Recent falls in Indian stocks have created opportunities to invest in some long-term growth stories at attractive prices.
India has been one of the world's fastest-growing major economies in recent years and this rapid economic growth is changing how its 1.4 billion people spend and save. As household incomes rise and more people move into the middle class, demand is growing for everything from convenient ways to shop and eat to insurance and branded consumer goods.
These long-term shifts are creating opportunities for Indian stocks that can capture a growing share of consumer spending, particularly those with strong brands, wide customer reach and plenty of room to grow.
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At JPMorgan India Growth & Income, we focus on finding high-quality companies with the potential to benefit over the long term. Here are three examples.
Three Indian stocks for your portfolio
Zomato (Mumbai: ETERNAL) is one of India's leading online food delivery and restaurant discovery platforms, connecting consumers with restaurants and delivery partners across the country. As more Indians move to towns and cities and become comfortable ordering online, the company has grown rapidly, building a large customer base, an extensive restaurant network and more than 400,000 delivery partners.
Zomato's size gives it an important advantage, and its Blinkit business is also tapping into another fast-growing habit, offering rapid delivery of groceries and everyday essentials. Rising incomes, growing smartphone use and increasingly busy urban lifestyles are all helping India's food-delivery market to expand. With an established technology and delivery network, we believe Zomato (which trades under its parent name Eternal) is well placed to capture more of this spending as consumers increasingly prioritise convenience.
SBI Life Insurance (Mumbai: SBILIFE) is one of India's leading life insurance companies, offering a broad range of insurance and savings products. Its close relationship with State Bank of India, one of the country's largest banks, gives it access to an extensive branch and customer network, helping it reach a large pool of potential customers across the country. Insurance remains relatively underused in India, leaving considerable room for the market to grow.
Many Indian households still favour traditional ways of saving, but rising incomes and growing financial awareness are gradually changing these habits. As India’s middle class expands, more consumers are looking to protect their families and plan for retirement. With its strong distribution network and record of growing faster than many of its peers, SBI Life is well placed to capture this rising demand.
Varun Beverages (Mumbai: VBL) is India's largest PepsiCo bottler, manufacturing and distributing brands including Pepsi, 7Up and Mountain Dew. It operates in one of India's fastest-growing consumer categories, yet soft-drink consumption in India remains relatively low compared with other markets, leaving significant room for growth as incomes and spending rise.
Varun Beverages has built an extensive manufacturing and distribution network, helping it reach consumers across India's many cities, towns and rural areas. As the business grows, this scale also helps it produce and distribute drinks more efficiently. Combined with a strong record of execution, we believe Varun Beverages is well placed to continue growing as more Indian consumers spend on branded drinks.
India's recent market weakness shouldn't overshadow its long-term growth potential. As incomes rise and consumer and financial habits evolve, well-positioned companies have an opportunity to grow alongside the country's consumers and turn its economic expansion into attractive returns for shareholders.
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