The Rise of Affluent India

EQUITY RESEARCH | January 12, 2024 | 12:18AM IST
The rise of ‘Affluent India’

For the exclusive use of Goldman Sachs Clients
The rapidly growing cohort of ‘affluent’ consumers in India: Only ~4% of India’s working age population has a per capita
income of over US$10,000, projecting to ~60mn consumers. Corroborating data across tax filings, bank deposits, credit cards and
broadband connections, we estimate that this consumer cohort has grown at a 2019-23 CAGR of over 12%, compared to ~1%
CAGR of India’s population. If the current trajectory continues, we expect ‘Affluent India’ will grow to ~100mn consumers by
2027.
Strong wealth effect kicking in: India’s market cap has increased over 80% over the past 3 years with rising retail participation.
Gold price also rose 65% over 2020-23. As a result, the total value of Indian holdings of equities and gold has increased from US
$1.8tn to US$2.7tn. Property prices rose ~30% over FY19-23, compared to an increase of ~13% over FY15-19.
‘Higher for longer’ growth for top end consumption; we prefer businesses with a moat: The largest beneficiary of rising
‘Affluent India’ are categories such as leisure, jewellery, out-of-home food and healthcare, and premium brands within all
categories. With double digit CAGR in the consumers in the ‘Affluent India’ cohort, we expect mid-teens growth in these
categories over the medium term. This ‘higher for longer’ growth will imply sustenance of rich valuations. While there are many
9bdaef7fe4034a288799e240f9c693bf
stocks that are exposed to these segments, we prefer companies that also have a competitive moat. Our top ideas are Titan,
Apollo, Phoenix, Makemytrip, Zomato, Devyani, Sapphire and Eicher. They derive their moat from 1) strong brand (eg Titan,
Eicher), 2) entry barriers from high cost/gestation of creating new business (eg Apollo, Phoenix), 3) network effect (eg Zomato).
‘Affluent India’ outperforming broad-based consumption, seeing consensus upgrades: In the past 3 years, companies which
address top end consumption have grown faster compared to those that address broad based consumption. In the past 12
months, our ‘Affluent India’ list of stocks has seen 7% upgrade in FY24 consensus revenue estimates, vs 3% downgrade for the
broad-based consumption names. Key risks include rising competitive intensity and a sharp correction in asset prices that
impairs the wealth effect.
Arnab Mitra Saurabh Kundan Manish Adukia, CFA Chandramouli Muthiah Shyam Srinivasan, CFA
+91(22)6616-9345 +91(22)6616-9129 +91(22)6616-9049 +91(22)6616-9344 +91(22)6616-9346
arnab.mitra@gs.com saurabh.kundan@gs.com manish.adukia@gs.com chandramouli.muthiah@gs.com shyam.srinivasan@gs.com
Goldman Sachs India SPL Goldman Sachs India SPL Goldman Sachs India SPL Goldman Sachs India SPL Goldman Sachs India SPL
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research analysts with FINRA in the U.S.
The Goldman Sachs Group, Inc.
For the full list of authors, see inside
Contributing Authors
Arnab Mitra Saurabh Kundan Manish Adukia, CFA
+91 22 6616-9345 +91 22 6616-9129 +91 22 6616-9049
arnab.mitra@gs.com saurabh.kundan@gs.com manish.adukia@gs.com
Goldman Sachs India SPL Goldman Sachs India SPL Goldman Sachs India SPL
Chandramouli Muthiah Shyam Srinivasan, CFA Pulkit Patni

+91 22 6616-9344 +91 22 6616-9346 +91 22 6616-9044
chandramouli.muthiah@gs.com shyam.srinivasan@gs.com pulkit.patni@gs.com
Harshita Wadher Karan Vora, CFA Mrinal Maheshwari

+91 22 6616-9258 +91 22 6616-9146 +1 332 245-7688
harshita.wadher@gs.com karan.vora@gs.com mrinal.x.maheshwari@gs.com
Rishabh Gupta
+91 22 6616-9052
rishabh.gupta@gs.com
Goldman Sachs India SPL
Goldman Sachs
Focus charts
Exhibit 1: Affluent India - number of consumers for discretionary Exhibit 2: Mutiple data points corroborate mid teens growth in
products/services and tax filings below 100mn number of ‘Affluent’ consumers in India
High growth of Affluent consumers in India

3 mn 50%
40%
30%
20%
10%
0%
CAGR of CAGR of CAGR of CAGR of income CAGR of CAGR of
working age number of broadband tax filings of number of number of term
population with Credit Cards in connections over Rs1mn demat* deposits over
income > India (FY19-23) (FY20-23) annual income accounts in Rs1.5mn (FY19-
US$10,000 (AY17-22) India (FY19-23) 23)
(2019-2023)
Source: Company data, RBI, Government of India, Goldman Sachs Global Investment Research *Demat accounts are stock trading accounts in India
Source: Company data, RBI, Government of India, Goldman Sachs Global Investment Research
Exhibit 3: We expect the population with income of more than US$ Exhibit 4: Equities and gold have driven a strong increase in wealth
10,000 to rise to over 100mn by 2027, growing at a 13% CAGR in India over the past 4 years
Population (mn) with income > USD10,000 Asset value of Indian holdings of equities/Gold
120 (USD bn)
100 3000
100
2500
80 2000
60
60 1500
37 1000
40
24 500
20
20
0
Dec-19 Sep-23
0
2011 2015 2019 2023 2027E Gold Equities
Source: Euromonitor, Goldman Sachs Global Investment Research Source: Bloomberg, Goldman Sachs Global Investment Research
Exhibit 5: ‘Affluent India’ list of stocks has seen consensus Exhibit 6: Top investment ideas from GS India coverage on
upgrades, compared to downgrades for broad-based consumption ‘Affluent India’
stocks
Play on rising 'Affluent India'?
Play at
FY24 consensus revenue estimate (Indexed) the Competitive
107 Headroom* vs Headroom* vs top 10% premium advantage /
China/Brazil > 5x of Urban India > 5x end entry barriers
105 Titan High Yes High
Makemytrip High High Mid
103
Apollo High High Yes High
101 Zomato High High High
Devyani High High Mid
99 Sapphire High High Mid
Eicher Yes High
97
Phoenix High Yes High
95
Jan-23 Feb-23 Mar-23 Apr-23 May-23 Jun-23 Jul-23 Aug-23 Sep-23 Oct-23 Nov-23 Dec-23 Jan-24
Affluent India list of stocks Broad-based consumption stocks
Source: Bloomberg, Goldman Sachs Global Investment Research *Headroom is the per capita consumption vs India’s average consumption
Source: Goldman Sachs Global Investment Research
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‘Affluent India’ comprises ~60mn consumers, and is growing by double

digits
The top 4% of the working age population in India has a per capita income greater than
~US$10,000 per annum, compared to India’s average per capita income of ~US$2,100.
We refer to this top income consumer cohort as ‘Affluent India’. ‘Affluent India’
comprises ~44mn of the working age population in 2023, which can be projected to
~60mn of the total population (based on ~1.07bn working age population and ~1.42bn
total population). This number of consumers (~60mn) and households (~12-14mn) also
corroborate with the household penetration or number of consumers utilising various
discretionary products and services in India. For example, there are ~40mn consumers
who travel by air in India every year, ~30mn monthly transacting users for online food
aggregators, ~30mn broadband connections and ~26mn international travelers from
India.
Exhibit 7: India’s income pyramid - ~4% of the working age Exhibit 8: Affluent India - number of consumers for discretionary
population at an income level of over US$ 10,000/annum (2022) products/services and tax filings below 100mn
Source: Euromonitor, Data compiled by Goldman Sachs Global Investment Research Source: Company data, RBI, Government of India, Data compiled by Goldman Sachs Global
Investment Research
Affluent India’s population is growing by double digits

The number of people in ‘Affluent India’ has been growing by a double digit CAGR over
FY19-23, compared to the overall population CAGR in India of ~1%. We looked at
various data points which corroborate the disproportionate growth of ‘Affluent India’.
Assuming the growth rate at ~13% CAGR of the past 4 years sustains over the next 4
years as well, we expect Affluent India’s population to rise from ~60mn in 2023 to
~100mn in 2027.
n Income segmentation: The total number of people with an income over US$10,000
in the working age population of India has grown at a CAGR of 12.6% over FY19-23,
as per Euromonitor. This compares with the overall working age population CAGR in
India of 1.4% over FY19-23.
n Income tax filing data in India: The total number of individuals filing income tax
returns disclosing income of over Rs1mn (~US$12,000) has grown at a CAGR of
~19% over AY17-22, compared to the overall growth of income tax filings which has
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grown at a CAGR of 8% in the same period.

n Bank term deposits: The number of individual term deposits in banks above
Rs1.5mn (~US$18,500) has grown at a CAGR of 45% over FY19-23, while the
number of term deposits below the Rs1.5mn has grown at a CAGR of 3% over the
same period.
n Credit Card numbers: The number of credit cards in India has grown at a CAGR of
16% over FY19-23, compared to the number of debit cards which grew at a CAGR
of ~1% in the same period. There were ~85mn credit cards in India in FY23,
compared to ~960mn debit cards.
Exhibit 9: Mutiple data points corroborate mid teens growth in the Exhibit 10: Working age population with income over US$ 10,000
number of ‘Affluent’ consumers in India has been growing at 12.6% CAGR over 2019-2023
High growth of Affluent consumers in India Working age population CAGR 2019-2023
14.0% 12.6%
50%
12.0%
10.4%
40%
10.0%
30% 8.0% 6.9%
20% 6.0%
4.0% 3.0%
10%
2.0% 1.4%
0%
0.0%
CAGR of CAGR of CAGR of CAGR of income CAGR of CAGR of
working age number of broadband tax filings of number of number of term -2.0%
population with Credit Cards in connections over Rs1mn demat* deposits over
-4.0% -2.5%
income > India (FY19-23) (FY20-23) annual income accounts in Rs1.5mn (FY19-
US$10,000 (AY17-22) India (FY19-23) 23) Annual income US$1,501 - US$ 2,500 - US$ 5,000 - > US$ 10,000 All India
(2019-2023) <US$ 1,500 2,500 5,000 10,000
*Demat account is a stock trading account in India Source: Euromonitor

Source: Company data, Euromonitor, RBI, Government of India, Goldman Sachs Global Investment
Research
Exhibit 11: We expect the population with income of more than US$ Exhibit 12: The CAGR of income tax filers disclosing over Rs1mn of
10,000 to rise to over 100mn by 2027, implying double-digit CAGR annual income grew is growing at a 19% CAGR
Population (mn) with income > USD10,000 CAGR in number of individual income tax filers (AY17-22)
120 25.0%
100
100
20.0%
80
15.0%
60
60
10.0%
37
40
24
20 5.0%
20
0 0.0%
2011 2015 2019 2023 2027E Income > Rs1mn Income < Rs1mn All filings
Source: Euromonitor Source: Government of India, Data compiled by Goldman Sachs Global Investment Research
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Exhibit 13: There has been rapid growth in bank term deposits over Exhibit 14: Credit cards have doubled in India since FY19 from
Rs1.5mn below 50mn to just above 90mn
CAGR of no. of individual term deposits (FY19-23) No. of credit cards in India (mn)
50.0% 100
45.0% 90
40.0% 80
35.0% 70
30.0% 60
25.0% 50 1,200
20.0% 40 9
1,000 925
15.0% 30
10.0% 20
800
5.0% 10
0.0% 0 600
Rs1.5mn and above Below Rs1.5mn FY19 FY20 FY21 FY22 FY23 Oct-23
Source: RBI Source: RBI
Exhibit 15: Number of credit cards issued have doubled since FY19; Exhibit 16: The number of postpaid mobile connections has grown
while debit cards have seen only a marginal increase strongly over FY20-23
1,200
Postpaid mobile connections(mn)
100 92
980
1,000 925 90
79
80
800
70
59
600 60 54
50
400
40
200 30
95
47 20
0
10
No. of credit cards (mn) No. of debit cards (mn)
0
FY19 Current FY20 FY21 FY22 FY23
Source: Company data, RBI Source: Company data
Wealth effect has been very strong in the past few years
There has been a significant increase in the value of financial and physical assets in India
in the past 3 years which is driving an increasing wealth effect in ‘Affluent India’. The
three key asset classes that have seen a large increase in value over FY19-23 have been
1) equities, 2) gold and 3) property. The increase has been the largest for equities and
gold, while property prices have seen a higher rate of appreciation in the past 3-4 years.
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Exhibit 17: Equities and gold have driven a strong increase in Exhibit 18: The rate of property price appreciation has increased
wealth in India over the past 4 years post FY19
Asset value of Indian holdings of equities/Gold India property price (Rs/sqft)

(USD bn) 35.0%
30.9%
3000
30.0%
2500
25.0%
2000
20.0%
1500
15.0% 13.1%
1000
10.0%
500
5.0%
0
Dec-19 Sep-23
0.0%
Gold Equities Price change (FY19-23) Price change (FY15-19)
Source: Bloomberg, Goldman Sachs Global Investment Research Source: Propequity, Goldman Sachs Global Investment Research
Equities - rising value of holdings and increasing participation in the market
The market cap of the Indian stock market has risen by 80% from 1st January 2020 (just
before the COVID disruption led market fall) to 1st January 2024. In the same period we
have also seen the participation of retail investors rising in the Indian equity market. The
number of ‘demat accounts’ (electronic accounts to trade shares in the stock market)
has increased from ~41mn in FY20 to ~114mn in FY23. Also, the net flow of household
savings into shares has seen a large increase since FY17 and has been consistently high
over FY17-23, which could imply continued rising participation in the equity markets, in a
period of strong market returns. The ownership of equities by consumers is held
through direct retail shareholding and through mutual funds. Both of these have seen an
increase in the past few years. The total ownership of BSE 200 by direct retail investors
has increased from 8.5% in Dec-19 to 9.8% in Sep-23, while the ownership of domestic
mutual funds has increased from 8.1% in Dec-19 to 9.2% in Sep-23.
Exhibit 19: The number of ‘demat’ accounts in India before FY20 Exhibit 20: The household value of mutual fund assets has doubled
was only 40mn in the past 3 years
Number of demat accounts in India (mn) Household value of MF assets (Rs bn)
140 25,000
120 114
20,000
100 90
15,000
80
60 55
10,000
41
36
40 32
25 28
20 21 22 23 5,000
19
20
0 -
FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 Jan-20 Jan-21 Jan-22 Jan-23
*Demat account is a stock trading account in India Source: RBI

Source: Company data, Goldman Sachs Global Investment Research
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Exhibit 21: Households have been deploying more savings into Exhibit 22: India’s market cap has more than doubled since 2019
shares in the past 5 years
Change in household financial assets in shares (Rs bn) India market cap (USD bn)
2500 4,500
4,000
2000 3,500
3,000
1500 2,500
2,000
1000 1,500
1,000
500 500
0
Nov-13
May-16
Jul-15
Nov-18
Jul-20
May-21
Nov-23
Jun-13
Dec-15
Mar-17
Aug-17
Jan-18
Jun-18
Apr-19
Dec-20
Oct-21
Mar-22
Jan-23
Jun-23
Jan-13
Apr-14
Feb-15
Oct-16
Aug-22
Sep-14
Sep-19
Feb-20
0
FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22
Source: RBI Source: Bloomberg
Exhibit 23: Retail ownership of Indian equities has risen Exhibit 24: Domestic mutual fund ownership in BSE 200 has more
significantly post 2019 than doubled post 2015
Domestic MF ownership (as % Total Cap): BSE 200

Retail ownership of Indian equities (%)

10.3% 10.0%
9.2%
9.8% 9.0%
9.8%
8.0%
9.3% 7.0%
6.0%
8.8%
5.0%
8.3% 4.0%
3.0%
7.8%
Sep 16
Sep 18
Sep 23
Sep 15
Sep 17
Sep 19
Sep 20
Sep 21
Sep 22
Mar 15
Mar 17
Mar 20
Mar 22
Mar 16
Mar 18
Mar 19
Mar 21
Mar 23
Jul-20
Jul-22
Jul-23
Jan-20
Jul-21
Jan-22
Nov-19
Mar-20
Jan-21
Nov-20
Mar-21
Nov-21
Mar-22
Jan-23
Mar-23
Nov-22
Sep-19
Sep-20
Sep-21
Sep-22
Sep-23
May-22
May-20
May-21
May-23
Source: Capitaline, Goldman Sachs Global Investment Research Source: Capitaline, Goldman Sachs Global Investment Research
Exhibit 25: Indian equity ownership by insurance companies has Exhibit 26: Value of equity holdings of individuals has risen ~2x
also risen since 2019 since Dec-19
India Equity Ownership by Insurance Companies

Value of equity holdings of retail/MF/insurance in India
6.0%
(USD bn)
5.5% 1,000
900
5.0% 5.3%
800
700
4.5%
600
4.0% 500
400
3.5%
300
200
3.0%
Mar 15
Mar 16
Mar 17
Mar 18
Mar 19
Mar 20
Mar 21
Mar 22
Mar 23
Sep 15
Sep 17
Sep 18
Sep 19
Sep 20
Sep 21
Sep 22
Sep 23
Sep 16
100
0
Dec-19 Sep-23
Source: Capitaline, Goldman Sachs Global Investment Research Source: Capitaline, Goldman Sachs Global Investment Research
Indian households own ~10% of global physical gold, which has appreciated
sharply over FY20-23
Indian households hold ~25,000 tons of gold representing ~10-11% of the world’s
physical gold stock, as per the World Gold Council. The price of gold has increased from
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an average of Rs39,900/10gm in January 2020 to an average of Rs62,200/10gm in

December 2023, a ~65% increase. The value of the total stock of household gold in
India has increased from US$1.1tn to US$1.8tn over 2019 to 2023. This sharp increase
would be a key component of the rising wealth effect on ‘Affluent India’. While a
significant amount of gold is held as jewellery in households, it is still seen as a store of
value and this contributes to the wealth effect.
Exhibit 27: Price of gold has seen a sharp increase post 2019 Exhibit 28: The value of the household stock of gold has increased
sharply in the past 4 years
Gold price INR/10g Value of household gold stock in India (USD bn)
65,000 2,000
1,800
60,000
1,600
55,000
1,400
50,000 1,200
45,000 1,000
800
40,000
600
35,000 400
30,000 200
Jun-19
Jun-20
Jun-22
Jun-21
Jun-23
Sep-21
Sep-23
Dec-18
Sep-19
Mar-21
Dec-19
Sep-20
Dec-20
Dec-21
Sep-22
Dec-22
Mar-19
Mar-20
Mar-22
Mar-23
0
2019 2023
Source: Bloomberg Source: Bloomberg, Goldman Sachs Global Investment Research
Property prices have seen a change in trajectory
While property prices have not risen as sharply as gold and equities, there has clearly
been a change in the pace of increase in property prices in India in the past few years.
The average property prices in India have risen ~30% over FY19-23, compared to a
much slower increase of ~13% over FY15-19, according to Propequity data.
Top end consumption growing much faster than broad based consumption
In the past 3 years we have seen a large divergence in growth rates of consumer
companies and categories in India. One of the key factors driving this is that companies
which address consumption from the top end of India’s income pyramid have grown
much faster compared to companies in the same category which address broad based
consumption in India.
n Premium players within the same category growing faster: In most industries,
we have seen companies which address relatively more affluent consumers have
been growing faster than companies which address broad based or mass
consumption. These trends are visible in FMCG (Nestle India growing faster than
Hindustan Unilever), footwear (Metro growing faster than Bata), fashion (Trent
growing faster than V-Mart), passenger vehicles (SUVs growing faster than entry
level cars) and 2-wheelers (Eicher growing faster than the industry).
n Within companies, premium segments have grown faster: Within the same
company, we have seen a sharp divergence in the premium portfolio and the mass
portfolio. HUL’s premium portfolio has grown 2x that of the company’s overall
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revenue growth. For United Spirits, the ‘Prestige & above’ segment brands have
grown much faster than ‘popular’ segment brands. These trends are in concurrence
with the data showing the much faster growth of Affluent India, which is likely to
continue going forward.
n Companies exclusively addressing premium consumers growing rapidly:
Companies in categories which largely address top income consumption like
jewellery (Titan), travel (Makemytrip, Indian Hotels), premium retail (Phoenix Mills),
premium online beauty (Nykaa) and premium healthcare (Apollo Hospitals) have
seen strong growth.
n Credit Card spending has increased 2.5x since FY19: Credit cards tend to be
largely used by upper income consumers. There are slightly more than 90mn credit
cards in India (having grown from slightly below 50mn in FY19). Many consumers
have more than one credit card. Thus, most credit cards are likely to be owned by
our definition of ‘Affluent India’, which compares to ~60mn consumers. The total
spend on credit cards has increased 2.5x if we take the trailing 12 months vs FY19.
Exhibit 29: Nestle India has grown faster than HUL in the past 4 Exhibit 30: Trent has seen much faster growth than V-Mart in the
years past 4 years
FY19-23 growth FY19-23 growth

60% 140%
100%
50% 120%
80%
100%
40%
60% 80%
30%
40% 60%
20%
40%
20%
10% 20%
0%
0% 0%
HUL sales* Nestle sales V-Mart Trent (ex-Zudio)
-20%
Source: Company data, Goldman Sachs Global Investment Research, *HUL organic sales growth Source: Company data, Goldman Sachs Global Investment Research
(ex-Nutrition)
Exhibit 31: SUV volume growth has outpaced overall car sales Exhibit 32: Royal Enfield volumes have recovered slightly above
substantially pre-Covid levels but 2-wheeler industry volumes continue to be
substantially below
TTM vs FY19 TTM vs FY19

160% 5%
140%
0%
120%
-5%
100%
80% -10%
60%
-15%
40%
-20%
20%
0% -25%
PV industry volumes SUV volumes 2-wheeler industry volume growth Eicher (Royal Enfield) volume growth
Source: Company data, Goldman Sachs Global Investment Research Source: Company data, Goldman Sachs Global Investment Research
12 January 2024 9
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Exhibit 33: The ‘Prestige & above’ brands of United Spirits have Exhibit 34: Metro has grown much faster than Bata in the past 4
grown much faster than the company’s ‘popular’ brands years
50%
40%
100% 1HFY24 growth FY19-23 growth
18% 30% 80%
16% 50% SP70%

mass spirits UNSP Prestige & Above spirits
20%
14%
10% 60%
12% 0%
0% Trent V-Mar 50%
10% Bata sales Metro Bra
40%
8%
30%
6%
20%
4%
FY19-23 growth 10%
2%
80%
0% 0%
UNSP70%
mass spirits UNSP Prestige & Above spirits Bata sales Metro Brands sales
Exhibit 35: Companies which largely address upper income Exhibit 36: Number of credit cards issued have doubled since FY19;
consumers have seen a strong CAGR over FY19-24E while debit cards have seen a marginal increase
1,200
FY19-24 CAGR
20% 980
1,000 925
18%
16% 800
14%
12% 600
10%
400
8%
6%
200
4% 95
47
2% 0
0% No. of credit cards (mn) No. of debit cards (mn)
Titan revenue Apollo Hospitals revenue Phoenix Mills revenue Makemytrip gross
bookings FY19 Current
Source: Company data, Goldman Sachs Global Investment Research Source: Company data, RBI
Exhibit 37: The number of credit cards have doubled over FY19 Exhibit 38: Spending on credit cards in the last twelve months are
2.5x higher than FY19 levels
80
No. of credit cards in India (mn) Spends on credit cards in India (Rs bn) 70
100 18,000 60
90 50 1
16,000
80 40
14,000
1
70 30
12,000
60 20
10,000
50 1,200 10
8,000
40 0
9
1,000 925 6,000 FY19
30
20 4,000
800
10 2,000
0 600 0
FY19 FY20 FY21 FY22 FY23 Oct-23 FY19 FY20 FY21 FY22 FY23 LTM
Source: RBI, Goldman Sachs Global Investment Research Source: Company data, RBI, Goldman Sachs Global Investment Research
Top end consumption has continued to outperform even post the removal
of COVID restrictions
The initial hypothesis was that the divergence in consumption for companies that
12 January 2024 10
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address top end consumption compared to those that address broad based
consumption was due to the impact of COVID restrictions. COVID restrictions had a
greater impact on low income jobs like those in the service industries such as hotels
and restaurants. However, COVID restrictions were fully lifted in early 2022, and yet the
divergence in growth rates has continued till the end of 2023. We are now 24 months
post the lifting of all restrictions, and most services shut down during COVID have fully
opened up. The divergence was not just caused by COVID restrictions, but by
fundamentally faster growth of ‘Affluent India’, due to the many factors we discussed.
Leisure, Jewellery, Out-of-home food, Healthcare likely to be the key

beneficiaries
The rapid growth of ‘Affluent India’ is likely to have a disproportionate impact on

categories which derive a large part of their consumption from the top 50-60mn
consumers in India. Also, as the size of Affluent India expands to ~100mn over the next
4 years, more categories could become net beneficiaries. To identify which categories
see the largest increase in consumption as the number of consumers in Affluent India
rises rapidly, we look at three different approaches.
n Comparison of consumption in India with other countries at ~USD10,000 per

capita income: We compared the category wise per capita consumption of India
with other large economies such as China/Brazil, which have a per capita income of
~USD10,000. The largest gap in per capita consumption for China/Brazil (which are
at an average per capita income of ~USD10,000) with the India average is in
categories like leisure/hotels/recreation/out of home food/durables, followed by
medical services. In China/Brazil, the per capita consumption in
leisure/hotels/recreation/out-of-home food is ~18-20x that of India, compared to
overall consumption which is 2-3x that of India. As the population of ‘Affluent India’
grows at a double digit CAGR, we expect high growth in these categories in India.
n Comparison of India’s average consumption with the top 10% of urban India:
We compared the category wise per capita expenditure of the top 10% of urban
India with the overall India average consumption expenditure. The top 10% of urban
India represents ~3.5% of the population, very similar to the population proportion
of ‘Affluent India’ as per our calculations. The largest gap in per capita consumption
for the top 10% of urban India compared to the average per capita consumption in
India, is in durable goods, healthcare services, jewellery, and out of home food. In
these categories, the per capita consumption in the top 10% of urban India was
8-10x that of the average of India. As the population of ‘Affluent India’ grows at a
double digit CAGR, we expect high growth in these categories in India.
n Current consumer base of various premium brands/categories: We look at
brands / categories which largely address the top 15-20 million households or the
top 60mn consumers in India. The bottom up data in some of these categories also
indicate that they largely address Affluent India currently. For example, there are
~40mn flight passengers in India every year, the total monthly active users for online
12 January 2024 11
Goldman Sachs
food delivery is ~25-30mn, Titan’s jewellery business has an annual transacting user
base of less than 3mn consumers in India and Nykaa’s online beauty business has
~10mn annual transacting consumers. Travel/leisure, out of home food (online food
delivery/QSR) and jewellery largely address Affluent India and thus are likely to
benefit as this segment grows rapidly. Also, premium brands within categories
largely address Affluent India. These would be premium 2-wheelers/cars, premium
fashion retail, premium personal care and premium healthcare.
Exhibit 39: Per capita consumption gap between India and China is Exhibit 40: Per capita consumption gap between India and Brazil is
highest in Leisure, Hotels, Durables and Catering highest in Leisure, Hotels, Durables and Catering
China vs India 2022 (per capita consumption) Brazil vs India 2022 (per capita consumption)
25x 35x
30x
20x
25x
15x 20x
10x 15x
10x
5x
5x
0x 0x
Source: Euromonitor Source: Euromonitor
Exhibit 41: The largest increase in consumption for top 10% of urban India vs the average consumption in
India are in durable goods, medical services, out of home food and jewellery
India's urban top 10% vs India's average per capita expenditure

14x
12x
10x
8x
6x
4x
2x
0x
Source: NSSO, Goldman Sachs Global Investment Research
Investment ideas exposed to the rise of ‘Affluent India’ - higher growth for
longer
We look at investment ideas based on the analysis in the above section, which either
play on 1) categories like jewellery, healthcare, travel/leisure and out of home food or 2)
12 January 2024 12
Goldman Sachs
have a major focus on premium brands within any category. These categories are likely
to see high growth rates sustain for a longer period, given the double digit CAGR of the
‘Affluent India’ consumer cohort. The following is a list of categories that benefit from
rising ‘Affluent India’ and a list of stocks (including stocks not in GS coverage) which
have exposure to these categories.
Exhibit 42: Companies with exposure to categories which benefit from rising Affuent India and those positioned at the premium end of large
categories
*Headroom is the per capita consumption vs India’s average consumption
Source: Company data, Data compiled by Goldman Sachs Global Investment Research
Consensus estimates for ‘Affluent India’ exposed stocks have seen consistent
upgrades, while that of broad based consumption has seen downgrades
Our analysis also shows that the Bloomberg consensus revenue estimate of this list of
stocks has seen consistent upgrades in the past 2 years, as they have continued to
positively surprise the market on growth expectations. On the other hand, the list of
consumer stocks which address broad based consumption (home and personal care,
mass 2-wheelers, paints, mass footwear, mass fashion) has seen downgrades in
consensus revenue estimates in the same period. Thus, the positive surprise delivered
by the ‘Affluent India’ list has not been driven by a broad based tailwind in overall
consumption growth in India. Rather, it has grown in an environment where broad based
consumption has been muted.
12 January 2024 13
Goldman Sachs
Exhibit 43: ‘Affluent India’ list has seen consensus sales upgrades Exhibit 44: ‘Affluent India’ list has seen consensus sales upgrades
for FY24, in an environment where there have been downgrades for for FY25, in an environment where there have been downgrades for
the ‘broad-based’ India consumption names the ‘broad-based’ India consumption names
FY24 consensus revenue estimate (Indexed) FY25 consensus revenue estimate (Indexed)
105
107
104
105 103
103 102
101
101
100
99
99
97
98
95 97
Jan-23 Feb-23 Mar-23 Apr-23 May-23 Jun-23 Jul-23 Aug-23 Sep-23 Oct-23 Nov-23 Dec-23 Jan-24 Apr-23 May-23 Jun-23 Jul-23 Aug-23 Sep-23 Oct-23 Nov-23 Dec-23 Jan-24
Affluent India list of stocks Broad-based consumption stocks Affluent India list of stocks Broad-based consumption stocks
Source: Bloomberg, Goldman Sachs Global Investment Research Source: Bloomberg, Goldman Sachs Global Investment Research
Top picks within GS India coverage - marrying the top down and bottom up factors
While there are many stocks which benefit from the rapid consumption growth of
‘Affluent India’, not all of these businesses have the competitive advantages and
business model strength to sustain their competitive positions as competition rises.
Hence, we combine the 1) top down beneficiaries of rising Affluent India and 2) the
bottom up view of these companies in terms of business model strength, past
execution track record and future plans. The top stock ideas within GS India coverage to
play this theme are Titan, Apollo Hospitals, Makemytrip, Eicher Motors, Zomato,
Devyani, Sapphire and Phoenix Mills. Not only do these benefit from the rise of
‘Affluent India’, but we also see these as high quality businesses with strong
competitive advantages, proven track records of past performance and market
leadership within their segments. This gives us greater confidence that they will be able
to hold their competitive position within these high growth categories. We have detailed
sections in the report on each of these companies and their investment theses and the
impact of rising consumption in ‘Affluent India’.
12 January 2024 14
Goldman Sachs
Exhibit 45: Top investment ideas from GS India coverage on our ‘Affluent India’ framework
*Headroom is the per capita consumption vs India’s average consumption
Key risks to the investment case based on the sustained growth of ‘Affluent India’
We discuss the key risks to the investment case for stocks which play on the growth of
‘Affluent India’.
n Rise of competitive intensity in attractive categories can hurt incumbents and
the profit pool: The high growth in categories which address the top end of the
income pyramid in India will naturally attract competition from new entrants
(including international brands) and also from existing companies. This can hurt the
incumbents’ market share and can also lower the profit pool of the category if there
is aggressive price led competition. For example, premium beauty is seeing many
new brands scale up (Mamaearth being a good example) and restaurants are seeing
many new brands expanding (La Pino Pizza is an example). Thus, the incumbents
will have to have strong competitive advantages to be able to hold their market
shares and pricing power in these segments.
n A correction in asset prices could affect the wealth effect: The wealth effect from
the sharp increase in the stock market and gold can reverse if there is a substantial
correction in asset prices. This can impact the positive sentiment and affluent
consumers could also slow down the rate of consumption growth.
n Significant change in government policies on taxation could hurt purchasing
power: There could be a risk to disposable income growth for affluent consumers if
12 January 2024 15
Goldman Sachs
the government significantly raises income tax rates for upper income consumers.
As only ~6.5% of the Indian working age consumers pay income tax, the impact of
tax increases will largely be on upper income consumption.
12 January 2024 16
Goldman Sachs
Titan Company: Industry tailwinds coupled with execution, maintain Buy
TITN.BO 12m Price Target: Rs4125 Price: Rs3714.35 Upside: 11.1%
Buy GS Forecast
3/23 3/24E 3/25E 3/26E
Market cap: Rs3.3tr / $39.7bn Revenue (Rs mn) New 405,750.0 465,380.4 556,288.4 656,926.2
Enterprise value: Rs3.4tr / $40.6bn Revenue (Rs mn) Old 405,750.0 460,595.9 550,594.8 646,141.9
3m ADTV: NA EBITDA (Rs mn) 48,790.0 54,612.9 67,505.0 81,637.7
India EPS (Rs) New 36.61 40.71 52.06 63.35
India Consumer EPS (Rs) Old 36.61 40.70 51.50 61.40
P/E (X) 66.4 91.2 71.4 58.6
M&A Rank: 3 P/B (X) 18.2 23.0 18.6 15.1
Leases incl. in net debt & EV?: Yes Dividend yield (%) 0.5 0.3 0.4 0.4
CROCI (%) 30.3 23.6 23.4 25.6
3/23 6/23E 9/23E 12/23E

EPS (Rs) 8.22 8.48 10.31 11.96
Source: Company data, Goldman Sachs Research estimates, FactSet. Price as of 10 Jan 2024 close.
Titan plays on rising consumption of Affluent India: Titan has a ~7-8% market share
in jewellery (FY22), which is largely the upper income end of jewellery consumption
given the higher mix of diamond jewellery and complex gold jewellery compared to
other large organized jewellers and mom-and-pop stores. Thus, the total number of
annual transacting consumers at Titan’s flagship retail brand for jewellery ‘Tanishq’ is
less than 3 million a year, likely at the top end of our estimate of ‘Affluent India’. Titan is
priced at a premium to most other jewellers in the market due to its aspirational brand,
range of offerings and transparent policies around exchange of old jewellery. As we
expect the cohort of ‘Affluent India’ consumers to grow by a double digit CAGR, Titan
will have a natural tailwind of increasing consumer footfall and rising market share.
Titan has a strong market share gain led growth story: Nearly ~65% market share in
the jewellery market is with standalone mom-and-pop jewellery stores. Titan is gaining
market share in the jewellery market through 1) entering new cities, 2) increasing its
share of wedding jewellery by greater regional customization and 3) international
business expansion. We expect Titan’s jewellery network for the flagship format
‘Tanishq’ to expand from 250 cities in FY23 to 320 cities in FY26. The company
continues to focus on regionalization of wedding jewellery designs, as Titan is
significantly under indexed in wedding jewellery vs the overall India jewellery market.
12 January 2024 17
Goldman Sachs
Exhibit 46: Store expansion a key growth driver for Tanishq Exhibit 47: Tanishq is focusing on increasing its share of wedding
jewellery, where the company is under indexed
Tanishq in number of cities Share of wedding jewellery

350 70%
320
295 60%
300 60%
270
251 50%
250 234 50%
218 40%
204
200 178 40%
159 30%
150 20% 30%

121
111
100 10% 20%
50 0% 10%
0 0%
FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24E FY25E FY26E Titan India jewellery market
Caratlane is a new growth engine for Titan: Caratlane is India’s leading digital first
omni channel jewellery brand, and represents ~7% of Titan’s sales in FY24E. Successful
expansion of the Caratlane brand has meaningfully expanded the relevant jewellery TAM
for Titan, creating a new long-term growth driver. Caratlane caters to 1) younger
consumers, 2) lower ticket diamond jewellery and 3) gifting occasions. These
consumers, products and occasions are to a great extent different from Titan’s flagship
jewellery business Tanishq, which has average ticket sizes 5x that of Caratlane, a high
70% sales of gold jewellery and has more middle-aged consumers. We estimate
Caratlane’s FY23E gross margins were higher than Titan’s core jewellery business by
~1000bps, while EBIT margins were ~500bps lower. As operating leverage kicks in with
scale, we expect Caratlane’s EBIT margins to converge with Titan’s core jewellery
business.
Exhibit 48: We expect strong growth in Caratlane revenues to Exhibit 49: We also expect Caratlane’s EBIT to grow as scale
continue benifits kick in
Caratlane sales (Rs mn) Caratlane EBIT (Rs mn)
60,000 5,000
50,000 4,000
3,000
40,000
2,000
30,000
1,000
20,000
0
10,000 -1,000
0 -2,000
FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24E FY25E FY26E FY18 FY19 FY20 FY21 FY22 FY23 FY24E FY25E FY26E
We increase our estimates, and raise target price: We increase our FY25E/FY26E
earnings estimates by ~1%/3%, to build in 1) faster growth in the core Tanishq
business, 2) margin expansion in Caratlane. We also raise our target multiple to ~65x
(from 60x), which is in-line with the 5-year average 1-year forward PE for Titan. Given the
past track record, visibility of market share gains, greater conviction on stronger growth
in ‘Affluent India’ consumption and scale up of new growth drivers like Caratlane, we
12 January 2024 18
Goldman Sachs
believe Titan is unlikely to trade at a discount to its 5-year average PE in the medium
term. As a cross-check, the reverse DCF on Titan implies a 15% revenue CAGR. The
number of consumers in the Affluent India cohort is growing at 13-15% CAGR, and
hence a company like Titan which is gaining market share and also scaling up new
business segments is likely to grow ahead of 15%. We also roll forward valuation to Q5
to Q8 earnings. Our target price increases to Rs4,125 (prior Rs3,525). We maintain Buy.
12 January 2024 19
Goldman Sachs
Eicher Motors: Moat in premium 2W segment + unique position in EV

transition; Buy
EICH.BO 12m Price Target: Rs4700 Price: Rs3887.45 Upside: 20.9%
Buy GS Forecast
3/23 3/24E 3/25E 3/26E
Market cap: Rs1.1tr / $12.8bn Revenue (Rs mn) 144,422 163,167 182,961 207,554
Enterprise value: Rs1.0tr / $12.6bn EBITDA (Rs mn) 34,436 42,657 51,231 59,262
3m ADTV: NA EPS (Rs) 106.34 147.91 174.35 201.52
India P/E (X) 29.4 26.3 22.3 19.3
India Autos P/B (X) 5.7 5.9 5.0 4.2
Dividend yield (%) 1.2 1.2 1.4 1.6
M&A Rank: 3 CROCI (%) 17.5 19.3 20.3 20.9
Leases incl. in net debt & EV?: Yes
9/23 12/23E 3/24E 6/24E
EPS (Rs) 37.06 36.14 41.22 42.77
Usually the 2nd or 3rd motorcycle in a customers’ ownership journey,

representing aspirational positioning: 350cc+ segment volumes have been
consistently outgrowing the broader 2W market. Eicher Motors is India’s market leader
in premium motorcycles (cruisers, roadsters, adventure motorcycles marketed under the
Royal Enfield brand name). ~85% of its revenue is from the domestic India market
where the 350cc+ motorcycle category has been growing at a +11% CAGR over FY15
to FY23 vs the broader 2W market which has been flat over this time frame. In FY24
YTD, 350cc+ motorcycles saw growth of +15% vs the broader 2W market of +7%.
Approximately 85% of Royal Enfield customers upgraded to Royal Enfield from other
2W brands. Royal Enfield is typically not the first motorcycle that a customer owns (only
7% of Royal Enfield customers are first time motorcycle buyers).
Premium pricing, superior scale setup profitable growth journey: Royal Enfield’s
ASP is ~3x compared to the ASP of the average motorcycles sold by peers like Hero,
Bajaj or TVS Motor. The strong brand legacy (established in the 1950s), evolved product
offering, lifestyle appeal (many car owners also own Royal Enfield motorcycles as a
second vehicle for leisurely rides – breakfast rides, hill expeditions and so on); and the
strong sense of community building as part of the ‘Royal Enfield Owner Group’ are all
strong draws for aspirational motorcycling customers. This is manifested in Eicher
Motors’ industry high profitability. At 26%+ EBITDA margin profile as of end Sept, 2023,
it is the most profitable auto OEM in India and the third most profitable Auto OEM
globally after Ferrari and Porsche. The company’s long history of manufacturing and
evolving this segment has helped it to build more durable moats including the market
leading brand status, wide aftersales network (important for premium motorcyclists and
offroaders), efficient cost structure, as well as faster time to market between product
12 January 2024 20
Goldman Sachs
conceptualization and launch.
Resilience to competitive challenges built on merit of product design and portfolio

evolution: The company expects the domestic India premium motorcycling market to
reach 2mn units by 2030 vs 1mn units today, representing forward volume growth
potential in this category of 10%+ CAGR. Royal Enfield presently enjoys ~85% market
share in the India 350cc+ motorcycles segment. More than 80% of Eicher Motors’
SOTP value comes from the Royal Enfield business. We like the investment case at
Royal Enfield given the company’s exposure to the premiumization trend that
characterizes automotive purchasing in India as well as (1) Lower near term risk from
electrification in premium motorcycling; (2) Strong pipeline of upcoming product
launches (Shotgun 650 unveiled, ~10 new models / refreshes expected over the next 3
years); (3) Ability to withstand multiple competitive threats (initially from Bajaj, Honda,
Jawa Motorcycles Yezdi, TVS Motor) and more recently from Harley Davidson and
Triumph; and (4) Upside optionality from higher contribution by more profitable
accessories / merchandising business. We are Buy rated with a SOTP based TP of
Rs4,700.
Exhibit 50: Only 1 out of the ~300 electric 2Ws launched so far have
comparable performance to the premium motorcyle (250cc+) segment
where Royal Enfield is active
# of Electric 2W models launched in India 2W mkt
# of Premium Electric Motorcycle Models 1
# of Electric Motorcycle models 22
# of Electric Scooter models 274
0 50 100 150 200 250 300
Source: Bikedekho, Zigwheels, Goldman Sachs Global Investment Research
12 January 2024 21
Goldman Sachs
Exhibit 51: We expect premium 250cc+ motorcycles to form ~41% of India 2W industry EBITDA profit pool by
FY28E vs 27% today, given relatively lower risk from electrification in the medium term
We expect premium 250cc+ motorcycles to form ~41% of India 2W

120% industry profit pool by FY28E vs the 27% today, given relatively lower risk
from electrification in the medium term
100% Motorcycles (above 250cc) Scooters Motorcycles (below 250cc) Mopeds Mopeds, 1%
2% 1% 2% 2% 2% 1%
Motorcycles (below 250cc),

32% 25%
80% 36%
43%
53% 53% 48%
60% Scooters, 32%

31%
31%
26%
40% 22%
19%
24%
Motorcycles (above
20% 250cc), 41%
32% 35%
27% 28% 29%
22%
0%
FY22 FY23 FY24E FY25E FY26E FY27E FY28E
Source: SIAM, Company data, Goldman Sachs Global Investment Research
Exhibit 52: Export sales are most accretive to overall ASP for Royal
Enfield vs other listed motorcycle companies in India, as their
motorcycles sell in more developed markets vs peers who sell into
emerging markets
Export ASP Premium vs Domestic ASP

30%
24%
25%
20%
15%
10%
5%
5%
0%
-5%
-4%
-10%
-15%
-20%
-19%
-25%
Bajaj Auto TVS Motor Hero MotoCorp Royal Enfield
12 January 2024 22
Goldman Sachs
Exhibit 53: 250cc+ motorcycles have been the fastest growing motorcycle category (by volume) in 7 of the past 10 years in the Indian 2W mkt
FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23
75-110cc Motorcycles 5% 1% -3% -3% 15% 13% -24% -15% -8% 5%
110-125 cc Motorcycles -1% -9% 1% 6% 16% -11% 22% 2% -9% 22%
125-250cc Motorcycles 1% 15% 0% 18% 5% 12% -25% -11% -23% 22%
250cc+ Motorcycles 71% 62% 52% 31% 25% -1% -18% -10% -6% 38%
Scooters 23% 25% 12% 11% 20% 0% -17% -20% -11% 22%
Mopeds -8% 5% -4% 23% -3% 2% -28% -3% -23% -7%
Source: SIAM, Goldman Sachs Global Investment Research
Exhibit 54: Eicher Motors is currently the 3rd most profitable listed Automotive OEM globally, behind Ferrari and Porsche
Last Financial Year EBITDA margin (%) of Global Auto OEMs

40.0%
35.6%
35.0%
30.0%
26.7%
25.0% 23.7%
20.0%
15.0%
10.0%
5.0%
0.0%
Suzuki Motor
Guangzhou Auto
Hino Motors
Isuzu Motors
Kia Motors
Cummins Inc.
Eicher Motors
Nissan Motor
Sinotruk
TVS Motor
Dongfeng Motor
Porsche AG
Tata Motors
Seres Group
SAIC Motor
Aisin
Hero MotoCorp
BAIC Motor
Ferrari NV
Mitsubishi Motors
BYD
Mazda Motor
Li Auto
Geely
Subaru Corp.
Denso
Renault
Mercedes-Benz
Honda Motor
Chongqing Changan
Volkswagen
Bajaj Auto
Tesla Inc.
Yamaha Motor
Ashok Leyland
General Motors Co.

Daimler Truck
Hyundai Motor Co.
Volvo Car AB
Great Wall Motor
Paccar Inc.
Maruti Suzuki India
Ford Motor Co.
Weichai Power
Aston Martin
Mahindra & Mahindra
-5.0%
-10.0%
Source: Company data, Datastream, Data compiled by Goldman Sachs Global Investment Research
12 January 2024 23
Goldman Sachs
Devyani and Sapphire (Yum India franchisees): KFC poised for rapid store
expansion
DEVY.BO 12m Price Target: Rs210 Price: Rs186.85 Upside: 12.4%
Buy GS Forecast
3/23 3/24E 3/25E 3/26E
Market cap: Rs225.2bn / $2.7bn Revenue (Rs mn) 29,977 33,731 42,210 51,091
Enterprise value: Rs240.6bn / $2.9bn EBITDA (Rs mn) 6,556 6,692 9,200 11,685
3m ADTV: NA EPS (Rs) 2.37 1.22 2.23 3.20
India P/E (X) 72.3 153.7 84.0 58.4
India Consumer P/B (X) 21.4 20.3 16.4 12.9
Dividend yield (%) -- -- -- --
M&A Rank: 3 CROCI (%) 27.0 21.8 24.2 25.4
6/23 9/23E 12/23E 3/24E
EPS (Rs) 0.49 0.39 0.13 0.17
Exhibit 55:
SAPI.BO 12m Price Target: Rs1850 Price: Rs1440.35 Upside: 28.4%
Buy GS Forecast
3/23 3/24E 3/25E 3/26E
Market cap: Rs91.5bn / $1.1bn Revenue (Rs mn) 22,656 26,033 32,647 39,238
Enterprise value: Rs100.9bn / $1.2bn EBITDA (Rs mn) 4,284 4,833 6,492 8,086
3m ADTV: NA EPS (Rs) 36.73 11.01 20.60 30.45
India P/E (X) 34.3 130.9 69.9 47.3
India Consumer P/B (X) 6.4 6.9 6.3 5.6
Dividend yield (%) 0.0 0.0 0.0 0.0
M&A Rank: 2 CROCI (%) 21.0 18.4 20.9 21.8
6/23 9/23E 12/23E 3/24E
EPS (Rs) 3.93 2.40 3.07 1.56
QSR players will continue to benefit as number of ‘Affluent Indians’ grow at

double-digits: QSR has been the fastest growing restaurant format in India with ~25%
CAGR over FY10-20. We believe that demand from the Affluent India cohort has been a
key driver of QSR growth. The customer base of QSR in India at ~30mn is a subset of
our estimate of ~60mn ‘Affluent Indians’. QSR players are highly likely to benefit as the
population of this cohort rises (to ~100mn by FY27, assuming the double-digit population
growth rate of this cohort over FY19-23 continues). Despite the very high ~25% CAGR
12 January 2024 24
Goldman Sachs
over FY10-20, QSR penetration within overall out of home food consumption in India
remains low at about ~5% (FY20). Hence, the QSR sector has a long growth runway in
India. Higher disposable incomes for the ‘Affluent India’ cohort is also likely to increase
frequency/ premiumisation in QSR. The urban population in India spends ~USD10 per
capita on out of home food consumption at chained restaurants, vs ~USD140 for China
(2022, Euromonitor).
We expect KFC to be the fastest growing QSR player: We prefer KFC over other QSR
formats in India because of its under-penetration. There are ~1000 KFC outlets in India
vs more than 3000 pizza QSR outlets. KFC is also by far the dominant friend chicken
player in India, with Popeye’s being the second with less than 50 stores. The reason for
KFC’s under-penetration was the lack of attractive unit economics before FY19, when
the payback period was ~6 years. Since then, a combination of initiatives like lowering
store sizes and higher share of delivery due to the rise of food aggregators have turned
around KFC’s unit economics, and the payback period for a KFC store in India has
reduced to ~3 years. With this, we have been seeing a rapid scale up in KFC as it
catches up to other QSR formats to address its under-penetration.
Cyclical demand slowdown in QSR has likely bottomed out: We see the current
demand slowdown in QSR as cyclical. The main reason for the slowdown was sharp
price hikes (10-15%) implemented a year ago, as commodity prices had risen. Now that
there has been pricing stability for ~12 months, we expect demand to revive. As per the
companies, most QSR players have already arrested the decline in average ticket size
while footfall has been steady. Our hypothesis of the recovery is based on 1) stable
product prices for QSR chains over the past 12 months (after high price hikes in 2022)
helping affordability and 2) the lower overall inflation levels should reduce the pressure
on consumer disposable income in the top 10-15 cities. For this imminent cyclical
recovery in QSR demand, we prefer KFC because of lower competition in the fried
chicken category vs rising competition in the Pizza category.
We are Buy rated on Devyani and Sapphire, the two KFC franchisees: Given the
structural tailwinds (improved payback periods) and relative store under-penetration
catch-up playing out, KFC will continue to add stores at ~20% CAGR over FY24-26 vs
~10% for the largest player. Despite the high store addition, KFC’s SSSG has
outperformed other formats, and is likely to do so going forward as well because of the
low competitive threat in fried chicken. We have a Buy rating on both the KFC
franchisees in India, Devyani (TP Rs210, based on 34x EV/EBITDA) and Sapphire (TP
Rs1,850, based on a blend of 85% fundamentals and 15% M&A-target multiple based
methodology).
12 January 2024 25
Goldman Sachs
Exhibit 56: KFC store count to grow by ~20% CAGR over FY23-26 Exhibit 57: We expect a cyclical recovery in KFC’s average daily
sales per store (ADS) to start in FY25
KFC store count KFC ADS

1,600 145
1,400 140
1,200 135
130
1,000
125
800
120
600
115
400 110
200 105
0 100
FY19 FY20 FY21 FY22 FY23 FY24E FY25E FY26E Devyani KFC ADS Sapphire KFC ADS
Devyani KFC Sapphire KFC FY23 FY24E FY25E FY26E
12 January 2024 26
Goldman Sachs
Apollo Hospitals: Improving clinical outcomes for lifestyle diseases,

maintain Buy
APLH.BO 12m Price Target: Rs6675 Price: Rs5797.9 Upside: 15.1%
Buy GS Forecast
3/23 3/24E 3/25E 3/26E
Market cap: Rs806.9bn / $9.7bn Revenue (Rs mn) New 166,124.5 191,705.9 229,397.2 273,193.9
Enterprise value: Rs878.3bn / $10.6bn Revenue (Rs mn) Old 166,124.5 192,722.1 229,007.3 270,711.4
India EPS (Rs) New 46.77 72.60 135.38 183.82
India Healthcare EPS (Rs) Old 46.77 74.98 134.55 178.58
P/E (X) 91.6 79.9 42.8 31.5
M&A Rank: 3 P/B (X) 9.9 11.9 9.7 7.9
Leases incl. in net debt & EV?: Yes Dividend yield (%) 0.4 0.3 0.4 0.8
CROCI (%) 14.9 17.0 20.9 23.3
9/23 12/23E 3/24E 6/24E

EPS (Rs) 16.11 21.00 23.89 30.44
Geared for growth from tertiary/quaternary care: Apollo is India’s largest hospital
chain with c. 9155 beds spread across the country. The large metros account for 60%
of APLH’s operational beds where they earn an ARPOB (Average revenue per occupied
bed day) of c. US$1000 or c. US$3500 per inpatient admission. Given the disease
burden in the country is shifting towards “Lifestyle” vs. Communicable, Apollo’s ARPOB
is industry leading on a combination of performing the largest number of
tertiary/quaternary care procedures by virtue of its brand underpinned by the depth of its
13,200 practicing doctors (both employed and service fee based) in the entire network.
Exhibit 58: Apollo hospitals perform the largest # of tertiary and Exhibit 59: Reporting solid growth in more advanced technologies
quaternary care like robotic surgeries
Key figures for few types of tertiary/quaternary care
Procedures # in FY23
# of Robotic surgeries
Radiotherapy fractions 270,000 4500
Chemotherapy Cycles 103,000 4000
Cardiac procedures 73,500 3500

3000
Neuroscience discharges 37,400 2500
Joint/Ortho procedures 35,900 2000
Robotic Surgeries 2,400 1500

1000
Kidney transplants 1,300 500
Bone Marrow transplants 270 0
2020 2021 2022 2023
Liver transplants 250
Source: Company data Source: Company data
Alongside the capacity and capability for these procedures, Apollo has been delivering
12 January 2024 27
Goldman Sachs
on clinical outcomes that are best in class, comparable with western world
benchmarks (as seen below). Affluent Indians will likely be paying very close attention to
these metrics, given they have the ability to fly abroad and get treated at centers of
excellence, all over the world.
Exhibit 60: Apollo has been delivering best in class clinical outcomes
As of FY23 for Apollo
# Parameter Unit Reference Benchmark Apollo vs.
Catheter Related Blood Cleveland clinic
1
Stream Infection
%
2013
2.00% 0.33% ✓
US National average
2 ALOS post Angioplasty days
2011
2.50 2.58 =
ALOS post Total hip Agency for healthcare
3
replacement
days
research US 2012
4.20 3.45 ✓
Complication rate post CIHI

4
Total Knee replacement
%
2016
0.60% 0.21% ✓
Door to CT/MRI time
5
under stroke in ER
minutes Internal Apollo 45.00 32.17 ✓
Catheter Related Blood per 1000 central National healthcare
6
Stream Infection line days safety network 2012
1.00 0.59 ✓
Ventilator Associated per 1000 ventilator National healthcare

7
Pneumonia line days safety network 2012
0.90 0.68 ✓
Catheter related Urinary per 1000 catheter National healthcare

8
track infection line days safety network 2012
2.00 0.66 ✓
Source: Company data
Higher health awareness and rising insurance penetration driving ARPOB: We see
Apollo Hospitals as a beneficiary of exposure to the ‘Affluent India’ cohort which
includes households with a high per capita income with a propensity to pay for high end
tertiary/quaternary care either out of pocket (cash) or that are sufficiently covered by
health insurance. As of FY23, 84% of APLH’s payor mix comprised of these two
segments, and we expect them to remain dominant going forward with further shifts
towards insurance as awareness increases.
Exhibit 61: Growth in health insurance has been one of the drivers Exhibit 62: Apollo to continue growing ARPOB ahead of CPI health
of higher ARPOB
ARPOB vs CPI health

Payor mix
20.0%
Institutional, 10% 18.0%
16.0%
International, 6%
14.0%
12.0%
10.0%
Cash, 42% 8.0%
6.0%
Insurance, 42%
4.0%
2.0%
0.0%
CPI health (yoy) Apollo ARPOB (yoy)
Source: Company data Source: Haver Analytics, Company data
We increase our estimates, and raise target price: We increase our FY25E-FY26E
earnings estimates by upto 3%, to build in 1) higher ARPOB increase of c. 7.6% p.a vs
12 January 2024 28
Goldman Sachs
5.4% earlier, 2) margin expansion on the back of operating leverage. Our 12-m SOTP
based target price increases to Rs6,675 (previous Rs5,830) driven by estimate changes
as well as Q5-Q8 roll forward. We maintain Buy with c. 17% upside potential.
Phoenix Mills: Significant asset additions + exposure to growing ‘Affluent

India’ cohort; Buy
See our separate note on Phoenix Mills
PHOE.BO 12m Price Target: Rs2740 Price: Rs2445 Upside: 12.1%
Buy GS Forecast
3/23 3/24E 3/25E 3/26E
Market cap: Rs436.5bn / $5.3bn Revenue (Rs mn) New 26,383.5 34,623.6 42,274.6 46,438.6
Enterprise value: Rs498.9bn / $6.0bn Revenue (Rs mn) Old 26,383.5 34,969.9 41,394.0 44,942.8
India EPS (Rs) New 74.74 55.54 71.44 81.89

India Materials & Property EPS (Rs) Old 74.74 52.57 59.37 69.58
P/E (X) 17.4 44.0 34.2 29.9
M&A Rank: 3 P/B (X) 2.8 4.7 4.2 3.7
Leases incl. in net debt & EV?: No Dividend yield (%) 0.4 0.2 0.2 0.2
CROCI (%) 14.9 10.7 11.9 12.2
6/23 9/23E 12/23E 3/24E

EPS (Rs) 13.47 14.15 16.53 10.98
We believe Phoenix’s mall portfolio is poised for 25% EBITDA growth CAGR
(FY23-FY27), driven by (1) the rising cohort of ‘Affluent India’, (2) in-mall tenant
premiumization and densification, and (3) new mall additions. Beyond FY27, we expect
its mall portfolio could deliver ~10-12% annual organic consumption growth, in-line with
consumer discretionary growth. In addition, mature malls for Phoenix generate post-tax
ROCE of ~15%, which provides cash flows to reinvest in construction of new malls
(with JV partners), without taking up leverage. Given the higher (and long run-way)
growth and re-investment potential, we believe Phoenix’s mall portfolio should trade at a
premium to REITs (Embassy (offices) trades at 7.5% cap rate, Nexus Select Trust (malls)
at 7%), which distribute most of their cash flows as dividend, and therefore require debt
to acquire/construct new assets. We note other asset-heavy ‘affluent’ consumption
plays similar to malls are premium hotels, which currently trade at 18-24X EV/EBITDA, or
closer to 5% cap rate. We are raising our TP to Rs2,740 (from Rs1,667), valuing the mall
portfolio at 5.0% cap rate (from 7.5% earlier), and commercial assets at 7.5% cap rate
(unchanged), both all rolling-forward valuation to FY26 - as we expect the recently
commissioned malls to ramp up fully by FY26. Remain Buy-rated.
Growth Visibility: Consumer discretionary spends are increasing, driven by the rise of
12 January 2024 29
Goldman Sachs
the ‘affluent’ class (growing at ~12.5% CAGR over 2019-2023) and the wealth effect,
which should drive healthy organic consumption growth in malls. Also, the company has
commenced operations in two new malls recently (in Pune and Bangalore), which will
contribute meaningfully in FY25/FY26, in our view, and we expect consumption CAGR of
~24% between FY23-FY26 (~11% organic (ex-new malls)). Additionally, new malls in
Surat, Kolkata, and Thane will add to inorganic growth beyond FY26, providing
double-digit consumption growth visibility, at least for the next 4-5 years, in our view.
Historically, rentals as a % of consumption, have remained largely consistent (barring
COVID), as Phoenix has managed to re-base the fixed rentals, as they come up for
renewals. Additionally, we believe the risk around new mall constructions is low, given
(1) Phoenix has a large tenant base of premium retailers in existing malls, which act as
anchor tenants for new malls. Given the premium positioning of Phoenix, retailers
generally prefer to enter new markets with them. As a result, pre-leasing activity in new
malls appears strong, and (2) Phoenix’s new mall constructions are part of its JVs with
GIC and CPPIB, and therefore we see minimal risk to financing, supporting leverage and
significantly reducing the risk on these assets.
Exhibit 63: ~90% of consumption in Phoenix malls is in discretionary

categories, which cater to the ‘Affluent India’ cohort

Consumption and trade area mix, as of 1HFY24
Category Consumption mix Trade Area mix
Fashion & Accessories 50% 53%
Electronics 12% 4%
Jewellery 12% 1%
F&B 11% 10%
Multiplex 5% 15%
Affluent' India total 90% 83%
Hypermarket 3% 7%
Others 7% 10%
Source: company data
Reinvestment Potential: India ranks amongst major economies ,the lowest in modern
retail penetration and mix of organized retail. Mall additions have seen strong growth
over the last decade, and the trend is continuing with 38 msf of new malls coming up in
next 3-4 years (source: JLL). We believe, as cities outside of the major metros also
develop driven by urbanization, there will be room for multiple premium malls in these
cities. Phoenix is currently present in only 8 cities, and we believe it could continue to
add malls in newer cities and existing geographies for the foreseeable future. The
company estimates that there are about 35-40 cities in India that have space for at
least one such premium mall over the next decade. While we acknowledge that a
new mall addition would typically take at least 3 years (given the construction cycle etc)
and another 1-2 years to fully ramp-up (based on historical trends), and therefore cash
flow compounding would likely be relatively slower, we believe the run-way for growth
still remains large. With financing commitments from 2 large global financial institutions,
we see minimal risk to project financing and believe Phoenix is well positioned for
growth.
12 January 2024 30
Goldman Sachs
Superior/premium malls leading to lower earnings risk: Phoenix has the

best-in-class premium malls in India, and premium malls in India tend to perform far
better than other malls, as both customers and brands generally gravitate to premium
malls, leading to lower vacancy and higher trade density. We believe the stability and
sustainability of growth is higher in Phoenix’s mall portfolio, compared to other malls,
given the potential of premiumization, and footfall share gains overtime, which warrants
a premium valuation. Also, with Phoenix having established a track record amongst
retailers, we see lower earnings risk for Phoenix, compared to other malls, as
typically any new mall announcement in a new city would lead to at least 70% of
the space being pre-leased with those retailers (based on historical trends)
Exhibit 64: Significant mall additions are expected over the next few years, in metro cities
Industry mall area in metro cities: 89msf (2023) to 127msf (in 2027)
10%
7%
8% 8% 32%
32%
8%
7%
89msf 127msf
10%
11%
16% 19% 17%

15%
Delhi Mumbai Bengaluru Hyderabad Pune Kolkota Chennai

Delhi Mumbai Bengaluru Hyderabad Pune Kolkota Chennai
Source: JLL, Data compiled by Goldman Sachs Global Investment Research
Exhibit 65: Superior/Premium malls have subtantially lower vacancy

levels, compared to other malls
40%
35%
35%
30%
25%
21%
20%
13% 14%
15% 12% 11%
10% 7% 8% 7%
6% 5%
5% 2%
0%
Bengaluru Mumbai Pune Chennai
Superior Good Average
Superior, good, average our classifications by JLL, based on construction quality, tenants, services
etc
Source: JLL
Changes to estimates and TP: We increase our average FY25/FY26

revenue/EBITDA/PAT estimates by 3%/6%/10% to reflect higher consumption growth.
For the premium malls in the portfolio (i.e. Palladium Mumbai, Pune and Bangalore), we
increase the consumption growth from 7% to 9% driven by the affluent cohort which
drives the changes in our estimates. Our NAV-based 12-month TP increases to Rs2,740
(from Rs1,667) (see our note on Phoenix).
12 January 2024 31
Goldman Sachs
Exhibit 66: SOTP valuation

FY26
Adjusted
GAV Debt NAV Rs/share
NAV
Retail 531,841 49,873 481,968 351,759 1,969
Hotel 50,801 3,910 46,891 35,154 197
Commercial 71,725 980 70,745 67,801 278
Residential 7,206 300 6,906 15,115 85
Others/Cash (7,088) 7,088 7,088 40
Rise 173
Grand Total 661,572 47,975 613,597 476,916 2,740
Implied Value 2,740
Zomato: Large TAMs with improving market structure; Buy
See our separate note on Zomato

ZOMT.BO 12m Price Target: Rs160 Price: Rs134.65 Upside: 18.8%
Buy GS Forecast
3/23 3/24E 3/25E 3/26E
Market cap: Rs1.2tr / $14.2bn Revenue (Rs mn) 70,794 120,880 172,958 219,419
Enterprise value: Rs1.1tr / $12.7bn EBITDA (Rs mn) (12,103) 1,004 14,524 27,858
3m ADTV: NA EPS (Rs) (1.20) 0.38 1.82 2.57
India P/E (X) NM NM 73.9 52.4
India TMT P/B (X) 2.7 5.8 5.3 4.8
Dividend yield (%) 0.0 0.0 0.0 0.0
M&A Rank: 3 CROCI (%) NM 5.0 14.6 18.3
6/23 9/23 12/23E 3/24E
EPS (Rs) 0.00 0.04 0.13 0.23
‘Affluent India’ cohort a core target segment for online food/grocery delivery: We
estimate the number of transacting users in India’s online grocery and food delivery
industry (of 25-30 mn MTUs each) are a subset of the ‘Affluent India’ cohort, and expect
growth in these segments to be indexed to the 13% population growth of this cohort;
we see this being further aided by AOV (average order value) and frequency growth, and
shift to online, resulting in c.20%/35% GOV (gross order value) CAGR across food
delivery/online grocery industries over FY24E-27E. We forecast 22%/45% FY24E-27E
GOV CAGR for Zomato’s food delivery/online grocery, with MTUs (monthly transacting
users; 14%/36% FY24E-27E CAGR) the biggest growth driver.
Zomato the fastest growing company within our global food delivery and India
internet coverage: We forecast 30% FY24E-27E adjusted revenue CAGR for Zomato,
the highest within our India Internet/global food coverage, with strong growth across all
12 January 2024 32
Goldman Sachs
segments. The food delivery market has consolidated between two players, with
Zomato having about 55% market share (as of 1HCY23). Additionally, Blinkit is among
the top three online grocery platforms in India (by GOV; GSe) and this has been achieved
within two years of its launch (with a c.14% market share currently) and we forecast
Blinkit’s GOV to grow at a 45% FY24E-27E CAGR, higher than the industry (34% CAGR)
on the back of our expectation of market share gains and consolidation in the segment.
Given the potential TAM for online grocery is 8-10x larger than that for food delivery per
our estimates, Zomato achieving positive unit economics in this segment recently could
result in revenue growth remaining elevated for a multi-year period.
Improving economics in quick commerce to aid overall profitability: Blinkit’s rising

scale has resulted in overall adjusted EBITDA margin for Zomato improving from -14% in
Dec ‘22 to +1% in Sep ‘23; we expect further improvement (to 13% in FY26E) and
forecast Blinkit to reach adjusted EBITDA breakeven by mid-CY24 (Sep ‘23 was the first
full quarter of contribution breakeven), which would place it amongst the few food
delivery companies globally to reach this milestone. We also note that trading losses for
Swiggy (Zomato’s key competitor, Not Covered) was 4x that of Zomato in 1HCY23, and
with Swiggy aiming to achieve group level profitability by CY24, we expect competitive
intensity across both food delivery and quick commerce to remain benign for Zomato.
Reiterate Buy with c.19% potential upside: Our 12m SOTP based target price for
Zomato is Rs160, implying c.19% upside. Zomato is trading at 70x/50x FY25/FY26 P/E,
or 1x PEG in FY26; the stock is trading in line with our India consumer coverage FY26E
median P/E of 55x, despite a 2-3x faster growth profile.
Catalysts for Zomato include (1) continued strong growth in food delivery, (2) further
reduction in Blinkit losses and subsequent adjusted EBITDA profit breakeven; and (3)
potential consolidation in the quick commerce industry.
Exhibit 67: We expect India’s food delivery and online grocery MTU Exhibit 68: We forecast Zomato’s revenue to grow at a 30%
base to track growth in income levels FY24E-27E CAGR, the highest within our India Internet coverage...
MTU (in mn) for India’s online food delivery and grocery industries, vs FY24E-27E sales CAGR for our India Internet coverage
working age population with annual income levels of more than US$10k
80 80
Food delivery industry MTUs 30%

70 70
27%
Online grocery industry MTUs
60 60
Population with annual income >US$10k

50 50
20%
40 40
16% 15%
30 30
20 20
10 10
0 0
Zomato Nykaa MMYT Paytm Info Edge
Source: Euromonitor, Goldman Sachs Global Investment Research Zomato adjusted sales includes delivery fee.
12 January 2024 33
Goldman Sachs
Exhibit 69: ... .with the company also generating the most profits Exhibit 70: Zomato trades in line with India consumer coverage (for
from FY26E 3x growth), and at a meaningful discount to Nykaa
Adjusted EBITDA (in US$ mn) for our India Internet coverage FY26E P/E for our India internet coverage
400
Info Edge $346 mn 107x
Zomato
300
Paytm
Nykaa $197 mn
200
MMYT
60x
55x
100 50x
$45 mn 39x 37x 34x
0
-100
-$94 mn
Nykaa Zomato (GS India Zomato Paytm Info Edge MMYT
-200 TP) Consumer
FY23 FY24E FY25E FY26E (median)
Info Edge EBITDA is non-adjusted. Source: Goldman Sachs Global Investment Research
MakeMyTrip: Key beneficiary of growth in travel, aided by benign

competition; reiterate Buy
See our separate note on MakeMyTrip
MMYT 12m Price Target: $59 Price: $45.41 Upside: 29.9%
Buy GS Forecast
3/23 3/24E 3/25E 3/26E
Market cap: $5.0bn Revenue ($ mn) 651 809 987 1,175
Enterprise value: $4.7bn EBITDA ($ mn) 48 105 162 224
3m ADTV :$20.7mn EPS ($) (0.10) 0.56 1.17 1.33
India P/E (X) NM 80.9 38.8 34.2
India TMT P/B (X) 3.4 5.1 4.3 3.7
Dividend yield (%) 0.0 0.0 0.0 0.0
M&A Rank: 2 CROCI (%) 10.1 14.5 19.5 20.5
Leases incl. in net debt & EV?: No
6/23 9/23 12/23E 3/24E
EPS ($) 0.17 0.02 0.19 0.18
Travel sector to benefit from double-digit growth in the ‘Affluent India’ cohort: We
refresh our travel TAM to reflect the ‘higher-for-longer’ growth of this cohort, and expect
the India travel industry to grow at 13% FY24E-27E CAGR (inline with growth in the
cohort), with online growing faster at 15% CAGR over the same period. Within travel,
we expect relatively premium categories such as international travel and mid/high-end
hotels to be the fastest growing segments (>20% growth), driven by both a shift to
online and rising income levels; our analysis suggests that there is a large overlap
12 January 2024 34
Goldman Sachs
between Indian nationals traveling abroad and the ‘Affluent India’ cohort (working
population cohort with annual income >US$10k).
MMYT well-positioned to capture share of rising travel spend: MMYT is India’s

largest online travel platform, with c.50% market share; we forecast 20%/34%
FY24E-27E revenue/EBITDA CAGR (fastest within our global travel coverage), and view
MMYT as a key beneficiary of double-digit growth in India’s ‘affluent’ income cohort, the
core user base of the company. In addition, we expect a continued online shift to aid
MMYT’s revenue growth, with MMYT growing faster than the underlying market due to
its favourable exposure to under-penetrated segments of hotels and international travel.
Lastly, the competitive environment in India’s online travel has been one of the most
benign in recent years, and we foresee limited change to these dynamics, which should
help the market leader MMYT improve profitability. We note that MMYT’s scale is at
least 5x that of its closest competitor, and MMYT has a strong balance sheet (US$500
mn+ of gross cash as of Sep ‘23); we thus see limited risks to the company’s market
share (and thus growth and margin profile). Our cash EBITDA forecast of US$140
mn/US$200 mn in FY24E/25E for MMYT is at the higher end of our India internet
coverage.
Attractive valuations with favourable risk-reward; reiterate Buy with 30% potential
upside: MMYT stock is up 65% over the last 6 months (vs Nasdaq Comp +9%), but its
valuations (on FY26 P/E) is still at the lower end of our India internet coverage group,
and on a growth-adjusted basis, the stock screens attractively on EV/EBITDA vs India
internet and global travel peers. With our expectation of a steady c.20% revenue growth
coupled with a fairly benign competitive environment in the medium term, we expect to
see profitability improve, and we believe MMYT should trade at a higher multiple. Our
TP implies 30x FY25 EV/EBITDA (or 44x FY26 P/E), in line with global travel/India
internet peers on a growth-adjusted basis. Our refreshed scenario analysis suggests a
favourable risk reward for MMYT, with the bull case implying 54% potential upside vs
34% downside in the bear case. We reiterate Buy with 12m TP of US$59, implying 30%
upside potential.
Exhibit 71: We forecast outbound travel and domestic hotels to be Exhibit 72: ...with MMYT’s segment growth largely tracking online
the fastest growing travel segments in India... sector growth
Industry: FY24E-27E CAGR across different travel segments in India MMYT: FY24E-27E CAGR by segments
25%
24% 24%
22%
20% 19% 19%

18% Outbound H&P
18%
Hotels 15%
15%
15% 14% 14% Air (Int'l) 13%
13%
13%
Bus
10%
Air (domestic)
Total travel
Hotels & Int'l air flight Bus (GBV) Air (GBV) Domestic air Total GBV
Packages bookings flight bookings
Industry Online (GBV) (volume) (volume)
H&P = hotels & packages. GBV = Gross Booking Value.
Source: Goldman Sachs Global Investment Research Source: Goldman Sachs Global Investment Research
12 January 2024 35
Goldman Sachs
Exhibit 73: On the back of strength in spend by the ‘Affluent India’ Exhibit 74: We forecast revenue growth for MMYT to be the highest
cohort, we raise our topline estimates for MMYT by up to 12% within global peers; historical growth was impacted due to
MMYT net revenues (in US$ bn) - New vs previous estimates (grey weakness in budget hotels
boxes represent percentage change) Topline growth of MMYT vs global travel peers
-1% 0% 2% 4% 7% 10% 12% 25%

22%
2.1
New MMYT
1.9 1.9 20% 19%
1.7
Old 1.6 Airbnb
1.5
1.4 1.3 15%
Booking
1.2 1.2
1.0 1.0 Trip.com
10%
0.8 0.8
7%
Expedia
5%
Webjet
(OTA only)
0%
FY24E FY25E FY26E FY27E FY28E FY29E FY30E FY20-24E FY25E FY26E
Source: Goldman Sachs Global Investment Research For global peers except Webjet, FY20=CY19, and so on. FY represents year ending March. MMYT
topline growth adjusted for FX.

Exhibit 75: MMYT’s EBITDA margin profile has sharply improved Exhibit 76: MMYT trades at the lower end vs India Internet peers on
over the years and we expect this trend to continue P/E
MMYT adjusted (cash) EBITDA and reported EBITDA margin FY26E P/E for our India internet coverage
25% 107x
23%
20%
17%
21%
13% 19%
10% 16%
13%
7%
-1%
51x
-7% 0% 44x
MMYT adjusted EBITDA margin 39x 37x
34x
-13%
Reported EBITDA margin
-13%
-19%
-21%
FY19 FY20 FY21 FY22 FY23 FY24E FY25E FY26E FY27E
Nykaa Zomato MMYT (GS TP) Paytm Info Edge MMYT
Source: Company data, Goldman Sachs Global Investment Research MMYT P/E at GS TP is calculated on our 12m forward target price of US$59.
Source: Goldman Sachs Global Investment Research
Appendix
Titan is a consumer lifestyle company, which operates across consumer discretionary

categories like jewellery, watches, eyewear and Indian ethnicwear. Titan is the leader in
the jewellery industry with its brand Tanishq. Titan is also the market leader in watches
and is now expanding into wearables. The company is also a leading player in branded
eyewear with its retail brand Titan Eye Plus. Titan has also made a foray into new
segments like ethnic Indian apparel with its retail brand Taneira. The main driver for the
growth is market share gains, as we expect Titan’s jewellery market share to grow from
~7% in FY22 to ~9-10% in FY25E. The two key initiatives we are most positive on are 1)
retail network expansion into smaller cities and 2) increasing share in wedding jewellery.
We expect Titan to grow faster than organized competitors due to the more rapid pace
12 January 2024 36
Goldman Sachs
of network expansion and the trust associated with the Tata brand which is very
important in precious metals’ jewellery. The company is also likely to see growth from
online jewellery brand CaratLane which is scaling up rapidly, and the foray into
international markets with the large Indian diaspora. Titan’s watch business is likely to
see improved margins as revenues improve after COVID related disruptions. Buy.
Price Target Risks and Methodology - Titan Co.

Valuation methodology: We have a 12-month target price of Rs4,125. We value Titan
based on 65x EPS for Q5 to Q8, in line with its 5-year average P/E. We expect the
earnings CAGR over FY22-25E to be better than the earnings CAGR in FY16-19.
Key risks include 1) regulatory changes which restrict gold imports into India if there is
severe pressure on the currency, 2) pricing pressure from regional / local jewellery
chains, 3) a slowdown in urban discretionary consumption due to high inflation or weak
income growth, and 4) failure to ramp up the wearables business.
Eicher Motors is an Indian automobile company, engaged in the manufacturing and

marketing of premium motorcycles, spare parts and related services under its flagship
brand Royal Enfield. Its portfolio also includes apparel and motorcycle accessories. It
holds more than 90% market share in the domestic 350cc+ motorcycles market. Eicher
is also engaged in the manufacture of Commercial Vehicles through its joint venture with
Volvo AB, VE Commercial Vehicles Limited (VECV), which is the 3rd largest CV player in
India. We are Buy-rated on the stock, given (1) Eicher faces the least risk vs. peers from
EV disruption over the next 5 years due to a longer R&D cycle and a higher bar on
specifications in premium electric motorcycles; (2) Favorable margin dynamics from
improving 650cc mix with expansion in international markets; and (3) Low sensitivity of
premium motorcycle demand to prevailing high interest rates. Catalysts: Customer
response to recent Super Meteor 650 launch, ~13 product launches in the pipeline, and
response to Hunter 350cc in rural and international markets. We see current valuation as
attractive with the stock trading significantly below its historical median.
Our 12-month TP, based on an SOTP methodology applying historical median P/E
multiples to Q5 to Q8 estimates on Eicher’s standalone Royal Enfield business and its
profit share from the VECV Joint Venture, is Rs4,700. Downside risks:
Over-cannibalization by Hunter 350 into flagship Classic / Meteor 350 models,
competition in premium motorcycle market, and slower-than-expected ramp up in export
and rural Indian markets.
Investment Thesis - Devyani International Ltd.

Devyani is the larger of the two Yum! Brands franchisees in India by revenue (FY22).
KFC and Pizza Hut in India (Yum! Brands), and Costa Coffee form Devyani’s core
business. Devyani also runs some of its own brands like Vaango. We see Devyani
significantly ramping up the addition of new stores and doubling the store count of its
KFC and PH stores in India over the next 3-4 years, hence growing stores and revenues
faster than the India QSR market over the medium term. We expect this rapid expansion
to be driven by the improved unit economics as Devyani has made significant changes
to the store operating model - new store sizes are ~50% smaller yet sales per store is
12 January 2024 37
Goldman Sachs
the same as or better than old stores because of increased focus on delivery sales.
Store payback periods for KFC/PH have improved from ~5-6 years before FY20 to ~3
years for new stores currently. We also expect operating leverage led margin expansion
in the medium term driven by maturing store mix, and corporate overheads as % of
sales coming down as revenue scales. We have a Buy rating on Devyani International.
Devyani trades at a discount to our consumer discretionary average EV/EBITDA, and we
see the risk/reward as favorable. Key downside risks to our Buy rating are increased
competitive intensity from new entrants and unorganized players, and pressure of
increasing take rates from online food aggregators, longer-than-expected cyclical
slowdown, unexpected Food Safety concerns and change in consumer preferences.
Price Target Risks and Methodology - Devyani International Ltd.

Our 12m target price is Rs210. We value DEVY at a target EV/EBITDA multiple of 34x on
Q5 to Q8 pre-Ind AS 116 EBITDA. This EV/EBITDA is a 20% discount over the average
EV/EBITDA of our Indian consumer discretionary coverage (Titan, Asian Paints, Avenue
Supermarts, Pidilite, Jubilant). Key downside risks to our Buy rating are increased
competitive intensity from new entrants and unorganized players, pressure of increasing
take rates from online food aggregators, longer-than-expected cyclical slowdown,

unexpected food safety concerns and change in consumer preferences.
Investment Thesis - Sapphire Foods India Ltd.

Sapphire is the smaller of the two Yum! Brands franchisees in India by revenue (FY22).
Sapphire’s key businesses include KFC and Pizza Hut in India, and Pizza Hut and Taco
Bell stores in Sri Lanka. Sapphire is the market leader in Sri Lanka with ~35% share of
the QSR market (FY21). We see Sapphire significantly ramping up store addition and
doubling the store count of its KFC and PH stores in India over the next 3-4 years,
growing stores and revenues faster than the India QSR market over the medium term.
We expect this rapid expansion on the back of improved unit economics as Sapphire has
made significant changes to the store operating model - new store sizes are ~50%
smaller yet sales per store is same as or better than old stores because of increased
focus on delivery sales. Store payback periods for KFC/PH have improved from ~5-6
years before FY20 to ~3 years for new stores currently. We also expect operating
leverage led margin expansion in the medium term driven by maturing store mix, and
corporate overheads as % of sales coming down as revenue scales. We have a Buy
rating on Sapphire Foods. Sapphire trades at a discount to our consumer discretionary
average EV/EBITDA, and we see the risk/reward as favorable. Key downside risks to our
Buy rating are increased competitive intensity from new entrants and unorganized
players, pressure of increasing take rates from online food aggregators,
longer-than-expected cyclical slowdown, inorganic growth, unexpected Food Safety
concerns, change in consumer preferences, and ownership.
12 January 2024 38
Goldman Sachs
Price Target Risks and Methodology - Sapphire Foods India Ltd.

Our 12m blended target price is Rs1,850. Our valuation for SAPI is a blend of our
fundamental (85%) and M&A (15%) based methodologies. 1) Fundamental: We value
SAPI at a target EV/EBITDA multiple of 22x on Q5 to Q8 pre-Ind AS 116 EBITDA. This
EV/EBITDA multiple is at a ~40% discount to our India consumer discretionary coverage
average to account for 1) the higher depreciation in SAPI vs. other consumer
discretionary companies in India, and 2) SAPI’s lower operational ROIC at 17% for
FY25E. Our fundamentals based value (85% weight) is Rs1,790. 2) M&A: Our 30x
target EV/EBITDA multiple (on Q5 to Q8 pre-Ind AS 116 EBITDA) is derived from the
peak multiple seen by sector leader Jubilant, which has a longer trading history. Our
M&A based theoretical valuation (15% weight) is Rs2,200. Key downside risks include
increased competitive intensity from new entrants and unorganized players, pressure of
increasing take rates from online food aggregators, longer-than-expected cyclical
slowdown, inorganic growth, unexpected Food Safety concerns, change in consumer
preferences, and ownership.
Apollo is the largest hospital chain (in terms of hospitals as well as bed capacity) in
India, along with being the largest pharma chain network in the country. Our Buy rating
is predicated on: (1) ramp-up of occupancies in the coming quarters leading to higher
margins on the back of better operating leverage, (2) scale-up of the pharmacy business
(we expect the company to add >600 stores per year), and (3) Margin expansion at
AHLL. The stock currently trades above its 5-yr hist. avg.
We are Buy rated on Apollo with a SOTP-based 12-m TP of Rs6,675, implying a company
level EV/EBITDA of ~22x on Q5-Q8 EBITDA estimates. Key risks include price control of
more medical devices; further losses at non-core segments in subsidiaries.
Investment Thesis - Phoenix Mills

Phoenix Mills Limited (PML), a diversified real estate player focused on retail malls, will
likely see a period of accelerated growth ahead, driven by 1) being India’s largest owner
and landlord of superior grade retail assets with no comparable listed peers, 2) Stable
cash flow from existing assets that can comfortably support leverage, even in a
low-occupancy environment for the newer assets, 3) Overall consumption growth in
India leading to increased demand for high-quality real estate. In our view, the
pre-leasing activity for upcoming malls and office space is encouraging, and with
execution de-risked by equity infusion from CPPIB and GIC, we see minimal risk to
project completions and financing, and believe Phoenix Mills is well positioned to gain
share in a consolidating industry. We are Buy rated, based on attractive NAV valuation of
the retail, residential and commercial assets.
Price Target Risks and Methodology - Phoenix Mills

We are Buy rated on Phoenix Mills, with a FY26 NAV based TP of Rs2,740. We value the
mall portfolio at 5.0% cap rate, and commercial assets at 7.5% cap rate. Downside risks
to our thesis include: delays in construction, higher attrition, and cost overruns.
12 January 2024 39
Goldman Sachs
Investment thesis - Zomato Ltd

Zomato is one of India’s two largest food delivery platforms and is well positioned
across both online grocery and food delivery, which are both amongst the largest TAMs
within India Internet. We see this to be a function of the continued shift to online and
Zomato’s dominant positioning in food-delivery, which helps the company in its quick
commerce business through better insights into potential high-demand locations, lower
cost of customer acquisition, and access to a ready supply chain; we forecast
GOV/adjusted revenues for Zomato to grow at 32%/33% FY24E-26E CAGR to reach
US$9.5 bn/US$3 bn by FY26E. Zomato trades at 1.7x FY25 EV/GMV, higher than its
global peer group at 0.3x; however, Zomato’s GMV growth is also materially faster (32%
FY24E-26E GOV CAGR). Key catalysts for Zomato include i) continued strong growth in
food delivery and quick commerce; ii) reduction in Blinkit losses and subsequent
adjusted EBITDA profit breakeven (GSe mid-CY24E); and iii) potential consolidation in
the quick commerce industry.
Price Target Risks and Methodology - Zomato Ltd.

We are Buy rated on Zomato with a 12-month DCF-based SOTP price target of Rs160
(WACC of 13% and terminal growth rate of 5%). Key risks to our thesis include
continued demand headwinds from macro weakness, increased competitive intensity,
regulatory changes, slower-than-expected adoption of online grocery, and a sub-optimal
capital allocation.
Investment Thesis - MakeMyTrip Ltd.

We view MMYT, India’s largest online travel platform, as one of the most compelling
opportunities within our India TMT coverage as we see a strong growth outlook for the
company (c.20% annual revenue growth over the next 3 years), sector-leading
profitability (c.US$200 mn in cash EBITDA in FY25E, one of the highest within our India
Internet coverage), and valuations that are at the mid/lower end of the India Internet and
global peer group. With our expectations of continued growth in travel demand and a
fairly benign competitive intensity, we expect MMYT’s profits to continue to expand, and
forecast FY24E to be the first full year of net income profitability for MMYT since FY12.
We believe the market is under-appreciating a higher-for-longer revenue growth
trajectory for MMYT, in addition to the company’s ability to be sustainably profitable. We
are Buy rated.
Price Target Risks and Methodology - MakeMyTrip Ltd.

We are Buy-rated on MMYT with a 12-month price target of US$59. Our price target is
based 42.5% on DCF (WACC of 13% and 4% terminal growth), 42.5% on 48x P/E and
15% on M&A value based on 48x P/E — all based on Dec 2025E. Key risks to our
investment view include weaker-than-expected travel demand, higher competition,
pressure on take rates and sub-optimal capital allocation.
12 January 2024 40
Goldman Sachs
Disclosure Appendix
Reg AC
We, Arnab Mitra, Saurabh Kundan, Manish Adukia, CFA, Chandramouli Muthiah, Shyam Srinivasan, CFA, Pulkit Patni, Harshita Wadher, Karan Vora, CFA,
Mrinal Maheshwari and Rishabh Gupta, hereby certify that all of the views expressed in this report accurately reflect our personal views about the
subject company or companies and its or their securities. We also certify that no part of our compensation was, is or will be, directly or indirectly,
related to the specific recommendations or views expressed in this report.
Unless otherwise stated, the individuals listed on the cover page of this report are analysts in Goldman Sachs’ Global Investment Research division.
GS Factor Profile
The Goldman Sachs Factor Profile provides investment context for a stock by comparing key attributes to the market (i.e. our coverage universe) and its
sector peers. The four key attributes depicted are: Growth, Financial Returns, Multiple (e.g. valuation) and Integrated (a composite of Growth, Financial
Returns and Multiple). Growth, Financial Returns and Multiple are calculated by using normalized ranks for specific metrics for each stock. The
normalized ranks for the metrics are then averaged and converted into percentiles for the relevant attribute. The precise calculation of each metric may
vary depending on the fiscal year, industry and region, but the standard approach is as follows:
Growth is based on a stock’s forward-looking sales growth, EBITDA growth and EPS growth (for financial stocks, only EPS and sales growth), with a
higher percentile indicating a higher growth company. Financial Returns is based on a stock’s forward-looking ROE, ROCE and CROCI (for financial
stocks, only ROE), with a higher percentile indicating a company with higher financial returns. Multiple is based on a stock’s forward-looking P/E, P/B,
price/dividend (P/D), EV/EBITDA, EV/FCF and EV/Debt Adjusted Cash Flow (DACF) (for financial stocks, only P/E, P/B and P/D), with a higher percentile
indicating a stock trading at a higher multiple. The Integrated percentile is calculated as the average of the Growth percentile, Financial Returns
percentile and (100% - Multiple percentile).
Financial Returns and Multiple use the Goldman Sachs analyst forecasts at the fiscal year-end at least three quarters in the future. Growth uses inputs
for the fiscal year at least seven quarters in the future compared with the year at least three quarters in the future (on a per-share basis for all metrics).
For a more detailed description of how we calculate the GS Factor Profile, please contact your GS representative.
M&A Rank
Across our global coverage, we examine stocks using an M&A framework, considering both qualitative factors and quantitative factors (which may vary
across sectors and regions) to incorporate the potential that certain companies could be acquired. We then assign a M&A rank as a means of scoring
companies under our rated coverage from 1 to 3, with 1 representing high (30%-50%) probability of the company becoming an acquisition target, 2
representing medium (15%-30%) probability and 3 representing low (0%-15%) probability. For companies ranked 1 or 2, in line with our standard
departmental guidelines we incorporate an M&A component into our target price. M&A rank of 3 is considered immaterial and therefore does not
factor into our price target, and may or may not be discussed in research.
Quantum
Quantum is Goldman Sachs’ proprietary database providing access to detailed financial statement histories, forecasts and ratios. It can be used for
in-depth analysis of a single company, or to make comparisons between companies in different sectors and markets.
Disclosures
The rating(s) for Devyani International Ltd., Sapphire Foods India Ltd. and Titan Co. is/are relative to the other companies in its/their
coverage universe: Asian Paints (India), Avenue Supermarts Ltd., Britannia Industries Ltd., Colgate Palmolive (India), Dabur India, Devyani International
Ltd., Emami Ltd., Godrej Consumer Products Ltd., Hindustan Unilever, ITC, Jubilant Foodworks, Marico, Nestle India, Pidilite Industries, Sapphire
Foods India Ltd., Tata Consumer Products Ltd., Titan Co., Westlife Foodworld Ltd.
The rating(s) for Apollo Hospitals Enterprise Ltd. is/are relative to the other companies in its/their coverage universe: Apollo Hospitals
Enterprise Ltd., Aurobindo Pharma, Biocon Ltd., Cipla, Divi’s Labs, Dr Lal PathLabs Ltd., Dr. Reddy’s Laboratories, Fortis Healthcare Ltd., Gland Pharma
Ltd., Healthcare Global Enterprises Ltd., Lupin, Metropolis Healthcare, Sun Pharmaceutical Industries, Torrent Pharma
The rating(s) for Phoenix Mills is/are relative to the other companies in its/their coverage universe: ACC Ltd., Ambuja Cements, Coal India Ltd.,
Dalmia Bharat Ltd., Embassy Office Parks REIT, Kajaria Ceramics Ltd., Oberoi Realty, Phoenix Mills, Shree Cement Ltd., Ultratech Cement
The rating(s) for Eicher Motors is/are relative to the other companies in its/their coverage universe: Ashok Leyland, Bajaj Auto, Eicher Motors,
Hero MotoCorp, KPIT Technologies, Mahindra & Mahindra, Maruti Suzuki India, TVS Motor, Tata Motors
The rating(s) for MakeMyTrip Ltd. and Zomato Ltd. is/are relative to the other companies in its/their coverage universe: Bharti Airtel, FSN
E-Commerce Ventures, HCL Technologies Ltd., Indus Towers Ltd., Info Edge India Ltd., Infosys Ltd., Infosys Ltd. (ADR), LTIMindtree Ltd., MakeMyTrip
Ltd., One 97 Communications, PVR INOX Ltd., Tata Consultancy Services Ltd., Tech Mahindra Ltd., Vodafone Idea Ltd., Wipro Ltd., Wipro Ltd. (ADR),
Zee Entertainment Enterprises, Zomato Ltd.
Company-specific regulatory disclosures

Compendium report: please see disclosures at https://www.gs.com/research/hedge.html. Disclosures applicable to the companies included in this
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Distribution of ratings/investment banking relationships

Goldman Sachs Investment Research global Equity coverage universe
Rating Distribution Investment Banking Relationships

Buy Hold Sell Buy Hold Sell
Global 48% 35% 17% 62% 55% 43%
As of January 1, 2024, Goldman Sachs Global Investment Research had investment ratings on 2,961 equity securities. Goldman Sachs assigns stocks
as Buys and Sells on various regional Investment Lists; stocks not so assigned are deemed Neutral. Such assignments equate to Buy, Hold and Sell for
12 January 2024 41
Goldman Sachs
the purposes of the above disclosure required by the FINRA Rules. See ‘Ratings, Coverage universe and related definitions’ below. The Investment
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investment banking services within the previous twelve months.
Price target and rating history chart(s)

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compendium can be found in the latest relevant published research
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12 January 2024 43
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EQUITY RESEARCH | January 12, 2024 | 12:18AM IST

The rise of ‘Affluent India’

Chandramouli Muthiah Shyam Srinivasan, CFA Pulkit Patni

Harshita Wadher Karan Vora, CFA Mrinal Maheshwari

High growth of Affluent consumers in India

Affluent India list of stocks Broad-based consumption stocks

Source: Goldman Sachs Global Investment Research

‘Afﬂuent India’ comprises ~60mn consumers, and is growing by double

Afﬂuent India’s population is growing by double digits

grown at a CAGR of 8% in the same period.

*Demat account is a stock trading account in India Source: Euromonitor

Source: RBI Source: RBI

Source: Company data, RBI Source: Company data

Asset value of Indian holdings of equities/Gold India property price (Rs/sqft)

Equities - rising value of holdings and increasing participation in the market

*Demat account is a stock trading account in India Source: RBI

Source: RBI Source: Bloomberg

Domestic MF ownership (as % Total Cap): BSE 200

Retail ownership of Indian equities (%)

India Equity Ownership by Insurance Companies

an average of Rs39,900/10gm in January 2020 to an average of Rs62,200/10gm in

Source: Bloomberg Source: Bloomberg, Goldman Sachs Global Investment Research

Property prices have seen a change in trajectory

years past 4 years

FY19-23 growth FY19-23 growth

TTM vs FY19 TTM vs FY19

16% 50% SP70%

Leisure, Jewellery, Out-of-home food, Healthcare likely to be the key

The rapid growth of ‘Afﬂuent India’ is likely to have a disproportionate impact on

n Comparison of consumption in India with other countries at ~USD10,000 per

Source: Euromonitor Source: Euromonitor

India's urban top 10% vs India's average per capita expenditure

Source: NSSO, Goldman Sachs Global Investment Research

*Headroom is the per capita consumption vs India’s average consumption

*Headroom is the per capita consumption vs India’s average consumption

Source: Company data, Goldman Sachs Global Investment Research

Titan Company: Industry tailwinds coupled with execution, maintain Buy

TITN.BO 12m Price Target: Rs4125 Price: Rs3714.35 Upside: 11.1%

3/23 6/23E 9/23E 12/23E

EPS (Rs) 8.22 8.48 10.31 11.96

Tanishq in number of cities Share of wedding jewellery

150 20% 30%

Eicher Motors: Moat in premium 2W segment + unique position in EV

EICH.BO 12m Price Target: Rs4700 Price: Rs3887.45 Upside: 20.9%

EPS (Rs) 37.06 36.14 41.22 42.77

Usually the 2nd or 3rd motorcycle in a customers’ ownership journey,

conceptualization and launch.

Resilience to competitive challenges built on merit of product design and portfolio

# of Electric 2W models launched in India 2W mkt

# of Premium Electric Motorcycle Models 1

# of Electric Motorcycle models 22

# of Electric Scooter models 274

Source: Bikedekho, Zigwheels, Goldman Sachs Global Investment Research

We expect premium 250cc+ motorcycles to form ~41% of India 2W

Motorcycles (below 250cc),

60% Scooters, 32%

Source: SIAM, Company data, Goldman Sachs Global Investment Research

Export ASP Premium vs Domestic ASP

Source: Company data, Goldman Sachs Global Investment Research