Why Manufacturing?

We believe that 2021 = 2003. Let us remind you that entire m-cap of cap good sectors surged 14.5x from 2003 to 2008. Co stock prices moved up by 15-20 times in 4 years. After a gap of almost 10 years, we are seeing private sector capex surging and govt doing all the right actions to propel India as next manufacturing destination for the world. Supply side has gone down with few leaders controlling the sector, NPA cycle is down, deleveraging has happened & now after a long-time investment cycle is picking which is reflected in the credit growth number of financials. With capacity utilization lower, there is huge operating leverage to be played in the manufacturing cycle. Manufacturing sector growth from 15% of India’s GDP to 20% and it could be USD 1 trillion soon. All this will help in employment generation + reduce import dependency and has huge export potential. This is not a quarter story for us but a sector to bet for next 3-5 years.