported by an emergent middle class in the country.

On a three-year view the MSCI India Consumer Discretionary index has delivered an annualised return of 16.3% versus 11.1% for the MSCI India index.

Car and motorcycle manufacturers dominate this part of the market, accounting for more than 50% of this sub-set of the market. Founded as a steel company in 1945, automotive outfit Mahindra & Mahindra (M&M:NSE) is the largest name in the space.

The company produces SUVs, multi-utility vehicles, pickups, lightweight commercial vehicles, heavyweight commercial vehicles, and tractors.

Among the other big consumer names is Zomato (ZOMATO:NSE) – a takeaways platform roughly analogous to the likes of Deliveroo (ROO) and Just Eat.

Several of the largest listed Indian consumer firms are subsidiaries of conglomerate Tata Group, including Tata Motors (TATAMOTORS:NSE), fashion accessories group Titan (TITAN:NSE) and Indian Hotels (INDHOTEL:NSE) which manages a portfolio of hotels, resorts, jungle safaris, palaces, spas and in-flight catering services.  

This collection of consumer-focused companies has an average forward price to earnings ratio of 26.3 times versus 20.2 times for the MSCI India index.

This outlook is part of a series being sponsored by Templeton Emerging Markets Investment Trust. For more information on the trust, visit www.temit.co.uk

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