India’s K-shaped story: Will the script change in 2025?

livemint.com:

Subscribe to enjoy similar stories. Mumbai: What do the iPhone and Indian stocks have in common? Quite a few things. For starters, both are in fashion to own, no matter what their prices are.

But more importantly, nowadays, there is no dearth of buyers for these products in the country. In fact, chances are one might have invested in stocks in hopes to buy an iPhone, for those additional social brownie points. Once a product strictly reserved for the affluent, while always a barometer of aspiration, the iPhone neatly sums up India’s consumption story in 2024.

Apple sold iPhones worth $10.7 billion or ₹90,680 crore in India in the first nine months of the year, with the September quarter (Q2FY25) logging the largest-ever quarterly shipment at four million units, according to the International Data Corporation, a market research firm. The iPhone exemplifies India’s post-covid consumption story which starts with a K—all caps and bold. The affluent and the upper middle class came out of the pandemic with an untameable demand for luxury and aspirational goods and services while the lower strata, still fighting inflation, have strictly kept spending limited to necessities.

“Consumption in 2024 and most likely in 2025 will be a tale of parts," Trideep Bhattacharya, president and chief investment officer (CIO) of equities at Edelweiss Mutual Fund told Mint. “We started the year strongly with robust luxury consumption and it stayed intact throughout the year. While urban (mass) consumption was a major laggard this year, rural consumption will kick in sometime in 2025." Such juxtaposing themes solidified the Indian stock market’s narrative in 2024, beneath all the froth and hype.