Platform Companies Are Here to Stay
On asking Ved what structural themes investors should hold in their core portfolios for the next 10–15 years, especially with the rise of consumption tech and multiple new listings in that space.
Ved said, “I think so. I mean, the so-called platform companies or consumer tech companies have done really well and I think that they are a great alternative to the traditional consumer plays that we had because there is hardly any growth.”
He explained that these tech platforms are aggregating demand and supply while offering a phenomenal consumer experience — a trend unlikely to fade anytime soon. “I see a lot of these companies becoming really big in India. So, we continue to be bullish on the platform companies,” he said.
However, Ved cautioned that this is a “winner-takes-it-all” space. “It is more likely to be the number one, maybe the number two player at best. There is hardly going to be a number three, number four in this. So, as long as you are with the best guy, the best execution, the best scalability, the best profitability, that is where disproportionate money is going to be made,” he explained.
Profitability Concerns: Margins vs. Growth
On the issue of shrinking margins as tech firms expand deeper into India, Ved pointed out that profitability is a function of growth. “Margins getting diluted are a function of growth. So, if tomorrow they decide to pull back their growth, margins will come back rapidly. But I do not think that is what these companies want to do,” he said.
He emphasized that platform companies are focused on capturing market share quickly — unlike traditional FMCG giants such as HUL, ITC, or Marico, which took decades to build deep distribution networks. “These companies are in a hurry. They want to cover the wide space very quickly and once unit economics is established, they know that once they get the volumes, the operating leverage should play out,” Ved added.
According to him, as these companies move from metro to Tier II and Tier III towns, while ticket sizes may shrink, costs also fall — from real estate to manpower. “Indian entrepreneurs are very smart. They will figure out a model which will work for them,” he said.
Ved also reflected on how quick commerce reshaped consumer behavior. “I did not initially think that 10-minute delivery is such a great thing… but this was a case of supply creating its own demand. Once the convenience was available, people got hooked,” he remarked.
Transition from Traditional to New-Age Sectors
Ved believes India is in a transitional phase where old structures are giving way to the new — driven by technology, changing lifestyles, and rising per capita incomes.
ET Now asked if he still sees opportunities in niche NBFCs and capital market players, given how well-discovered the theme has become. Ved agreed but added context. “Yes, it is now well established and well discovered than let us say when we were talking about it two-three years ago. But the fact still remains that if you look at overall credit growth, you want to be with the bigger banks because that is where there is quality, safety, scale,” he said.
However, he pointed out the limitation of growth for large banks — which generally track system credit growth at around 9–10%. “You cannot grow 700–800 basis points more than system growth unless you are a very small lender and then you do not want to be with the small lender,” Ved explained.
India’s Shift from Savers to Investors
According to Ved, India’s shift toward financial assets remains a powerful secular theme. Quoting Uday Kotak, he noted, “We are moving from being a nation of savers to a nation of investors.”
Despite the surge in demat accounts, Ved believes there’s still a long way to go. “Household savings into equities is still just about barely touching double digits. Fixed deposits still form a very large part of people’s savings. So, this financialization of savings is going to be still a very big theme,” he said.
Ved also highlighted the rapid wealth creation in India. “The fastest growing number of billionaires is in India, now no longer in China. So much wealth is being created and this wealth will need to be managed,” he pointed out.
Asset managers, wealth managers, and exchanges, according to him, will be key beneficiaries of this structural shift. “There is extremely good operating leverage in businesses like asset management or wealth management because after a point in time your fixed costs do not go up and everything flows to the bottom line. You cannot have a better return on capital, a better operating leverage business,” Ved concluded.
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