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Ram Joshi @ramjoshionline

Author: Ram Joshi
Publication: Twitter.com
Date: January 13, 2023
URL:   https://threadreaderapp.com/thread/1746105085396939023.html

Goldman Sachs published 46 pages of reports on "The Rise of Affluent India".

This isn't just a report.

It's a look into India's golden future.

Let's dive into the insights and see how India's elite are shaping the future of India's markets, industries, and perhaps, even its identity. 

Before we start, here is a quick overview:

- A growing segment of affluent consumers in India, projected to reach around 100 million by 2027.

- Significant wealth growth reflected in market capitalization, gold prices, and property values.

- Categories like leisure, jewelry, premium foods, and healthcare are beneficiaries of this affluent growth.

Let's dive deep.

1. Affluent Consumer Base.

The top 10% of urban India, representing about 3.5% of the population, shows a much higher per capita consumption than the average.

Especially in categories like durable goods, healthcare services, jewelry, and out-of-home food.

This segment's consumption is 8-10 times higher than the national average.

2. Growth Projections.

The population of 'Affluent India' is projected to grow at a double-digit CAGR.

This isn't a temporary trend.

3. Premium Brands and Categories.

Premium brands largely cater to 'Affluent India'.

Categories benefiting from this affluent growth include premium two-wheelers/cars, fashion retail, personal care, and healthcare.

4. Market Performance.

The numbers speak louder than a jet engine: Companies focused on the finer things in life have seen their value predictions shoot up.

Stocks exposed to 'Affluent India' have seen consistent upgrades in consensus revenue estimates, while broad-based consumption stocks have seen downgrades.

It's a tale of two markets within India.

5. Top Picks.

Some companies are like fine wine in the Indian market – they just keep getting better.

The report lists several companies as top investment ideas, including:

Titan, Apollo Hospitals, Makemytrip, Eicher Motors, Zomato, Devyani, Sapphire, and Phoenix Mills.

6. Competitive Intensity and Market Risks.

But it's not all champagne and roses. The battle for the bucks is real. More players mean a fiercer fight for market share.

It could impact market share and profit pools, particularly if there is aggressive price-led competition.

The stakes? High.

The rewards? Higher.

7. Government Policies.

Mentioned as a possible risk.

Changes in government policies, especially concerning taxation, could impact the disposable income growth for affluent consumers.

If it comes, that's going to pinch.

8. Titan's Growth

Titan's sparkle isn't just their jewelry.

It's their business model.

They are not just selling.

They are seducing the market with premium bling.

And their secret sauce?

A mix of aspirational branding and customer experience.

9. Eicher Motors' Premium Segment.

Eicher Motors, known for its Royal Enfield brand, is positioned to benefit from its strong presence in the premium two-wheeler segment.

They're the poster child for premium bikes.

And guess what? Electric trends aren't putting the brakes on them anytime soon.

10. Quick Service Restaurants (QSR).

QSR is the next big bite.

The QSR format is set to benefit from the growing 'Affluent India' segment.

KFC is expected to be the fastest-growing player due to its under-penetration and improved unit economics.

11. Apollo Hospitals.

As India's largest hospital chain, Apollo Hospitals is expected to continue growing, driven by improving clinical outcomes for lifestyle diseases.

In the new India, health isn't just wealth. It's the ultimate luxury.

This isn't just about numbers.

It's about a new chapter in India's story, one where luxury could become the new normal.

End of thread.

Thank you for reading.

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