As far as the public market is concerned, traditionally, Indian arms of multinational companies have been considered to have the best moats: Nestle India, P&G Hygiene, Castrol, Colgate, Glaxo, Bosch, 3M, Unilever, to name a few. But the problem with consumer companies in India is two-fold. Buffett can and has invested in their parent or in the case of Unilever tried to buy them outright. Instead of buying P&G here, he might as well play white knight to the parent, which is being pushed by activists. It makes more sense given the exuberance reflected in the relative valuations of the Indian arms compared with the parent. Suzuki’s Indian arm, Maruti, is a fine example: the company is on a roll with stellar growth and has a deep moat where both supply-side and demand-side economics are at play. But today Maruti trades at a market cap of $32 billion, reflecting a multiple of 25, compared to Suzuki, whose market cap is $20 billion or that of Honda at $50 billion.
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