Synopsis
Indian consumer demand shows surprising strength, with auto sales exceeding expectations across both traditional and electric vehicles. Exports, particularly in two-wheelers, are a key growth driver. Fund manager Sachin Relekar sees opportunities in auto OEMs with strong product cycles, ancillaries diversifying into new sectors, and companies benefiting from the energy transition and AI buildout. He remains bullish on financials but cautious on IT.
ETMarkets.com India’s consumer discretionary demand is proving far more resilient than expected, says Sachin Relekar, Senior Equity Fund Manager at Axis Mutual Fund. Speaking to ET Now, he pointed to recent
auto sales data as a key signal of underlying economic strength, even as the first quarter was clouded by geopolitical tensions and rising fuel costs.
Auto sales beat expectations across the board Relekar noted that both internal combustion engine (ICE) vehicles and EVs have shown strong resilience despite headwinds. Particularly notable is export performance in the two-wheeler segment, where companies are no longer relying solely on cyclical domestic demand but are successfully breaking into new geographies such as South America and Latin America. He expects this strength to extend into consumer retail financing companies as well.
Where the best risk-reward lies in auto
Relekar splits his auto investment thesis into two buckets. Among original equipment manufacturers (OEMs), he favors companies riding strong product cycles and favorable geographic mixes, particularly those with powertrain-agnostic positioning that lets them capture growth in both ICE and EV segments. Within this, he highlighted SUVs as a still-expanding part of the passenger vehicle segment and scooters as a growing category within two-wheelers, with EVs outperforming within that space.
For auto ancillaries, Relekar is watching companies that can leverage their manufacturing expertise to diversify into adjacent sectors like consumer electronics, defence, or aviation — areas aligned with government policy focus and offering potential for valuation re-rating.
Two-wheelers lead the export story When asked specifically about export plays, Relekar pointed to two-wheelers as the clearest opportunity, citing growing revenue share, better margins from an improving product mix, and favorable currency tailwinds. Non-auto manufacturing opportunities within the ancillary space are also increasingly export-oriented, he added.
Energy transition and AI buildout remain strong convictions Beyond autos, Relekar flagged energy intensity and the broader energy transition, closely tied to AI infrastructure buildout, as a theme he expects to remain strong for a visible period, expressed thro
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