Comments by "M Shastri" (@libshastra) on "Why some of India’s consumption story is worse than pre-COVID levels" video.

It’s weird. If you look at bike sales, the consumption data looks quite different. Pulsar 200-250 range has 1000% yoy growth but Pulsar 150 saw a -30% growth. CT saw a 90% growth in sales but platina saw drop in it’s growth from the previous years ~50% to 30% this year. TVS has posted similar numbers. Tractor sales were flat at -4% after the previous years (22-23) sales growth of 12% with M&M saying they saw growth in sales to mining and construction sector. Market is going through a churn. Also I think FMCG may no longer be indicator of consumption, I think it’s growth has peaked a while ago.
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⁠ @sarthakshende9 I invest in Infra and adjacent sectors. I believe people don’t think the middle bike segment as aspirational anymore. It’s a similar story for cars, Alto sales have been flat but every other model is seeing double sometimes triple digit growth. I know every manufacturer is seeing massive growth in heavy equipment sales, with announcements for capacity expansions. Plus, stock market domestic investors investing has seen double digit growth. I just think there’s a churn going on. To me it says there’s a massive restructuring going on.
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@sarthakshende9 EPFO numbers have actually been robust. An average of 1.2 million net additions and most of them from 18-25 and 26-40 is shows resilient growth. Assuming we need 18 million jobs/year EPFO data says our formal sector is close to creating jobs to cover that demand for jobs. I don’t buy the noise around unemployment - unemployment in India always means underemployment. Does not mean people are jobless but rather they are working in unproductive sectors.
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@sarthakshende9 no India is an infra deficit country. We actually have a problem of capacity. If BJP comes back then you will see sustained growth in the sector. The issue with infrastructure has more to do with cash flow rather than profit. As long as infrastructure companies have solid order books it’s sustainable, I’d really start worrying when order books slows down. That means all that cash flow issues becomes serious crisis. Most infrastructure players work on a hand to mouth basis - the incoming order book helps their margins. Yes politics is an issue but even politicians are slowly starting to see the business value in infra - that change of mindset is helping the sector become more sustainable.
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@sarthakshende9 to me, it means manufacturers need you improve on their offerings in the mid bike segment. Market does not want to pay for a cosmetic upgrade that costs 10-15% than the base model.
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@Mandy12_12 Yes, atm private investment is delinked from private consumption, announced investments are towards adding more capacity. There was capacity under utilization until recently (In FY23 - utilization was around mid 70s, they need to hit above 80%) so profits were "reinvested" in reducing corporate debts, cleaning up their balance sheets (Good move IMO). However, Private companies won't invest until after the election and it will accelerate when US Fed interest rates start dropping.
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@Mandy12_12 here take your Rs. 2 and scurry away to someone else’s comments.
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I’m not sure it will lead to higher consumption in FMCG which is what TCA and Radhika are concerned about the most. I think we are looking at a transition away from FMCG as indicator of consumption to some other sector.
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