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India has been a consumption driven economy for the last many decades and will continue to be so over the coming two decades. As per McKinsey
Global Institute (MGI) consumption spending in India is expected to increase ~2.5x by 2025. The middle class population in India is going to increase
~12x during 2005-2025, thus fueling the consumption demand. The growing middle class and increasing disposable income thus provides many
investment opportunities in the consumption domain. In our report we have covered companies which are market leaders in their core product categories
(TTK Prestige, Symphony Ltd, Talwalkars Better Fitness Value (TBFV), V-Guard Industries, Hawkins cookers and Hitachi home & life solutions) and will
be significant beneficiaries of the increased consumption demand in India over the next two decades.
Indian GDP to grow ~5 times by 2030
India’s GDP at constant prices had grown ~4x during the period 1990-2009 and is expected to grow ~5x by 2030 (source MGI). The increase in GDP
is thus growing to be beneficial for many sectors and provides many investment opportunities.
Private consumption to increase by ~2.5x to Rs70 trillion by 2030
Private consumption has been the driver of Indian GDP for the past many decades. It has nearly doubled during 2003-09 and is expected to further
increase ~2.5x by 2030. The increase in private consumption is growing to come primarily from rising income.
Increasing urbanization + growing middle class+ rising income = higher consumption spending
As per United Nations, urbanization in India is expected to increase from ~30% in 2010 to ~40% by 2030 and the number of people living in urban
areas will increase by ~62% to 59 bn. Also, the middle class population in India will increase ~12x to 580 mn and will constitute 41% of the population
by 2025 as against ~5% in 2005(source MGI). The per capita income of India is expected to increase ~18 times by 2039 (source Emerging Market
Forum) and the disposable income for household is expected to increase ~3x by 2025 (source MGI). Growing urbanization, a young working-age
population, higher income will result in increased spending and thus, there will be a consumption boom over the next two decades.
Discretionary spending to constitute ~70% of the consumer wallet by 2025
Growing income and rising disposable income over the next two decades will result in the discretionary spending to increase from ~52% in 2005 to
~70% of the customer wallet by 2025 (source MGI). The growing discretionary spending will thus result in demand for appliances, communication,
healthcare etc.
Appliances industry to be a significant beneficiary of the rapid urbanization and growing income
The appliance industry will be a significant beneficiary of the rising income, growing middle class and increasing urbanization in the country.
Also, under-penetration and growing perception of considering appliances as necessity will result in high demand. The appliance market is expected
to witness a CAGR of 11.4% during 2005-2025 in urban India (source MGI) and companies which are market leaders in various home appliance
categories will see high growth rates over the next two decades.
We have covered 6 companies (3 initiating, 2 Unrated and 1 update) which are market leaders in the primary product
categories where they operate and will be significant beneficiary of the consumption demand.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Accumulate :TTK Prestige - Adding Prestige to the portfolio
Buy Symphony- A cool play
BUY Talwalkars Better Value Fitness- Value fit
Accumulate V-Guard Industries - Play on mass consumption story
Hawkins Cookers - Sweet whistle
Hitachi Home and Life Solutions - Bet on comfort
India has been a consumption driven economy for the last many decades and will continue to be so over the coming two decades. As per McKinsey
Global Institute (MGI) consumption spending in India is expected to increase ~2.5x by 2025. The middle class population in India is going to increase
~12x during 2005-2025, thus fueling the consumption demand. The growing middle class and increasing disposable income thus provides many
investment opportunities in the consumption domain. In our report we have covered companies which are market leaders in their core product categories
(TTK Prestige, Symphony Ltd, Talwalkars Better Fitness Value (TBFV), V-Guard Industries, Hawkins cookers and Hitachi home & life solutions) and will
be significant beneficiaries of the increased consumption demand in India over the next two decades.
Indian GDP to grow ~5 times by 2030
India’s GDP at constant prices had grown ~4x during the period 1990-2009 and is expected to grow ~5x by 2030 (source MGI). The increase in GDP
is thus growing to be beneficial for many sectors and provides many investment opportunities.
Private consumption to increase by ~2.5x to Rs70 trillion by 2030
Private consumption has been the driver of Indian GDP for the past many decades. It has nearly doubled during 2003-09 and is expected to further
increase ~2.5x by 2030. The increase in private consumption is growing to come primarily from rising income.
Increasing urbanization + growing middle class+ rising income = higher consumption spending
As per United Nations, urbanization in India is expected to increase from ~30% in 2010 to ~40% by 2030 and the number of people living in urban
areas will increase by ~62% to 59 bn. Also, the middle class population in India will increase ~12x to 580 mn and will constitute 41% of the population
by 2025 as against ~5% in 2005(source MGI). The per capita income of India is expected to increase ~18 times by 2039 (source Emerging Market
Forum) and the disposable income for household is expected to increase ~3x by 2025 (source MGI). Growing urbanization, a young working-age
population, higher income will result in increased spending and thus, there will be a consumption boom over the next two decades.
Discretionary spending to constitute ~70% of the consumer wallet by 2025
Growing income and rising disposable income over the next two decades will result in the discretionary spending to increase from ~52% in 2005 to
~70% of the customer wallet by 2025 (source MGI). The growing discretionary spending will thus result in demand for appliances, communication,
healthcare etc.
Appliances industry to be a significant beneficiary of the rapid urbanization and growing income
The appliance industry will be a significant beneficiary of the rising income, growing middle class and increasing urbanization in the country.
Also, under-penetration and growing perception of considering appliances as necessity will result in high demand. The appliance market is expected
to witness a CAGR of 11.4% during 2005-2025 in urban India (source MGI) and companies which are market leaders in various home appliance
categories will see high growth rates over the next two decades.
We have covered 6 companies (3 initiating, 2 Unrated and 1 update) which are market leaders in the primary product
categories where they operate and will be significant beneficiary of the consumption demand.
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