What’s making Bernstein’s Jignanshu Gor bet on retail, and restaurant over staples?
Jignanshu Gor, Group Analyst, Bernstein SocGen, believes that discretionary spending is waiting to grow at the bottom of the pyramid or in the middle of the pyramid and outside of metro cities. It is not just a metro story. It is a story of the affluent, in both urban and rural India. The recovery for the discretionary from a narrative perspective is going to happen in the next 12 to 18 months, which makes him confident of the prospects of this sector itself.
At a time when people are looking at staples, talking about rural recovery, monsoon, election, and all of that, you have initiated coverage on urban discretionary stocks, which were well for the last couple of years. What makes you sanguine about retail, and restaurant over staples?
Jignanshu Gor: If I look at how the discretionary spending in India is construed today, the coverage for the sector across retailers, and restaurants, including digital and offline, is restricted to the top 10% of the population. We think that as the increasingly affluent people, both in the top of the pyramid and the middle of the pyramid, are looking to express themselves, that is being expressed in eating out and buying trendier clothes.
Hence, we believe that discretionary spending is waiting to grow at the bottom of the pyramid or in the middle of the pyramid and outside of metro cities. So, I do not think that discretionary is just a metro story. It is a story of the affluent, in both urban and rural India. We think that the recovery for the discretionary from a narrative
