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#Rural
Why are rural stocks doing well?
Can this sustain?
If it does, what are the next themes that can play out?
1/n
Why are rural stocks doing well?
Can this sustain?
If it does, what are the next themes that can play out?
1/n
Trying to answer this from my understanding from several con-call of Rural focused companies, that I was a part of and also from my understanding coming from my other business interests that deals primarily with Rural India.
2/n
2/n
Apart from the known reason of rain, there are three more reasons, which are deeper and has to do with a shift in consumption behavior In Rural areas.
Reason # 1 Lacks 'scare' of COVID. Hence not holding onto or differing spends like their urban counterparts
Reason # 1 Lacks 'scare' of COVID. Hence not holding onto or differing spends like their urban counterparts
They have seen less people around them dying. Probably lil less on the scare created by media too.
So, they are not scared like urban people and are not holding onto spends. Even the high ticket ones.
4/n
So, they are not scared like urban people and are not holding onto spends. Even the high ticket ones.
4/n
Reason #2
2. Catching up to the urban phenomena of 'Value over price' driving demand for premium products over cheaper inferior products
Migrant workers bought back home their worldly knowledge of how Lil higher priced but way better products can give better value and longivity
2. Catching up to the urban phenomena of 'Value over price' driving demand for premium products over cheaper inferior products
Migrant workers bought back home their worldly knowledge of how Lil higher priced but way better products can give better value and longivity
The knowledge seems to be percolating down and its evident from the concall of different companies that the premium products have started receiving better acceptance in Rural India.
Clearly a new thing.
6/n
Clearly a new thing.
6/n
And the and Most Important reason is
Reason #3
Nature is responding positively.
So, the same land, same seeds are giving better yield. Also rainfall in healthy and more importantly even.
7/n
Reason #3
Nature is responding positively.
So, the same land, same seeds are giving better yield. Also rainfall in healthy and more importantly even.
7/n
Now coming to my beliefs and hypothesises
# 1 These are very fundamental changes, and do not go away in a jiffy
# Tractor, Fertilizers are the first level impacts that we are witnessing right now. But a lot more sectors will join the party going forward
8/n
# 1 These are very fundamental changes, and do not go away in a jiffy
# Tractor, Fertilizers are the first level impacts that we are witnessing right now. But a lot more sectors will join the party going forward
8/n
Rural focused retail, healthcare, education, consumption, credits etc. may see the time of their life quite soon.
End.
End.
