'No consumption slowdown in India, just shifting demand,' says PPFAS CIO Rajeev Thakkar

Rajeev Thakkar, CIO of PPFAS, challenged the prevailing narrative of a consumption slowdown in India, arguing instead that changing consumer behavior and intense competition are distorting perceptions.

"There is no aggregate demand problem—only a shift in what consumers are buying," he said. "When someone orders biryani on a food delivery app, they’re not buying instant noodles. A streaming subscription replaces a movie ticket. A D2C shoe order doesn’t translate into a sale for a traditional retailer."

Thakkar pointed to robust demand in discretionary categories like concert tickets and IPO subscriptions as evidence of healthy consumer spending. He argued that sectors like Bollywood and traditional retail are struggling not due to lack of demand but because they haven't aligned their value proposition with evolving preferences.

He emphasized that India's GDP growth reflects strong momentum on both the investment and consumption sides. "When companies struggle, it’s often due to poor positioning or market saturation—not macro weakness," he said.

According to Thakkar, PPFAS is focusing on businesses with strong pricing power and moderate competition. "Volume growth without profitability is meaningless. A big-box retailer may show double-digit volume growth, but if margins shrink due to crowded competition—like in the hyper-competitive grocery space—profitability suffers."

Thakkar concluded by noting that across sectors—from paints to retail—slowdowns are often a result of excessive competition, not consumer fatigue. "We're investing where competition is rationalizing and value creation is still possible."