Investing in an UNDERVALUED sector! - YouTube

Hi, everyone. Welcome to today's video.

First and foremost, thank you so much.

We are almost at 300 thousand subscribers.

Zayn and I cannot be more thankful for all

the love and support that you have showed me.

Even my mom and mother-in-law read every single comment that you guys give.

So it means the world to us, to our entire family.

So thanks from the bottom of our hearts.

Do let me know what you would want me to do as a 300K special.

A lot of you have asked me that

hey Akshat, Why don't you play this piano? I don't do it.

My Srimati ji does that. I play guitar, by the way.

So maybe I'll play that. Not right now,

I'll play that at 500K. Right.

So that's a deal. So help me get there fast.

Now on today's video, what is it that we are going to do?

So I'm going to talk about a highly undervalued industry.

I've recently made an investment

of approximately ten lakhs in this undervalued industry.

I have bought a few stocks that I will

share with you and I've created my own smallcase.

You can go and check that out.

A lot of you have been requesting that hey Akshat,

why don't you create your small case?

So I have created this sectoral smallcase.

The link is in the description box.

You can go and check it, but do it only through your mobile app.

Otherwise you would not be able to access it.

I tried accessing it through the web browser.

It was not allowing me to.

So with that Disclaimer out of the way,

let me put another Disclaimer and then we will start the video.

So another Disclaimer is that this is not an investment advice.

Here is a tweet for you that I did a few days back.

It's a very interesting tweet.

The reason why I made that tweet is that I get messages whenever I analyze stock

they hey Akshat,

if you analyze this particular stock, it unfortunately fell.

A lot of people send me good messages

also, that you advised this stock. It went up,

I made money.

See, folks, when I am recommending stocks, I'm doing it from a long term perspective,

in 99% of the times.

If I'm picking some stock for trading, for example, when I picked HUL,

I categorically said that I'm doing it for trading. Rest all the stocks that I've

been recommending, those are long term hold stocks.

That's A. B,

if I'm recommending 50 stocks,

I would have personally put in my own money in it,

and you have seen it right.

So that's two and third and final point

here is that see, out of 50 stocks that we buy together,

please assume that in ten stocks you might suffer a lot of loss

and it's completely okay. If you go and check the news today,

Mr. Vijay Kedia, who is an ace investor,

he's sitting on a loss of 30% on one of his core stocks.

So the point is that in order to make

money from the stock market, you don't need to be 100% right 100% of the times.

You have to be right

only majority of the times.

And it is an approximation game.

I say this openly right.

Even Mr Warren Buffett can be wrong.

He has been wrong multiple, multiple times.

We are just mere mortels from that perspective.

So I'm honestly sharing this perspective with you.

So please take all this analysis and do

your own due diligence and only then make investments.

I genuinely share whatever I am doing with you.

And I'm quite confident even on the stocks

where I'm sitting on a loss, it will recover with time because I have

been doing it for several years and it has worked out in the past.

So I'm hopeful that it will work out again going forward in the future.

And overall, my portfolio is very much in green and doing very well.

So with that said,

let's start today's video, and we are going to do three things. Number 1

one, I'm going to talk about

the undervalued industry that I'm speaking about.

Second, we are going to take a look

at general trends and what the growth prospects in this industry is.

And finally, I'm going to create the smallcase of four

specific stocks within this industry in which I am making investments.

So which undervalued industry am I talking about?

So I am talking about consumer durable, good industry.

So first and foremost, what exactly is consumer durable and how

is it different from fast moving consumer goods?

They both sound very similar.

So what is the exact difference?

So when you look at FMCG, these are companies like HUL, Brittania, Dabur.

They manufacture products like chips, soap, shampoos, hair oil, all this basic,

basic stuff that gets consumed very quickly.

And these are fast moving goods.

We require toothbrush toothpaste very quickly.

We don't go and buy toothpaste only once

a year unless you have really bad brushing habits.

Of course, you'll be buying toothpaste more frequently.

Therefore, these are called as fastmoving consumer goods.

On the flip side, there are certain products, for example, fridge, TV, ACs,

these are something that we don't buy every month or every six months.

Usually whenever we buy an AC or a TV,

they last us for at least five, six, seven years.

So then we replace it and buy a newer version of it.

So these are called as consumer durable goods. Durable why? Because the durability

or the extent of time for which these can be used that is slightly longer.

Now without boring you with further

details about consumer durable goods, let me talk about two very specific points

about how consumer durable companies make money.

First and foremost, they do something called as brand building.

This is applicable across a range

of industries, right, from education to FMCG companies.

And this is also equally or even more

applicable when it comes to consumer durable goods.

This brings me to a very interesting trivia question.

What do you think is the profit margin for Apple products, generally speaking?

So let's pick iphones.

So tell me and type it out in the comment box.

What is the profit margin for iphones?

And why do you think that the profit margins are so high?

I will type out my answer also, but just a very quick explanation.

The point is that Apple has created a brand which is very big.

It is considered analogous to luxury.

Therefore, people are willing to pay higher premium prices for Apple products.

And Apple is a consumer durable,

electronic good company, and therefore it makes a lot of money

because of high margin and its balance sheet is very strong and very positive.

So the first key point that you need to note down about consumer durable good

company is that they thrive on brand building because the stronger the brand

gets, the stronger their profit margins become.

The second key point that you need to keep in mind about consumer durable good

companies, that they deliberately make products to fail.

Right now, I'll tell you a story.

So when I was a child, my parents bought a AC at home.

So it was in early 2000 and the AC was

called as Carrier AC, the brand is still very visible and it does fairly well.

But that AC has been running in our house even till today.

I am sure that your parents or

grandparents or even you might have these kind of experiences that in the olden

time, in slightly older times, if you brought a fridge or a washing

machine, it might be lasting up until now also.

But now, if you go and buy consumer durable good products in the market,

they are so intelligently designed that they will by default, fail.

Do let me know in the comments,

if you agree with this. I am sure that I am going to get some

comments that will completely concur with this story.

So essentially,

the consumer durable product industry has turned in such a shape that every company

is trying to build brands and almost all the companies build a mechanism where

products are designed to fail within a few years.

This will continue to happen because that is one of the major ways you will

replace your fridge, TV, washing machine, laptops and a bunch of different things.

Before I jump into explaining the

specific stocks that I am recommending from this industry, because this industry

is literally a gold mine and you will see that in a minute

why, let me take you through some

of the industry key trends from India's point of view.

So there are a few key points.

The first key point regarding the consumer

durable product industry in India that the growth rate in India is very high.

Now here is a chart or rather a graph that you can see of the entire world.

This was a study that was done by Mordor Intelligence.

And you can check that India has been highlighted in dark blue,

which indicates that the AC market or the air conditioner market growth rate

forecast between 2021 and 2025 is strong and it's growing.

So that's a good sign.

It shows that one of the key consumer

durable good products, which is AC, it is growing.

Now this study can be replicated for fridge washing machine as well.

Don't just simply assume that, hey, this is just AC study

so therefore just AC.

No, because when people buy AC, they update their entire house.

Have you seen a house where people have

AC, but they don't have a fridge or they don't have a washing machine.

Usually people will buy all these products together

so to say.

Now, a related point here is that India's middle class overall is growing massively.

That is one of the key reasons why

the consumer durable industry in India is set to grow.

Now, there was a very interesting article and I'll put the clip here,

it was in Financial Express, and it reads that nearly 55% of the Indian population

is expected to join the ranks of the middle class.

In fact, because India's demographics are

much younger compared to China and the US, India's middle class could be the largest

in the world in terms of number of people by 2025.

Now, this is a very important fact that you need to keep in mind that as our

middle class grows, what is the first thing that they are going to buy?

They are definitely going to buy fridge TV. These are basic things that middle

class Indians would first buy even before buying a car.

Now, if you take a look at the competitive landscape in the consumer durable industry

in India, you will find that the top ten AC brands in India are deeply fragmented.

And here is a look at their market share.

And just take a look at this screen.

I will scroll this through very quickly.

So Daikin has approximately 11% market share.

Hitachi has 11%.

You have Voltas, which is 21%.

You have Blue Star, 12%, you have LG 16%, you have Carrier 6%, you have Haier

Whirlpool, Samsung, these have single digit market share.

And these are all prominent brands. Right.

So the point is that the market is deeply fragmented.

There are so many players available.

Now, slowly and slowly, some of these brands will do really well.

Some of these brands will fall behind.

But the bottom line is that there will be some kind of consolidation that will

happen at some stage in consumer durable good industry in India as well.

And then that particular brand, whichever you are betting on,

it will become really big and it will become a massive profit churning machine.

So therefore it makes sense for us to make certain bets on certain brands.

Again, I'm suggesting it from long term perspective.

Now let's look at some additional

peripheral trends that are happening in India.

So for example, you can take a look at this particular chart.

It shows that the villages in India are getting more and more rural electrified.

So rural electrification is happening.

Government is spending a lot of resources

in terms of developing electrification resources in villages.

Now, as more and more villages get electrified, people there will start

buying all these consumer durable goods as well.

So the demand will go up even in the rural sector.

Another key related trend is that a lot of indigenous manufacturing is

happening. Now because of 2020 Covid, the China supply chain has gotten bumped

and India has directly benefited, especially in manufacturing.

So for example, in consumer durable good

industries, you require a lot of metals in terms of manufacturing these items.

For example,

you would have heard that when you buy an AC, there is a copper lining within it.

So all this stuff is now being shifted to India.

And India is also ramping up its

manufacturing facilities when it comes to producing durable goods.

So all this Indigenous push, what is it going to do?

It is going to improve the profit margins of these existing brands.

Now, because of this Indigenous

manufacturing, the profit margins of existing brands will improve.

That is where the buying opportunity kicks in.

And that is the reason why I'm investing in this industry.

So now let me take you through

the specific smallcase that I've created in this industry.

So these are the four stocks that I will recommend.

Again, you can check the link

in the description box, but please do it through your mobile phone only.

Otherwise you will not be able to access this smallcase.

Now let me take you through the smallcase that I have created for this industry.

And these are my top four picks.

Given the current market scenario, I'll do a complete analysis of these four stocks.

I will show you live investing also on tomorrow's video and explain why I have

picked these four stocks within this industry.

We will do a detailed analysis there,

but for the time being, please check out the smallcase.

And if you want to make an investment,

it would only cost you approximately Rs. 8,000.

So you can do an sip or a lump sum payment.

I have tried to keep this amount as low

as possible for these four specific good companies.

Now, why I have precisely picked these four companies only?

Why not something else?

That discussion,

that stock specific discussion I'm going to do tomorrow because I see great buying

opportunities in these four specific stocks.

In case you want to invest in this

smallcase, just go check the link in the description box

via your mobile phone, that is important.

Otherwise you will not be able to access this smallcase.

So in summary, I wanted to give you

an industry overview today about consumer durable good industry in India.

So I'm betting on the fact that as India's middle class grow,

this industry will grow with it, too.

And if you are an investor in this industry, you will benefit immensely.

So I hope you enjoyed the discussion.

Please do watch tomorrow's video

also, it is going to be super important

because I'm going to explain you step by step rational as to why I have picked

these four stocks from the Consumer durable good industry.

Do let me know if I have missed any facts or if there are any additional points

that you would like to highlight on the Consumer durable good industry.

I will read through it, and then I will shoot my video for tomorrow.

So if you enjoyed the content, please like and subscribe.

And I will see you the next time.