Postweek Report (14–18 May)

Increasing disposable income in rural areas bodes well for consumer companies

Consuming the consumption theme

According to a news report, the rise in importance of rural votes is expected to continue to attract investors towards the consumption theme. Brokerage firm UBS believes that stocks with rural exposure will continue to do well due to continued policy focus towards the rural and agriculture sector. Improving disposable income in rural areas in the medium-term bodes well for companies that derive sizeable revenues from the rural market. Foreign brokerage firm CLSA has also recommended rising weights in consumption plays.

You can play the consumption theme by buying The Great Indian Middle Class smallcase. The smallcase includes companies that are expected to benefit from growth in consumption resulting from increased disposable income.

The smallcase has returned 34.35% over the previous year compared to Nifty returns of 12.38%.

Read more about investing in this theme in our postweek report.

EV ecosystem in the news again

As part of go-green 2022 roadmap, the Union Ministry of Home Affairs (MHA) is planning to switch to electric vehicles and replace diesel guzzling vehicles, including heavy trucks and buses. The Power Ministry has offered to supply electric cars to Central Government departments, which can either lease or purchase them.

Auto makers Tata Motors and Mahindra & Mahindra are also reportedly interested in setting up charging infrastructure for electric vehicles.

These companies are part of the Electric Mobility smallcase. Benefit from the growth of the electric vehicle ecosystem by buying the smallcase. The smallcase has returned 28.04% over the previous year compared to Nifty returns of 12.38%.

Read more about investing in electric mobility in our postweek report.