Motilal Oswal Consumption Fund: Potential for long term growth from consumption story

Motilal Oswal Mutual Fund has launched a new fund offer (NFO), Motilal Oswal Consumption Fund. Consumption is one of the most important mega-trends in the India Growth Story as India is largely a domestic consumption driven economy. In FY 2023-24, India's private final consumption expenditure (at constant 2011-12 prices) was around 56% of the GDP (source: Economic Survey). Although India is expected to become the third largest economy of the world by 2030, there is a long runway for per capita income and consumption growth in India. Consumption is a broad investment theme covering numerous industry sectors like FMCG, Consumer Durables, Consumer Services, Realty, Auto, Telecom, Healthcare, Power etc. Motilal Oswal Consumption Fund NFO opened for subscription on 1^st October 2025 and will close on 15^th October 2025.

Drivers of Consumption growth in India

• India is the fifth largest consumer market after United States, EU, China and Japan (source: World Bank, 2023). India's rural FMCG market is expected to grow to $100 billion by 2025. It is the second largest smartphone market in the world (projected to grow to $90 billion by 2032). India's food services market is estimated to grow $125 billion by 2029. We are the largest 2-wheeler market in the world, mainly driven by rural and semi urban demand.
  
  

  

  Source: Visual Capitalist, World Data Lab; A consumer is classified as someone who spends at least $12/day. 2024 & 2030 figures are estimates. Past performance may or may not be sustained in the future. The above data/graph is used to explain the concept and is for illustration purpose only and should not be used for development or implementation of an investment strategy.



• Rising income on a per capita basis is the main driver of consumption growth in India. Rising Per Capita GDP leads to rising disposable income. First it reflects in higher discretionary spending, followed by premiumization. It may also lead to higher access and usage of credit for consumption financing. India's per capita GDP grew from sub $1,000 levels in the mid-2000s to around $2,857 in 2024 (source: PHD Research Bureau). Over the next 23 years, per capita is expected to grow at around 8.7% to $19,416 by 2047.
  
  

  

  Source: MOSL PHD Research Bureau



• As income rises, the share of income spent on food falls - freeing up wallet for discretionary spends. Since there is more disposable income available for discretionary spends, there is huge room for growth in various sectors of the industry. (see the data represented in the chart below)
  
  

  

  Source: MOSL MF. Industry Reports, Company. Calculations Internal



• The discretionary consumption penetration in India has a huge gap vs China & other developed economy, as demonstrated in the chart below. This provides more opportunities for a boost to discretionary consumption spends leading to a potential 5X times growth in this sector in the coming decades.
  
  

  

  Source: MOSL product presentation. Capitaline. Calculations Internal. Universe Top 500 Companies by Market Cap as on August 2025



• Credit penetration in India lags behind global peers presenting a high potential for credit cards usage. This in turn presents opportunities for the formalisation of Credit Markets and scope for supporting consumption. The charts below show a comparison of the credit card penetration in India Vs other developed economies, and the growth of the number of credit cards in force since 2022 to a projection in the next 5 years or so.
  
  

  

  Source: MOSL Product Presentation TechSci, BCG, NASSCOM, RBI, PwC.

Growth of Consumption theme

• Barring FY21 due to abnormal results post Covid-19 (Consumption Profit Growth 102% and Non-consumption 27%), Consumption has been a high growth segment as shown in the chart below.
  
  

  

  Source: Capitaline. Calculations Internal. Universe Top 500 Companies by Market Cap as on August 2025.



• Below is a snapshot of the major changes that has occurred in the consumption trends over time, in industries spanning food, home & living, fashion and apparels, technology, Automobiles and finance.
  
  

  

  Source: MOAMC Internal. Past performance may or may not be sustained in the future. The above data/graph is used to explain the concept and is for illustration purpose only and should not be used for development or implementation of an investment strategy.



• With changing trends, we have witnessed a growth in most segments like digital spends, jewellery market, consumer durables like room air conditioners and electric vehicles usage, in consumer spending. (See the graphs below which represent this growth). The Indian domestic jewellery market size grew from 32% in 2020 to 43% in 2024. In digital spends, UPI transactions clocked the highest CAGR of ~53%. The EV segment has grown phenomenally in volume since 2020 and is further expected to grow to a 15.3 million units by FY 2030. Given also is a chart that represents the penetration of the consumer durables and FMCG in India in the 2025
  
  

  

  Source: MOSL MF product presentation

Motilal Oswal Consumption Fund

The Motilal Oswal Consumption Fund is a thematic fund which will invest in stocks related to the "India consumption theme". The primary objective of the Scheme is to generate long-term capital appreciation by investing predominantly in equity and equity-related securities of companies engaged in consumption and consumption-related activities. The NFO opened for subscription on 1^st October 2025 and will close on 15^th October 2025.

Investment Strategy of Motilal Oswal Consumption Fund

The fund managers follow a differentiated portfolio position to offer diversification within the consumption theme. ( see graphic)

Source; MOSL MF Product presentation

Why should you invest in the Motilal Oswal Consumption Fund?

• Motilal Oswal Mutual Fund is a high quality & high growth focused fund house. It follows the QGLP framework for stock selection. The QGLP strategy emphasizes investments in companies with a high quality of business and management, strong earnings growth potential, sustainable longevity, and attractive price valuations.
  
  

  

  Source: MOSL MF product presentation



• Risk Management Framework, a proprietary framework for measuring triggers is adopted
  
  

  

Why invest in consumption theme now?

• Ability to participate in structural India Growth Story - Rising disposable income, value migration, premiumisation


• Capitalize on world's largest middle-class advancement journey


• Engage in growth and new emerging growth opportunities


• Pricing power and cash-flow visibility


• Relatively less prone to market cycles vis a vis broader market indices

Who should invest in Motilal Oswal Consumption Fund?

• Suitable for investors looking to invest in a thematic fund long term capital appreciation


• Investors looking for an equity-oriented portfolio that aims to invest in structural growth opportunities driven by changing demographic and economic upliftment


• Investors with investment horizons of at least 3 years


• Investors with high-risk appetites

Investors should consult with their financial advisors or mutual fund distributors whether Motilal Oswal Consumption Fund is suitable for their investment needs.