Hero Honda Motors Ltd. employees work on the production line at the company’s new factory in Haridwar, India. (Photographer: Pankaj Nangia/Bloomberg News)

Alpha Ideas 20-20: Two-Wheeler Financier Samvitti Capital’s Prabhakar Kudva Is Betting On

Muthoot Capital Services is likely to benefit from the growing two-wheeler segment in India, said Samvitti Capital’s Prabhakar Kudva.

The two-wheeler financier is in a sweet spot for the next three-four years to really grow their profit pool at an above industry average growth rate, Kudva said at the Alpha Ideas 20-20 event in Mumbai. “This company can possibly create disproportionate profit for itself.”

That’s because there is a huge opportunity in motorcycle lending. In India, on an average only 30 percent of the bikes are bought using credit. But that’s rising since demonetisation, Kudva said. “We buy 50,000 bikes daily. It is a huge market.”

The company, a subsidiary of gold loan provider Muthoot Pappachan Group, is also set to capitalise on its parent’s large network.“Growth isn’t capital-intensive for them because no new branches need to be set up. They just pay a fee to the parent and milk their entire distribution chain.”

Watch The Full Presentation Of Prabhakar Kudva Here:

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