Guotai Junan: The Indian consumer industry is entering a period of rapid growth, with strong performance from expanding and growth-oriented companies.

Guotai Junan released a research report stating that India is the fastest growing emerging economy in the world, benefiting from massive capital expenditure, active domestic consumption, and demographic dividend. In recent years, India's GDP growth rate has been at the forefront globally, nurturing competitive advantage industries such as IT, pharmaceuticals, agriculture, automotive, clothing, and film. India's development trajectory and successful experience are worth referring to, with growing industries, global expansion, and strong performance of local old-fashioned companies. Key points from Guotai Junan include: India is currently the world's fifth largest economy, with a GDP of $3.57 trillion, ranking below only the United States, China, Japan, and Germany. In terms of economic structure, India shows characteristics of a developed tertiary sector and a relatively weak secondary sector, with final consumer spending accounting for 60% of GDP, making consumption the "first driving force" of India's economic growth. The five core drivers of India's robust economy and consumption are: population advantage (continuously expanding population, abundant young workforce), industry advantage (highly competitive industries such as IT, pharmaceuticals, agriculture, automotive, textiles), economic reforms (India releases economic growth vitality through various reform measures), income increase (increasing middle to high income families, continuous growth in disposable income), and seizing opportunities in the international industrial chain (actively attracting foreign investment, undertaking industrial transfers). From the perspective of "industry review," this report focuses on seven major consumer industries in India (food and beverage, agriculture, beauty and personal care, retail, automotive, household appliances, textiles and clothing), tracing the transition of consumption in India. Before the 1990s, India implemented various tariff barriers to protect domestic industries, resulting in slow economic and consumption market growth. It was not until 1991, when the Rao government took office and comprehensively implemented economic reforms, absorbing foreign investment and increasing openness to the outside world. After the Modi government took office in 2014, it more actively promoted economic reforms through initiatives such as "Monsoon Plan" and "Digital India," leading to a resurgence of the Indian economy and consumption market. Several sub-industries entered a period of high-speed growth, with market sizes in the Indian alcoholic beverage industry growing at a CAGR of 9.6% from 2008-2019, the Indian food industry at a CAGR of 13% from 2010-2018, the Indian beauty and personal care industry at a CAGR of 10% from 2016-2022, and the Indian automotive industry at a CAGR of 6.5% from 2006-2023. From the perspective of "valuation review," this report outlines changes in the stock prices and valuations of various consumer industries (PE/PS, etc.). Consumer industries in India with good stock performance include three categories: 1) growth tracks that actively seize the dividend of industry expansion, such as Nestle India and Britannia in the food industry, and Hindustan Unilever and MARICO in the beauty and personal care industry; 2) through international expansion and globalization, continually exploring new profit growth points, such as Tata Motors in the automotive industry, Tata Motors, and Land Rover Jaguar's two major brands selling well overseas; 3) India's local old-fashioned advantage industries, such as RAYMOND and Page Industries in the textile clothing industry. These three categories of companies have better stock performance and significantly higher valuation premiums. Risk warning: Differences in national conditions between India and China lead to different paths for business development; global economic downturn pressures may slow down consumption market growth; domestic consumption promotion policies may not yield the expected results.