[T.S.R:16436] India Consumer Conference: Key Take-Aways

Conference. Anand Rathi Institutional Equities' India Consumer Conference, 'The Changing Face of the Indian Consumer', was held in Mumbai over 25-26 Nov '10. It featured 15 listed companies and two panel discussions.

 

 

n       Panel discussion on growth strategies. Panellists indicated that the India consumer story is just beginning to unfold. They averred that sub-segments in health, beauty and wellness will grow rapidly in the coming decade. Rising penetration of nuclear families, increasing number of working women, India getting younger and rising income levels would lead to segments such as functional & health foods and ready-to-eat products growing well during the next ten years.

n       Panel discussion on rural consumers. Panellists opined that 70% of population living in rural areas is a huge untapped market for the sector. With better road connectivity, government initiatives such as NREGA and rising incomes from sources other than farming, off-take by rural consumers would rise. Panellists also indicated that rural consumers visit nearby towns for their weekly/monthly shopping. Hence rural consumption partly contributes to off-take in urban areas. Small SKUs and shelf stable products would see more off-take in rural areas. 

n       Product differentiation is key theme. With rising competition, most consumer players are looking at launching differentiating products. As various large MNCs and Indian companies are seeing aggressive spend on advertising and trade promotions, consumer companies are planning niche-product and variant launches.

n       Maintaining margins not a major concern. With inflationary pressures easing and most companies resorting to price hikes or weight reductions, consumer companies do not seem worried about maintaining profit margins. They are focussed more on revenue, especially through volume growth.

n       Interesting stock ideas. Zydus Wellness (health), Emami (new launches, possible acquisitions), Marico (improving margin outlook), Colgate (market-share gains), Dabur (strong focus on ayurved). Nilkamal (lifestyle retail turned profitable) and Piramal Glass (increased contribution from the high-margin cosmetics & perfumery-C&P segment).

 
 

Safe Harbor Statement:

Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.

 

Nothing in this article is, or should be construed as, investment advice.

 

 

 

 

 

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