‘Domestic consumption is the sector to be in,’ says Zerodha's Nikhil Kamath

Nikhil Kamath, Co-Founder of the online brokerage platform Zerodha, believes that domestic consumption is the sector to invest in and that this particular arena will take great strides in the coming decades. 

On Monday, Kamath shared a post on Twitter about how reducing corporate debt indicates the possibility of higher capital expenditure (capex) by companies and lucrative investment opportunities going ahead.

He wrote, “Lower #corporate debt and a #household savings rate which is trending down could mean domestic consumption is the sector to be in the coming decade.”

“It's strange that so few domestic #consumption stories have scaled to 1000cr plus sales hitherto,” he added.

He also shared a picture which indicated that Indian households have been cutting debt faster than other emerging markets since the year 2021.

The shared picture shows how India's household debt as a percentage of GDP in 2008 stood at 42 per cent, which dropped to 35.5 per cent in 2022. On the other hand, government debt as a percentage of GDP rose to 82 per cent in 2022 from 71.6 per cent in 2008. Corporate debt dropped from 107.3 per cent in 2008 to 87.7 per cent in 2022.

The consumption section came under the radar recently because of rising inflation. However, industry experts and analysts believe India's consumption story is intact because of the country's economic resilience. Even government data shared on May 12 showed that India's retail inflation fell to an 18-month low of 4.7 per cent in April, mainly due to cooling food prices.

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