Bet on these stocks to mint money on your friend’s big fat Indian wedding

From Radhika Merchant and Anant Ambani wedding-related celebrations to Deepika Padukone and Ranveer Singh’s nuptial, Anushka Sharma and Virat Kohli, Priyanka Chopra and Nick Jonas, Vanisha Mittal and Amit Bhatia, Indian weddings have always been a grand affair.

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A recent Jefferies note estimates the spends on the ‘big fat Indian wedding’ at nearly Rs 10 trillion ($130 billion) each year – higher than the annual wedding spend in the United States (US) pegged at around $70 billion, but a tad lower than China ($170 billion). 


If it were a consumption category in itself, the ‘big fat Indian wedding’, Jefferies said, would rank as the second largest, only behind food and groceries. 
 


The current average expenditure per wedding of around Rs 1.2 million, Jefferies said, is 5x India’s gross domestic product (GDP) per capita of $2.9k and greater than 3x the average annual household income of around Rs 0.4 million. Compared globally, India’s wedding spend to GDP ratio at 5x, is significantly higher than several other countries. 

“Interestingly, this spend is nearly 2x the total amount spent (including both the bride and groom) on nearly 18 years of education in India from pre-primary to graduation (around Rs 0.6 million). As a comparison, wedding spend / education spend ratio in the US is only 0.5x for public education and 0.1x for private education,” wrote analysts at Jefferies in a recent note led by Vivek Maheshwari, their equity analyst.

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In simple words, an average Indian couple spends around 2x on weddings versus education (pre-primary to graduation), according to the Jefferies note, which is in sharp contrast to countries such as the US where spend on a wedding is less than half versus education.

Spends


Spends


Listed players


The ‘big fat Indian wedding’, Jefferies said, is also a key consumption driver for several categories. From a spend perspective, wedding jewellery, the note said, typically accounts for the largest proportion of the wedding spend, making up approximately a quarter of the total spend done by a family, followed by catering at around 20 per cent and events at 15 per cent. 

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“For the jewellery industry too, wedding is a key demand driver – 50 per cent to 55 per cent of the total jewellery market by weight is wedding jewellery, followed by daily wear at 35 per cent and fashion wear at 20 per cent. Of the $84 billion apparel retail market, nearly 11 per cent is led by wedding and celebration wear, bulk of which are driven by the former,” the Jefferies note said.


While service providers to the wedding industry largely fall in the unorganized and highly fragmented category, consisting of many small scale businesses and individual service providers who cater to both low and high spenders, there is scope for the organized players – and even stock market listed entities – to up their game to address consumer needs. 

“This is also an opportunity for large organized players to gain market share, as they build capabilities to cater to regional preferences. Several companies such as Titan, Kalyan Jewellers, Vedant Fashions, Aditya Birla Fashion Retail (ABFRL) etc. are well-placed from this shift to organised players in a growing market,” Maheshwari said.

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While there are no pure-play listed catering companies, select branded retail chains do offer catering services, the Jefferies note said. Another segment, according to Jefferies, that does not have any stock market listed company catering to the big fat Indian wedding industry is the ‘wedding planners’ segment, which is currently led by start-ups.

According to the 2023-24 wedding industry report by WedMeGood, which surveyed over 2,400 brides and grooms (primarily in urban India), 21 per cent of the surveyed couples had destination weddings, up from 18 per cent in 2022. 

Key stocks


Key stocks

Popular domestic destinations include Goa, Udaipur, Jaipur, Kerala and Uttarakhand, while popular international destinations include Thailand, Bali, Italy and Dubai to name a few.

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With elaborate stay and travel-related requirements in a wedding, there is opportunity for leading hotels chains such as IHCL, EIH, Chalet Hotels and airline companies such as Indigo, SpiceJet etc., Jefferies believes, which are among the key listed companies in this space.

  

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