Building materials best proxy for playing real estate upcycle: Siddhant Chhabria, Mirae Asset
In the consumption theme, Siddhant Chhabria, Fund Manager at Mirae Asset Investment Manager, says he is overweight consumer discretionary, new-age and building materials. “We are also bullish on real estate upcycle and believe building materials is the best proxy to play the upcycle. New age businesses provide a longer runway for growth and most of these companies are now pivoting towards profitability,” he says. Edited excerpts from a chat:
What are your key observations from the Household Consumption Expenditure Survey, especially given there has been a slowdown in the sector?
Siddhant Chhabria: As per the Household Consumption Expenditure Survey 2012-23, there are 3 key takeaways:
Real consumption growth moderated to 8.8% CAGR in 2012-23 from 13.3% CAGR in 2005-12. Consumption growth is linked to GDP growth which itself has moderated from 7.3% in FY2005-12 to 5.7% in FY2012-23, primarily due to the Covid shock. Still, the share of consumption within GDP rose from 56.2% in FY12 to 58.5% in FY23.
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Rural consumption grew faster in the last decade. Rural spends grew by 9.2% CAGR vs urban at 8.5% CAGR. While the absolute level of spend of urban India is higher, rural India’s spending has grown faster in the last decade. This has narrowed the gap in the rural-urban
