Premiumization, indulgence key to India's food and beverages market - UBS

Sapphire Foods India

18/03/2024 09:03

** Premiumization and indulgence are reshaping India's food
and beverage preferences analysts at UBS say
    ** Premium staples, carbonated and alcoholic drinks and
Quick Service Restaurants (QSR) are outpacing traditional FMCG
categories - UBS
    ** UBS begins covering United Breweries  UBBW.NS , Devyani
International  DEVY.NS , Sapphire Foods India  SAPI.NS  with a
"buy", while Tata Consumer Products  TACN.NS  and Varun
Beverages  VARB.NS  get "neutral" rating
    ** Average recommendation for DEVY, TACN, VARB, and SAPI is
"buy," while UBBW is a "hold" as per LSEG data
    ** Despite challenges like competition and inflation, QSR
operators remain confident in long-term growth potential, shown
by continued store expansion, UBS says
    ** Adds rising per capita income is driving discretionary
spending, fuelling demand for premium offerings
    ** "Expanding distribution reach is crucial for near-term
growth, especially for premium packaged staples and alcobevs"
    ** Expects UBBW to achieve a volume CAGR of ~9% from
FY24-28; EBITDA margin expected to trend towards pre-COVID-19
levels, reaching ~15% by FY28
    ** DEVY, SAPI, and VARB up between 0.2%-2%, while UBBW and
TACN are down between 0.4%-1.9%

 (Reporting by Navamya Ganesh Acharya in Bengaluru)
 ((Navamya.GaneshAcharya@thomsonreuters.com; +91 8805175330 ;))