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November 1, 2016 | Global Equity
India: An Emerging Market Standout

Portfolio Manager

Casey Preyss, CFA, partner, is a portfolio manager for William Blair’s Emerging Markets Growth, Emerging Markets Small Cap Growth, and China A-Shares Growth strategies. Since joining William Blair in 2000, he has been a research analyst covering industrials, IT, and resources stocks. Before taking on fundamental research responsibilities for William Blair’s global equity team, Casey was a quantitative analyst. Before joining the firm, he was an international equity research sales associate with Thomas White International. He received a B.S.B.A. from The Ohio State University and an M.B.A. from the University of Chicago’s Booth School of Business.

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As we noted in earlier blog posts, emerging markets have experienced a long spell of gloom, but we believe their underperformance relative to developed markets has run its course, thanks to valuations, flows, dollar strength, corporate performance, and China’s ongoing rebalancing. But India also continues to stand out.

India is a market that we have been positive about for the last few years, in part because its gross domestic product (GDP) growth has accelerated while GDP in the rest of the world has remained relatively stagnant. India is now the fastest-growing major economy in the world, surpassing China for the first time in a generation, with close to 8% growth.

Key drivers of the favorable environment have been a pro-reform government in addition to lower oil prices, inflation, interest rates, input costs, and taxes. As a result, operating margins have expanded and growth in earnings per share has accelerated.

We have continued to find attractive investment opportunities in India, largely because of these favorable tailwinds, but also because of good corporate governance and overall management quality that stands out within the emerging market universe.

One example of a longer-term growth opportunity we’re excited about in India is personal-care products, such as toothpaste, hair care products, basic consumer staples. The chart below shows why: Per-capita spending in India on personal care products is less than $10 per year. Brazil, in contrast, spends approximately $150 per year. We believe this bodes well for the growth potential in Indian consumer companies.

 

Portfolio Manager

Casey Preyss, CFA, partner, is a portfolio manager for William Blair’s Emerging Markets Growth, Emerging Markets Small Cap Growth, and China A-Shares Growth strategies. Since joining William Blair in 2000, he has been a research analyst covering industrials, IT, and resources stocks. Before taking on fundamental research responsibilities for William Blair’s global equity team, Casey was a quantitative analyst. Before joining the firm, he was an international equity research sales associate with Thomas White International. He received a B.S.B.A. from The Ohio State University and an M.B.A. from the University of Chicago’s Booth School of Business.

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