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The 6 Stocks That Will Benefit The Most From Indian Consumption, According To HSBC

Six Indian stocks and four overseas stocks are expected to benefit the most from consumption in India, according to a HSBC survey.



Customers walk past clothes on display at a Big Bazaar hypermarket. (Photographer: Dhiraj Singh/Bloomberg)
Customers walk past clothes on display at a Big Bazaar hypermarket. (Photographer: Dhiraj Singh/Bloomberg)

Six Indian stocks and four overseas stocks are expected to benefit the most from consumption in India, according to a HSBC survey.

Avenue Supermarts Ltd., Jubilant Foodworks Ltd., Dabur India Ltd., Future Retail Ltd., Reliance Industries Ltd. and Nestle India Ltd. are the Indian stocks expected to benefit the most from the consumption boom, according to the banking major. The overseas stocks are Puma SE, Samsonite International SA, Samsung Electronics Co. and Xiaomi Corp.

HSBC surveyed 1,000 members of India’s urban middle class, asking them 50 questions each about their consumption habits. The survey found that their incomes and expenditure will rise in the next 12 months.

A strong economy is generally good news for the consumer sector as people have more money in their pockets, HSBC Strategist Amit Sachdeva said. He said that 80 percent of the survey’s respondents are optimistic about the economy in the next 12 months and nearly half are very optimistic. Only 7 percent feel pessimistic about their economic circumstances, Sachdeva said.

Survey Highlights

  • Bullish on Avenue Supermarts, operator of retail chain D-Mart, due to its focus on value retailing, its key advantage.
  • The habit of ordering online food has increased substantially among Indians, and pizza is the favourite order, which bodes well for Jubilant Foodworks Ltd.—the operator of Domino’s Pizza chain in India.
  • Nestle India is expected to benefit the most from consciousness about health, nutrition and diet among urban consumers, resulting in greater premiumisation potential.
  • Dabur should be a beneficiary of the switch to natural products as most respondents said they may buy a natural personal care if they are introduced by a trusted brand.
  • Big Bazaar chain of supermarkets will be the main driver for Future Retail Ltd.’s retail business, provided it can sustain a respectable same-stores sales growth at its large format stores.
  • Reliance Industries is one of the largest companies in the organised retail market and the fastest-growing player in the grocery segment. The grocery business is expected grow at an annualised rate of 22 percent over the next three years.