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ICICI Securities Report
We believe India's population growth may continue to dip after falling by half to ~1% over the past two decades and its contribution to consumption growth may structurally decline going ahead.
However, per capita private consumption is up eight times in the last two decades and stood at ~Rs 10,000 / month in FY23, largely driven by the structural rise in the wallet share of ‘discretionary consumption' which stands at an all-time high of ~43%.
On the flip side, the share of essentials has been dropping led by food (clothing, house rent and utility services) with the exception of ‘health'. Discretionary categories with a rising wallet share include: 1) personal products, home furnishings, 2) financial and other services, 3) transportation, auto and communication, 4) education and audio-visual recreation.
Even within foods, the share of relatively discretionary protein-rich categories is rising structurally.
In our view, related stocks may benefit from the evolving ‘competitive advantage period' in their lifecycle.
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