While growth in India may be slowing, the country is still a tempting target of expansion for Kraft Inc. ( KFT , quote ) and other global consumer manufacturers.
One of the main motivations behind Kraft's acquisition of Cadbury was that company's presence in India. This has worked out well, as Cabdury Kraft India is one of the fastest growing groups for Kraft Inc (KFT). For the first six months of 2011, the unit has posted a 40% increase in revenue.
Kraft CEO Irene Rosenfeld termed this "exceptional" in her recent trip to India, as reported in a recent article in The India Times .
KFT has increased in investments in India by more than 70% and there is more ahead. According to the India Times piece, "Kraft takes big India bite with Cadbury buy," Rosenfeld says Kraft is looking to make more acquisitions in India.
Growth in India has played into good performance for Kraft, as the stock is up almost 20% for 2011. On a quarter-by-quarter basis, both sales and earnings growth are higher. The company has a price-to-earnings ratio that is projected to fall to under 15 and a dividend yield of over 3%.
Compare that performance to the closed-end fund for India ( IFN , quote ) and its year-to-date losses in the 30% range.
From here, the interesting development to watch will be Kraft's looming split into two units: one to focus on international sales and the other to maintain North American operations. This will effectively separate the "growth" and a "value" sides of the company and allow traders to track each more efficiently.
KFT is a favorite of Warren Buffett and a major holding in the portfolio of Berkshire Hathaway ( BRK-A , quote ).