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India Consumer Survey 2011 ------------------------------------------------------------------------------
New report: Of 'small-town' bulls and 'low-frill' needs
Survey 2011, we present our key findings from responses of over
2,500 respondents across ten cities in India.
● The Indian consumer displays relatively broad-based optimism
across the range of income brackets. On average, households
expect income growth to double in the next 12 months, while 70%
find the current environment conducive for making major
purchases. Amid this trend, we find that smaller cities are the most
optimistic. Key stocks: Bharti, Hero Honda and Maruti.
● While consumer balance sheets are still significantly
underleveraged, we see an increased appetite for credit in bigticket purchases (property and cars). Key stock: HDFC Bank.
● There is tremendous focus on the value proposition, even as
consumers trade up in automobiles. A tough combination of better
but reasonably priced cars means India is not a plug-and-play
market. Incumbents with the best cost structure and right products
would benefit the most. Key stock: Maruti Suzuki.
● Education is a priority that stands out for the Indian consumer.
The allocation of existing spending is by far the highest at around
7.5% among the countries surveyed. A huge opportunity lies in the
under-served K-12 system (kindergarten to grade 12). Increasing
penetration as well as innovation in teaching techniques together
offer significant potential. Key stock: Everonn.
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