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  • Nov 25, 2023 - 23 Days. 35 Lakh Weddings. 10 Stocks to Watch Out for

23 Days. 35 Lakh Weddings. 10 Stocks to Watch Out for

Nov 25, 2023

23 Days. 35 Lakh Weddings. 10 Stocks to Watch Out for

Dear readers, I hope each of you has a great weekend.

I was able to step away from the computer to attend a friend's wedding last week.

Not only was it amazing to see how happy both of them were, it also allowed me to do some more in-depth thinking about where we currently are from an economic standpoint when it comes to the wedding industry.

This industry has a fascinatingly diverse ecosystem which works harmoniously to bring everything together on a couple's wedding day.

It's the fourth biggest industry in India, bigger than auto and IT sectors...growing steadily every year.

As the next few weeks are expected to bring strong demand given the upcoming wedding season, investors are gung-ho on the top wedding stocks.

To put things into perspective, data released by official industry body mentions about the massive expenditure of Rs 4.74 lakh crore in the upcoming wedding season from November 23 to December 15, which is likely to see almost 38 lakh marriages.

If achieved , it'll be a huge bump up of over Rs 1 lakh crore compared to the year-ago period.

The Delhi government has already issued some guidelines for the upcoming wedding season. In Delhi alone, over 4 lakh weddings are expected this season.

When we think of weddings, we usually think of hotels, food & beverages, jewellery, and apparel. Of course, it's much bigger than that.

In this article, we take a look at the top 10 companies that could be the biggest beneficiaries of the upcoming wedding season.

#1 Titan

No surprise here. Titan is usually the first company that comes to everyone's mind when thinking about wedding stocks in India.

The company drives close to 90% of its revenue from its jewellery division. It sells jewellery through its brands Tanishq, Zoya, Mia, and CaratLane.

The company's watches also see strong demand as a popular gift during the wedding season.

The company is a leading manufacturer of watches, jewellery, and eyewear in India. It has a 60% share in the organised watch market and is the world's fifth-largest integrated watch manufacturer.

#2 Indian Hotels

Hotels with wedding halls or open spaces, can host multiple weddings on a single day. Weddings are generally preceded and followed by customary ceremonies which too, many a times are hosted at the same location.

Elaborate ceremonies can last up to a week translating to confirmed F&B and room revenues. Over the years, weddings have become a significant contributor to total revenues generated by the hotel industry.

The Indian Hotels Company Limited (IHCL) is India's largest hospitality company. It's also considered to be among the best hotel stocks in India.

Its iconic brand Taj Hotels was ranked as the world's strongest hotel brands and India's strongest brand across sectors as per Brand Finance, in 2022.

Indian Hotels is on a roll financially, having completely recovered from the covid phase and having reducing its debt to zero in FY23.

The company earned revenues of Rs 59.5 bn in FY23, which was up 85.2% compared to Rs 32.1 bn reported in FY22. Over the past 5 years, its revenue has grown at a CAGR of 6.6%.

The company earned a net profit of Rs 9.7 bn in FY23, compared to a loss reported in FY22. Over the past 5 years, its net profit has grown at a CAGR of 41.2%.

Its margins are also healthy. In FY23 its operating margin 31.1% and net margin was 16.7%.

#3 Vedant Fashions

Vedant Fashions caters to the Indian celebration wear market with a diverse portfolio of brands such as Manyavar, Mohey, and Manthan.

It's one of the most direct plays on the long term growth of the Indian wedding industry. This is because the company has positioned itself nicely to tap into the large and growing demand for wedding finery over the long term, with its strong brand franchise.

The Indian wedding and celebration market is relatively less price-sensitive compared to casual wear. Thus, the company generates very high gross margins with no end of season sale or discounts offered on the MRP.

Its financials are also solid. In FY23 the company's operating income and net profit grew 30.2% and 36.3% over FY22. The company has no long term debt.

#4 Dixon Technologies

Dixon Technologies is not a name that comes to mind immediately when looking for wedding stocks but it should be.

There is no doubt about the contribution of the Indian wedding industry to this company. Smartphones and consumer electronics are among the most popular wedding gifts in India.

Dixon is India's largest contract manufacturer of televisions, washing machines, smartphones, LED bulbs, and CCTV security systems.

Its clients are companies such as Samsung, Panasonic, Bajaj, and Philips. It has 17 manufacturing units in India.

Dixon is also the biggest manufacturer of LED TVs in India for the likes of Samsung, Panasonic, Xiaomi, TCL, OnePlus, and more. About 15% of all TVs sold in India are assembled by the company.

The company was also in the news recently regarding the government's revised PLI scheme for IT hardware. Dixon is in talks with IT hardware companies based in the US and China for the production of laptops.

#5 Raymond

Raymond Ltd is one of the leading players in the suiting business with a market share of over 60%. It is also the largest branded fabric player in the organised shirting segment.

Since suits are a wedding staple, the company stands to benefit from the increase in weddings.

The company is planning to add 150 outlets by the financial year 2024.

Further, Raymond is also a beneficiary of China plus one megatrend. The company claims to have a healthy export order book.

Raymond recently forayed into a high growth sector further strengthening its portfolio.

#6 Kalyan Jewellers

Kalyan Jewellers is one of the oldest business families in India with a family legacy of over a century since 1908.

It designs manufacture and sells a range of gold, studded and other jewellery products across various price points. It is one of the largest jewellery retailers in India based on revenue.

The company is currently on a store expansion spree, having opened 41 showrooms in India so far this year, with plans to launch another 9 in the next 45 days and around 15 in Q4.

For 2025, it's planning 55 franchise Kalyan showrooms in India, and around 80 showrooms across India.

The company's next big growth lever could possibly come from its lab-grown diamonds which is still at nascent stage in India.

#7 Voltas

Voltas, a Tata group company is the undisputed market leader in the Room Air Conditioner category for more than a decade, consistently maintaining the No. 1 position, and has steadily maintained its lead over the competition.

Founded in 1954, the company is also globally recognised as an engineering solutions provider and a project specialist.

It enjoys a strong presence across India, the Middle East, South East Asia, and Africa.

How does Voltas benefit from the wedding industry you ask?

Typically, in India, the festive season starts from Onam, covers Durga Puja and with Diwali, contributes around one-third of the overall annual sales value across categories of the industry.

But the sales continue to remain elevated as the wedding season follows immediately after right up to March.

Electronic items such as televisions, air conditioners, refrigerators, etc, are popular purchases by the bride and groom or as a gift given by family and friends on the occasion.

#8 TVS Motor Company

Motorcycle manufacturing companies often look forward to the wedding season as it is a major contributor to their sales and performance for the year.

One must bear in mind that over 40% of the two-wheeler market is in rural and semi-urban areas and it is very common for a groom to either purchase or be gifted commuter bikes on the occasion.

TVS Motor Company is known for its scooter and motorcycle offerings including popular ones like TVS Jupiter, TVS Ntorq, TVS Scooty Pep+, Apache Series, TVS Sport, among others.

It currently manufactures at its manufacturing facilities located at Tamil Nadu, Karnataka and Himachal Pradesh. It's the only listed player in India in the moped segment.

In the coming quarters of FY24, TVS Motor is expected to see an improvement in market share on the back of premiumisation and as festive season kicks off.

The company has recorded higher growth in the motorcycle and scooter segments as compared to industry peers.

#9 Arvind Fashions

Arvind Fashions Ltd operates in the branded apparels, beauty and footwear space. It has a portfolio of several owned and licensed global brands across different segments.

The company operates several brands across casual and formal segments including Calvin Klein, Tommy Hilfiger, US Polo Assn, Sephora, Arrow, Aeropostale.

The company recently posted its highest ever sales, EBITDA, and profit after tax in the second quarter of FY24.

The company is expecting the second half of FY24 to be better due to festival dates, wedding dates, and the winter season.

#10 Trent

A subsidiary of the Tata Group, Trent operates retail stores under the brand names Westside, Zudio, Star, and Landmark.

Companies like Trent, which are present in all segments of fashion including value to luxury products stand to benefit from the upcoming wedding season.

The company has seen sharp improvement in same-store sales and increase in average bill size.

Conclusion

Considering thematic stocks like these can be exciting for some investors. They offer the potential for quick returns during a certain time of the year.

However, it's important to understand that the stock market doesn't provide easy returns to anyone.

Returns from such themes may not match investors' expectations. Therefore, one must view wedding stocks with the same amount of caution as one would view other stocks.

Also be cognizant of the valuations dear reader. You should not end up buying wedding stocks which have already been priced to perfection.

We encourage you to do your own research on Indian wedding stocks using Equitymaster' stock screener: Top Wedding Related Companies in India.

Happy investing.

Investment in securities market are subject to market risks. Read all the related documents carefully before investing

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