Digital platforms, autos, and a shifting consumption story: Ashi Anand maps the market’s next phase

Synopsis

India's equity markets are seeing a leadership shift, with digital platforms and select auto segments driving growth. Ashi Anand of IME Capital highlights digital platforms as the decade's biggest opportunity due to scalability and operating leverage. While autos benefit from policy tailwinds, consumption shows diverging trends, and IT services face AI-driven uncertainty.

India’s equity markets are witnessing a decisive shift in leadership, with digital platforms, select auto segments, and niche consumption themes shaping investor conversations. In a recent interaction with ET Now, Ashi Anand, Founder & CEO at IME Capital, laid out a clear framework for where long-term value could emerge—and where caution still prevails.

Digital Platforms: The Decade’s Biggest Opportunity

Ashi Anand remains firmly constructive on platform businesses, particularly in internet and quick commerce segments. He believes these companies are at the centre of a structural transformation underway in India’s economy.

“So, clearly, and we have been quite vocal about this, we continue to see this as the most attractive active value creation opportunity in India over the coming decade. The core investment thesis is that there is a tremendous level of value migration happening across industries, away from traditional businesses towards such digital-first platforms.”

The logic, according to Anand, is rooted in scalability and operating leverage. As transactions shift online, these platforms grow rapidly, while their cost structures stabilise over time.

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“As more and more business transactions start moving towards these platforms, not only do these companies scale—and scale actually very dramatically—but a large part of the cost of building out the business is involved in attracting initial customers and getting them to transact. A lot of these costs can stabilise very significantly as you go along.”

This combination of sustained revenue growth and controlled costs is expected to drive strong profitability in the medium term.

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Referring to Eternal’s recent performance, Anand noted that the company’s results validate the broader platform thesis.

“Eternal continues to grow. You have seen the food delivery business, which was a bit muted in terms of growth for a couple of quarters—that growth has started to come back quite strongly.”

Quick commerce, despite concerns about moderating growth rates, continues to deliver robust expansion.

“They were clocking a 100% plus growth rate. They are now talking about a 60% annualised growth over the next three years. It is important to understand that while growth rates are coming off, it is off a much higher base, and therefore absolute levels of growth are very attractive.”

One of the standout highlights has been Blinkit’s profitability trajectory.

“You are seeing a clear distinction here... Blinkit has been a big positive surprise in terms of how quickly they have been able to achieve adjusted EBITDA breakeven.”

Anand pointed out that the business could scale meaningfully in the coming years.

“You are talking about a billion dollars of profitability coming as early as 2029. This is a business that did not exist four to five years ago.”

Autos Back in Focus After Policy Tailwinds

Beyond digital platforms, Anand highlighted a renewed opportunity in the auto sector, driven by a confluence of macro and policy triggers.

“We introduced auto into our portfolios post the GST cut. What you are seeing is that a number of measures are coming together—it is GST cuts, income tax cuts at the start of the year, a fall in interest rates, and a pay commission which is due.”

These factors are expected to support a broader consumption recovery, with autos emerging as a key beneficiary.

“Auto naturally stands as the biggest beneficiary because GST has the biggest implication, and a big cut in the price of a discretionary product can drive demand quite strongly.”

Within the sector, Anand prefers passenger vehicles and farm equipment, while maintaining caution on two-wheelers due to the uncertainty around electric vehicle transitions.

“Our concern on two-wheelers is around the fact that it is likely to see the fastest shift towards EV, and the eventual market share dynamics and profitability are still fairly uncertain.”

He also flagged the commercial vehicle (CV) segment as a cyclical opportunity that could turn attractive at the right time.

Consumption: A Puzzle with Diverging Trends

India’s consumption story, however, is far from uniform. Anand described it as “a puzzle,” with sharp divergences across categories.

“There are certain parts of discretionary consumption that have been holding up incredibly well. Jewellery demand has remained strong despite very high gold prices. Travel and hospitality are also holding up quite well.”

But beyond these pockets, the picture is less encouraging.

“A lot of traditional retail players… are really struggling for like-to-like growth, and there has been a clear slowdown in overall growth.”

Post-pandemic behavioural shifts appear to be driving this divergence.

“After Covid, consumption behaviour seems to have changed. There seems to be a lot of spends that have moved towards real estate, travel, and jewellery, and it has come at the expense of some other categories.”

While early signs of recovery are emerging, broad-based discretionary growth remains muted for now.

IT Services: Waiting for Clarity in the AI Era

On the IT sector, Anand struck a cautious tone, citing uncertainty around the long-term impact of artificial intelligence.

“What you do not know as of today in IT services is the deflationary impact AI is going to have on overall businesses. AI is going to make employees a lot more productive… you can probably get a project done with a much smaller team.”

The key question, he said, is whether new demand can offset this efficiency-driven pressure. “For AI not to have a deflationary impact, what you need is a huge increase in workload. The point is not yet clear.” Until that visibility improves, markets may remain hesitant on the sector.

“Until you do not have clarity on that key point, IT services as a space is probably going to be largely ignored by markets. We clearly prefer internet platforms over traditional IT services companies.”

The Bigger Picture

The underlying message from Anand’s outlook is clear: India’s market leadership is evolving. Digital platforms are gaining structural strength, autos are benefiting from cyclical and policy tailwinds, and consumption trends are fragmenting in unexpected ways.

For investors, this is not a market to play broadly—but one that demands sharper, theme-driven positioning.

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(What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2025, Share Market on Budget 2025 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

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