“The focus of government has clearly shifted from capex to consumption. This was very much evident in the budget, and government has put up lot of efforts on capex in the last six years,” Duggad said in an interview with CNBC-TV18.
He highlighted that government capex has grown from ₹1.9 lakh crore six years ago to ₹10.2 lakh crore in FY25, but sustaining that pace was not feasible.
According to him, the recent income tax cuts, GST rationalisation, good monsoons, and festive demand are all expected to support consumption. “The potential one lakh crore of benefit through income tax reduction augurs well for consumption,” he added.
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However, he pointed out that consumption—especially staples—has been weak for the past decade. “It’s not just last one, two years phenomenon, as I keep repeating, there’s not a single consumer staple company in India which has given 10% topline compounding for last 10 years,” he said.While staples may see a short-term rebound, Duggad remains more optimistic about discretionary consumption over the next three to five years.
“From our point of view, we have been more bullish on consumer discretionaries for last four years, and that call continues from a next one to three-year point of view,” he said.
“Unlike in staples, where you have to still shuffle between seven eight companies, in discretionary you have 50 potential investable ideas. And my sense is that as we move forward in next three to five years, as our per capita moves from $2,800 towards $4,000, you will see another 50–100 ideas coming up and listing,” Duggad added.
Duggad also flagged strong opportunities in the electronic manufacturing services (EMS) space, naming Dixon Technologies, Kaynes Technology, and Amber Enterprises as preferred picks. “EMS as a pack, this quarter posted 58% earnings growth,” he noted.
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