Motilal Oswal Asset Management Company Ltd. (MOAMC) is a public limited company incorporated under the Companies Act, 1956 on November 14, 2008, having its Registered Office at 10th Floor, Motilal Oswal Tower, Rahimtullah Sayani Road, Opposite Parel ST Depot, Prabhadevi, Mumbai - 400025.
Motilal Oswal Asset Management Company Ltd. has been appointed as the Investment Manager to Motilal Oswal Mutual Fund by the Trustee vide Investment Management Agreement (IMA) dated May 21, 2009, executed between Motilal Oswal Trustee Company Ltd. and Motilal Oswal Asset Management Company Ltd.
Close
NAV
Motilal Oswal Asset Allocation Passive Fund of Fund – Aggressive (G) - 10.079Motilal Oswal Asset Allocation Passive Fund of Fund – Aggressive-Dir (G) - 10.0848Motilal Oswal Asset Allocation Passive Fund of Fund – Conservative (G) - 10.1205Motilal Oswal Asset Allocation Passive Fund of Fund – Conservative-Dir(G) - 10.1271Motilal Oswal Dynamic Fund (Div-A) - 13.0364Motilal Oswal Dynamic Fund (Div-Q) - 11.6756Motilal Oswal Dynamic Fund (G) - 14.3849Motilal Oswal Dynamic Fund-Dir (Div-A) - 13.169Motilal Oswal Dynamic Fund-Dir (Div-Q) - 11.8091Motilal Oswal Dynamic Fund-Dir (G) - 15.1536Motilal Oswal Equity Hybrid Fund - Direct (G) - 14.1436Motilal Oswal Equity Hybrid Fund - Regular (G) - 13.5643Motilal Oswal Flexi Cap Fund(D) - 23.0148Motilal Oswal Flexi Cap Fund(G) - 30.6172Motilal Oswal Flexi Cap Fund-Dir(D) - 22.9964Motilal Oswal Flexi Cap Fund-Dir(G) - 32.7082Motilal Oswal Focused 25 Fund - Direct (D) - 18.9481Motilal Oswal Focused 25 Fund - Direct (G) - 32.3673Motilal Oswal Focused 25 Fund (D) - 17.0761Motilal Oswal Focused 25 Fund (G) - 29.0949Motilal Oswal Large and Midcap Fund - Dir (D) - 13.275Motilal Oswal Large and Midcap Fund - Dir (G) - 13.275Motilal Oswal Large and Midcap Fund (D) - 12.9302Motilal Oswal Large and Midcap Fund (G) - 12.9301Motilal Oswal Liquid Fund - Direct (Div-D) RI - 10.0077Motilal Oswal Liquid Fund - Direct (Div-F) RI - 10.0133Motilal Oswal Liquid Fund - Direct (Div-M) - 10.0499Motilal Oswal Liquid Fund - Direct (Div-Q) - 10.0231Motilal Oswal Liquid Fund - Direct (Div-W) RI - 10.0083Motilal Oswal Liquid Fund - Direct (G) - 11.0535Motilal Oswal Liquid Fund - Regular (Div-D) RI - 10.0055Motilal Oswal Liquid Fund - Regular (Div-F) RI - 10.0127Motilal Oswal Liquid Fund - Regular (Div-M) - 10.0488Motilal Oswal Liquid Fund - Regular (Div-Q) - 10.0223Motilal Oswal Liquid Fund - Regular (Div-W) RI - 10.0153Motilal Oswal Liquid Fund - Regular (G) - 11.0148Motilal Oswal Long Term Equity Fund (D) - 16.9352Motilal Oswal Long Term Equity Fund (G) - 21.558Motilal Oswal Long Term Equity Fund -Dir (D) - 20.1029Motilal Oswal Long Term Equity Fund -Dir (G) - 23.455Motilal Oswal Midcap 30 Fund (D) - 19.0281Motilal Oswal Midcap 30 Fund (G) - 31.1479Motilal Oswal Midcap 30 Fund-Dir (D) - 19.6084Motilal Oswal Midcap 30 Fund-Dir (G) - 34.0448Motilal Oswal Multi Asset Fund - Direct (G) - 10.5855Motilal Oswal Multi Asset Fund (G) - 10.4732Motilal Oswal Nasdaq 100 FOF - Direct (G) - 22.236Motilal Oswal Nasdaq 100 FOF - Regular (G) - 22.0246Motilal Oswal Nifty 50 Index Fund - Direct (G) - 11.8701Motilal Oswal Nifty 50 Index Fund (G) - 11.8072Motilal Oswal Nifty 500 Fund - Direct (G) - 13.6001Motilal Oswal Nifty 500 Fund (G) - 13.4578Motilal Oswal Nifty Bank Index Fund - Direct (G) - 11.3131Motilal Oswal Nifty Bank Index Fund (G) - 11.1954Motilal Oswal Nifty Midcap 150 Index Fund (G) - 15.4573Motilal Oswal Nifty Midcap 150 Index Fund-Dir (G) - 15.6207Motilal Oswal Nifty Next 50 Index Fund - Dir (G) - 11.9437Motilal Oswal Nifty Next 50 Index Fund (G) - 11.8418Motilal Oswal Nifty Smallcap 250 Index Fund (G) - 15.1555Motilal Oswal Nifty Smallcap 250 Index Fund-Dir(G) - 15.3163Motilal Oswal S&P 500 Index Fund - Direct (G) - 14.1853Motilal Oswal S&P 500 Index Fund (G) - 14.0886Motilal Oswal Ultra Short Term Fund - Dir (Div-D) - 9.8605Motilal Oswal Ultra Short Term Fund - Dir (Div-F) - 9.881Motilal Oswal Ultra Short Term Fund - Dir (Div-M) - 9.8675Motilal Oswal Ultra Short Term Fund - Dir (Div-Q) - 10.0093Motilal Oswal Ultra Short Term Fund - Dir (Div-W) - 9.8714Motilal Oswal Ultra Short Term Fund - Dir (G) - 13.9715Motilal Oswal Ultra Short Term Fund (Div-D) - 9.8399Motilal Oswal Ultra Short Term Fund (Div-F) - 9.8504Motilal Oswal Ultra Short Term Fund (Div-M) - 9.8403Motilal Oswal Ultra Short Term Fund (Div-Q) - 9.9835Motilal Oswal Ultra Short Term Fund (Div-W) - 9.8433Motilal Oswal Ultra Short Term Fund (G) - 13.5527

Thinking Laterally

Blog Blog Details
  • January 15, 2018
  • Atul Mehra|
  • Associate Fund Manager, PMS

Why Air Conditioners (ACs) as a category can absolutely take-off in terms of demand in India

**The units of ACs sold in India are ~4m units. If we compare this to categories like Passenger Vehicles sales in India, it is ~1x! It’s strange that a consumer category with a ticket size of mere INR30k sells equal number of units as another category which sells an INR6 lakh ticket product! Further, the aspiration levels / consumer strata for both products are quite similar.

**A comparison with personal mobility is even more compelling! If we look at the below table, ACs sold as a proportion of personal mobility (cars or two wheelers) in China is 1.7x (65m ACs sold vs 38m Cars + 2W). In comparison, ACs sold as a proportion of cars or two wheelers in India is 0.2x (4m ACs sold vs 19m Cars + 2W). Thus, the penetration of ACs as a proportion of personal mobility is 9.2x in China vs India!

Units (m)

Cars

2W

Cars + 2W

China

20

18

38

India

3

16

19

Multiple (x)

             7.1

             1.1

                   2.0

Units (m)

AC/Car

AC/2W

AC/2W or Car

China

3.3

3.6

1.7

India

1.3

0.2

0.2

Multiple (x)

             2.6

          16.6

                   9.2

**Easy availability of consumer financing / penetration of e-commerce (Consumer Credit, Credit Cards, Bank EMI on online purchases) are enablers which will accelerate the growth and penetration of Air Conditioners in India. Further, with e-commerce, distribution for ACs improves further (In China, ~20% of AC sales for Midea comes from online).

 **Better electricity availability: With the Indian power situation going from a deficit to surplus, (reflected in merchant rates have crashed over the years to INR2-2.5 vs past rates of INR6-7), the peak demand is better addressed which increases the propensity for consumers to purchase high power consuming durables like ACs.

**India tropically being high temperature geography creates a natural demand for air conditioners.

**More power efficient products (Invertor ACs) reduce the running costs by 30-35% even as the upfront cost increases by 20-25%, thus resulting in payback of incremental invertor cost in 1-2 year or so for consumers who have round the year usage.

**Higher incomes and declining interest rates are broad macro enablers which can accelerate demand.

A comparison with China

**The Chinese AC market is ~USD30b in terms of size which is ~19x the Indian market size currently. The size delta (China v India) is highest for Air Conditioners (ACs) as product category vs Refrigerators (RF) / Washing Machines (WM).

USD b

AC

RF

WM

China

28.0

21.3

8.1

India

1.5

2.5

1.3

Multiple (x)

          18.7

             8.5

             6.2

Units (m)

AC

RF

WM

China

65

75

38

India

4

9

6

Multiple (x)

16.3

             8.5

             6.2

China consumer durable penetration chart – Insight on how ACs as a category has surpassed other durable categories in China

**Our thesis is that Indian AC market, being least penetrated (most discretionary), and being multi-use (3-4/household) vs other durable products like Refrigerators or Washing Machines (which at a maximum are single use (1/household) has the longest growth runway ahead of it.

**A parallel to our thesis actually visible in this chart for China (as shown above), where highest growth for ACs is actually playing out. See the intersection of AC penetration (green line) over other categories (blue line / red line).

**In India, AC penetration stands at 4% vs 100% in China and vs 10-20% penetration in other consumer durable categories in India, implying highest growth potential!


Cumulatively, our sense is over the next few years (~10 years), the growth for ACs as a category can be the highest amongst consumer durables, perhaps posting a CAGR of 15-20% over the next decade.

Data as on 1/10/2018
Source MOAMC Research

Disclaimer:

This article is prepared on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this document is for general purposes only and not a complete disclosure of every material fact. The Sectors mentioned herein is for explaining the concept and shall not be construed as an investment, legal or taxation advice to any party. It should not be used for development or implementation of an investment strategy. This article does not constitute an offer, invitation or inducement to invest in securities or other investments and Motilal Oswal AMC and its affiliates/associates (hereinafter called Motilal Oswal Group) is not soliciting any action based upon it. The statements contained herein may include statements of future expectations and other forward-looking statements that are based on our current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. This article does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual clients. Before acting on any advice or recommendation in this presentation, investors should consider whether it is suitable for their particular circumstances and, if necessary, seek professional advice. The price and value of the investments referred to in this article and the income from them may go down as well as up, and investors may realize losses on any investments. Past performance is not a guide for future performance, future returns are not guaranteed and a loss of original capital may occur. Readers shall be fully responsible / liable for any decision taken on the basis of this article. Investments in Securities are subject to market and other risks and there is no assurance or guarantee that the objectives of any of the scheme/strategies will be achieved. The sectors presented here may or may not be part of our portfolio/strategy/schemes.



“Reproduced from original article written for cnbctv18.com; published on June 14, 2019”


"Don’t know which fund to buy? Now, you can buy the market!" - Click Here



Share this articles
  • FB Comments
Newsletter
Connect with us
+91-22 40548002 | 8108622222
CIN-U67120MH2008PLC188186

Mutual Fund investments are subject to market risks, read all scheme related documents carefully

KYC is one time exercise while dealing in securities markets - once KYC is done through a SEBI registered intermediary (broker, DP, Mutual Fund etc), you need not undergo the same process again when you approach another intermediary

Site best viewed in IE 9.0+, Mozila Firefox 4.0+ and Google Chrome at 1024 x 768 pixels resolution