Nomura says consumption turning a corner, paint worries fading, jewellery and FMCG stabilising

On Finding Alpha, Mihir Shah, Vice President, India Consumer – Equity Research Analyst at Nomura breaks down the major shifts shaping India’s consumption landscape — from leadership changes to competition cycles and easing sector headwinds.Earlier this month, Shah upgraded both Asian Paints and Berger Paints in what the market calls a bold contrarian call. His reasoning: the big overhang came from fears that Birla Opus, backed by a ₹10,000-crore investment, would disrupt growth and margins. However, two years after launch, he says the disruption simply hasn’t materialised.

“The product prices are very similar to legacy players… dealer margins are only a shade higher,” he notes. Even during the aggressive launch phase, margins for Asian Paints and Berger dipped only 100–200 basis points, while growth slowdown was more a function of weak consumption across categories.

Dealer checks also show that “the parabolic growth that the new entrants were seeing has started to moderate,” and lost dealers are returning. His stance: competitive intensity stays high, but the disruption is no longer there.
He sees more upside in Asian Paints as three tailwinds align — volumes, margins and re-rating. Strong quarter two performance, including double-digit volume growth and a 240-basis points margin expansion, strengthens his case.

In the jewellery space, Shah says the threat from lab-grown diamonds is overstated. Titan’s studded jewellery has grown at 19% CAGR over 12 quarters. “There is very little evidence that lab-grown is substituting Titan’s studded jewellery,” he adds, noting that Titan has strong moats, brand trust and organised-market tailwinds.

Shah also remains positive on Britannia even after the recent exit of its CEO Varun Berry. The company is a key GST-cut beneficiary, with 65% of its portfolio at ₹5–₹10 price points, and he believes the new leadership can sustain the momentum: “The team is strong, the white spaces are clear, and the journey to a total foods company continues.”

For the entire discussion, watch the accompanying video