The manager introduced the Indian spirits company to the portfolio in the third quarter of 2012. United Spirits has a 5.5% allocation in the fund, making it the second largest holding.
The company’s shares have surged in recent days after UK spirits business Diageo agreed to buy a controlling stake. Google Finance shows United Spirits as rising 84.2% over the past three months.
Jupiter India’s position in consumer goods was about 24% back in February but this has been increased to around 30% by the end of October. This is overweight to the MSCI India benchmark, which has a weighting of about 13% to the sector.
Vazirani said: “Our largest overweight position remains consumer goods companies. Because of the story of poor people getting richer and consumption growing much faster than GDP, we like this space.
“Whether it’s food, drinks or cigarettes, we like the entire space. We like its high barriers to entry and the great cash flow generation potential. We think a lot of the companies within the sector, although they might appear expensive, are actually not very expensive on a long basis.”
Jupiter India’s largest individual holding is tobacco company Godfrey Phillips, India’s second largest cigarette and a 9.2% allocations. Food group Nestle India is the third biggest allocation, with a position approaching 5%.
The manager added that the fund is also significantly overweight consumer services companies as a similar play on India’s rapidly growing middle class.
