MC Exclusive: Consolidation, the new wealth engine: Maran Govindasamy says the next wave of growth lies beyond the index

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India’s future wealth creation won’t mirror the current index. The next wave of multibaggers, says Maran Govindasamy, Founder of Unifi Capital, will come from sectors under-represented in the market today but ripe for consolidation.

“Tourism, hospitality, healthcare, entertainment, and home improvement — these are large economic segments, yet their representation in stock markets is minimal,” Govindasamy told Mahalakshmi on the Diwali Blockbuster edition of The Wealth Formula. “When industries are this fragmented, consolidation becomes the biggest driver of value creation.”

He points out that India’s index has always evolved with structural shifts. “In 1991, half of the Sensex was steel, cement, power, and textiles. There wasn’t a single IT or bank stock. By 2001, IT and pharma made up nearly half of the index. By 2021, financials alone were 40%. Ten years from now, that share will fall — not because banks will shrink, but because new sectors will grow faster.”

Govindasamy sees the next leaders emerging from businesses currently small, regional, and unorganized but scaling rapidly. “The largest hotel chain today has only 5–6% market share. That will change as consolidation takes hold. It’s what happened in broking — where the top 10 players went from 15% to 65% market share in a decade.”

He cautions that the best opportunities aren’t always the most obvious ones. “Wherever growth visibility is obvious, valuations are already high. But where uncertainty still prevails — those are the spaces trading cheap.”

His approach: build a diversified portfolio of 15–20 names across sectors with long-term structural drivers — urbanization, rising female workforce participation, and household income shifts from ₹60–80 lakh to ₹90 lakh and beyond. “These trends won’t change in one or two years. This is a 10–12 year journey,” he says.

Govindasamy adds that even within the consumer economy, investors must distinguish between near-term growth and long-term consolidation. “Some businesses like hotels and hospitals overlap both — they’re showing good earnings now and have long-term tailwinds. But the real opportunity lies in those where the next growth phase hasn’t yet reached the P&L.”

His advice: “Don’t chase sectors that have already rerated. Build conviction in those that are still under the radar. Be ready to be wrong in one or two — but right on the big trend.”