Buying stocks? Pay attention to trends in women’s interests and habits

The rise of women and women empowerment has big ramifications on the economic future of India and developing markets. Marico, SKS Microfinance and TTK Prestige are stocks influenced by women

Did you know that 64% of all purchases are influenced by women, and this is particularly in developing economies such as India? Did you know that a whopping $4.3 trillion is earned by women in the US? This is expected to increase by $5 trillion in the future, and the number is expected to grow bigger. Such is their importance of women in decision-making in households. According to Boston Consulting Group, one billion women now participate in the workforce globally and they now control 50% of the wealth in the US. Globally as many women attend university as men as more females take up education to empower themselves. In a new thematic report, Espirito Santo Securities has highlighted the importance of women and, within the context of women empowerment and importance in society and life, the investment avenues where women are influential.

Some of the key sectors where women play an important role are food, apparel, financial services, healthcare, consumer durables, telecom services and real estate. We will be focusing only on Indian aspects of the report as well as the three companies mentioned where women have a key role—Marico, SKS Microfinance and TTK Prestige.

In India, there have been several rapid strides in women empowerment. While emerging markets are yet to catch up with developed countries, the emergence of women, over here, as a new force to reckon with will have wide-reaching ramifications. The next few decades will be important as more women contribute to the workforce and economy. This will change industries and the economic landscape significantly over the next few decades and catch up with developed countries such as Norway and US.

In fact, some of the top business leaders in the Indian workforce today are women. The CEO of ICICI Bank is Chanda Kochhar.  The CEO of Axis Bank is Shikha Sharma. Naina Lal Kidwai is the group general manager and country head of HSBC India, part of the global banking juggernaut—HSBC. Indra Nooyi is currently the head of PepsiCo, one of the world’s largest soft-drinks conglomerates. Kalpana Morparia is the CEO of JP Morgan India. And these are not small companies by any means—they are big if not huge. And there are more, not just in business but in other spheres of life as well—political, social and even sports—everywhere. Their profile is rapidly increasing and has implications not just from societal point of view but also economic standpoint.

What has been the driver of this remarkable empowerment in India? The key drivers of have been improvement in wealth, lower fertility, higher education, access to information and technology, according to Espirito Santo.  

Economic liberalisation meant more television channels and newspapers. As more women tune to cable TV, they come to know about the world view and cultures in different parts of the country. In fact, in India, “informal education”, among the rural folks, has been a powerful tool for the women’s empowerment. According to Robert Jensen and Emily Oster, cable TV may lead to changes in attitudes towards women, even without targeted interventions.

The other key factors for women empowerment has been health and education. It has been established that women outlive men and better health and lower fertility rates meant more women entering the global workforce. Despite endemic marriages at young age, especially in rural India, women have been able to delay motherhood. The awareness of sexual practices and family planning amongst many families has been instrumental in lowering fertility rates. According to Espirito Santo, “In 2011, Emerging Market Women (EMW) were still getting ‘married’ significantly earlier: 47% of 20-24 year old Indian women were already married/in union before the age of 18. Despite this, women have been able to delay motherhood. This was the key catalyst for women to start joining the workforce.”

One of the most heartening aspects of the report has been increased optimism for women and their daughters’ place in the future. More believed that the future generation holds bright. A 2011 report by Nielsen, according to Espirito Santo, reports that roughly “77% of the women in emerging economies believe that the future will be brighter for their daughters and wanted to share more responsibilities in life decisions”. This is a markedly huge shift in optimism and empowerment in women over the years. Much of it has been helped by education and technologies.

Consider the following graphs. Women are not only key decision makers, but also understand the power of education in empowering daughters for the future. As you can see, more than half of the women in the survey wanted to spend money towards education—far more than developed countries. Secondly, the role of technology has made nearly everything accessible to them for improving their lives—particularly the television. Television has exposed them to newer cultures and way of life, and also exposed them to role models and such.

Within the context of women empowerment, which companies are influenced by women? Espirito Santo has come up with three companies, namely Marico, TTK Prestige and SKS Microfinance as companies where women play a key role in their profitability.

TTK Prestige

We had put a write-up on Espirito Santo’s forecast on TTK Prestige earlier. Check here ( to see what they have to say about the company’s future prospects. According to the company, it is reported that an astounding 90% of its buyers are women! Since our report, it has downgraded the fair value to Rs3,000 and put it as neutral but remains bullish over the long term.


Marico is a fast-moving consumer good company, and owner of the flagship brand—Parachute Oil. According to Espirito Santo, Marico is a good pick because, “more Indian women entering the workforce and increasing their discretionary spending power, they are increasingly buying aspirational beauty products. Married working women are also looking for meals that reduce their workload and offer nutritional alternatives, like oats for breakfast and branded edible oil.” However, the brokerage is neutral on the company, with fair value at Rs214.49.

SKS Microfinance

The company had been in the limelight throughout much of last year, mostly for all the wrong reasons, particularly politicking amongst the brass. However, Espirito Santo feels that it is past all that now. It said, “The last six months the company has not only left the Andhra crisis behind it, but has also raised Rs.263 crore of capital, which should be enough to take care of its capital requirement for the next couple of years.” It lends micro-loans to the poor, mostly through self-help groups (SHGs) who are largely constituted by women. With the Reserve Bank of India (RBI) initiative to step in and regulate the sector, the industry can expect better numbers. Espirito Santo believes it is a BUY and with fair value being Rs143.87.


Election Commission for probe into Vedanta donations to Congress, BJP

An investigation by the EC found that both, Congress and BJP received about Rs5 crore each from Sterlite Industries and Sesa Goa group, which prima facie violates RP Act and FERA

New Delhi: The Election Commission (EC) has come across instances of suspected violations of the Foreign Contribution Regulation Act (FERA) by Congress and the Bharatiya Janata Party (BJP) in their acceptance of donations from subsidiaries of multi-national company Vedanta group, reports PTI.
An investigation by the EC, carried out with the help of the Income Tax (I-T) department, has found that both the parties had received about Rs5 crore each from two subsidiaries of the Vedanta group-- Sterlite Industries and the Sesa Goa group.
The donation, prima facie, violates section 29 B of the Representation of the People Act which states that "no political party shall be eligible to accept any contribution from any foreign source defined under clause (e) of Section 2 of the Foreign Contribution (Regulation) Act, 1976," official sources said.
The entire transaction, the EC has said in its complaint to the Home Ministry, should be investigated and probed under the FCRA as they have been made by the firms, which are part of the UK-based group, that makes them a "foreign source".
Vedanta Resources, according to its annual report of 2011-12, had paid $5.69 million (about Rs28 crore) to political parties in India in last three years.
Without disclosing the identity of the beneficiaries, billionaire Anil Agarwal-promoted Vedanta has stated on the report that it paid $2.01 million to political parties during 2011-12.
While there were no no comments available from BJP, Congress sources denied it had received any "foreign" donation. The sources said Congress had received from Sterlite Industries a donation of Rs5 crore in 2009.
When contacted, a Vedanta spokesperson said "We would like to confirm that all political donations made by Sterlite Industries India Ltd ( SIIL) and Sesa Goa Ltd (Sesa) in specific years, were strictly in accordance with the provisions of Section 293A of the Indian Companies Act, 1956 after taking due approval of the respective Board of Directors and Audit committees and full disclosures have been made as per law."
The EC has found violations in these two instances and hence has asked the ministry of Home Affairs to take action as it is the nodal ministry in-charge of enforcing the FCRA in the country, official sources said.
The FCRA states that it has been formulated "to ensure that the foreign contribution and foreign hospitality is not utilised to affect or influence electoral politics, public servants, judges and other people working in the important areas of national life like journalists, printers and publishers of newspapers among others."
The Association of Democratic Reforms (ADR), an NGO in the field of promoting good electoral practices, had reported publicly that "Sterlite Industries, a subsidiary of the Vedanta Group, has donated Rs6 Crores to Congress during FY05 and FY10 while the Madras Aluminium Co Ltd, also a subsidiary of the Vedanta Group had contributed Rs3.5 Crores to BJP."
Vedanta said that as regards Foreign Contribution (Regulations) Act, 1976 ("FCRA") and 2010 is concerned, the company believed that the provisions of FCRA do not get attracted to these contributions as they are not "foreign contributions" at all.
Therefore, the question of alleged violations of the provisions of FCRA does not arise. The political donations made by SIIL and Sesa as above have been made from P and L accounts of respective entities with full disclosures after complying with law as applicable, the company said.
"We have been legally advised that the FCRA provisions are not attracted in the background of present facts, to Indian companies incorporated as such and duly listed on domestic stock exchanges."


Sensex, Nifty may continue to weaken: Tuesday Closing Report

We mentioned yesterday that a short rally is likely but the trend is down. Today the market opened positive but fell in the afternoon session. A close below 5,630 on the Nifty may lead to a short but sharp decline


The market pared the gains accrued in the morning session and settled in the negative on selling pressure in blue chips. We may see the downtrend on the Nifty continuing in case the index closes below 5,630.The National Stock Exchange (NSE) saw a volume of 65.51 crore shares and the advance decline ratio of 515:935.
The market opened on a positive note tracking supportive global cues and in-line results announced by Reliance Industries and Axis Bank on Monday. The US markets settled higher overnight on better-than-expected earnings report from Citibank. Reflecting the optimism, the Asian markets were higher in morning trade today.
The Nifty opened 5,706, 19 points over its previous close and the Sensex started off trade at 18,785, a gain of 71 points. The market hit its intraday high in initial trade itself with the Nifty rising to 5,714 and the Sensex going up to 18,801.
However, profit booking at the highs saw the indices trimming their gains and remaining range-bound in the morning session. The losses intensified in noon trade even as the European markets opened firm.
Selling pressure in capital goods, oil & gas, banking and fast moving consumer goods stocks pushed the market into the negative around 1.30pm. The market continued its southward journey and touched its lows around 3.00pm. The Nifty fell to 5,636 and the Sensex contracted to 18,549, at their lows.
The market closed near the lows weighed down by selling blue chips. The Nifty settled 39 points (0.69%) down at 5,648 and the Sensex declined 136 points (0.73%) to finish at 18,578.
In the broader index space, the BSE Mid-cap index dropped 0.72% and the BSE Small-cap index declined 0.41%.
BSE Consumer Durables (up 0.21%) and BSE TECk (up 0.05%) were the only sectoral gauges that ended higher. The top losers were BSE Realty (down 3.05%); BSE Metal (down 1.89%); BSE Capital Goods (down 1.51%); BSE Power (down 1.32%) and BSE PSU (down 0.93%).
Seven of the 30 stocks on the Sensex closed in the positive. The key gainers were Maruti Suzuki (up 2.13%); Hero MotoCorp (up 1.70%); Bharti Airtel (up 1.65%); Sun Pharma (up 0.52%) and HDFC (up 0.47%). The major losers were Mahindra & Mahindra (down 3.66%); Tata Motors (down 2.62%); Tata Motors (down 2.62%); Tata Steel (down 2.45%); Hindalco Industries (down 2.38%) and Sterlite Industries (down 2.26%).
The top two A Group gainers on the BSE were—Essar Oil (up 6.82%) and United Spirits (up 4.15%).
The top two A Group losers on the BSE were—HDIL (down 5.76%) and Reliance Communications (down 4.93%).
The top two B Group gainers on the BSE were—Niraj Cement (up 19.99%) and Hexa Tradex (up 19.89%).
The top two B Group losers on the BSE were—GSL Nova Petroproducts (down 13.79%) and Jai Mata Glass (down 13.04%).
Out of the 50 stocks listed on the Nifty, 11 stocks settled in the positive. The top gainers were Axis Bank (up 2.05%); Maruti Suzuki (up 2%); Hero MotoCorp (up 1.84%); Bharti Airtel  and Cairn India (up 1.53% each).DLF (down 4.42%); M&M (down 3.38%); ACC (down 3.17%); Tata Steel (down 2.64%) and Reliance Infrastructure (down 2.48%) settled at the bottom of the index.
The Asian markets closed in the green as better-than-expected US retail sales report rekindled hopes of Asian exporters. Besides, strong earnings from Citigroup boosted financial stocks.
The Shanghai Composite added 0.01%; the Hang Seng rose 0.28%; the Jakarta Composite gained 0.36%; the Nikkei 225 surged 1.44%; the Straits Times advanced 0.12%; the Seoul Composite climbed 0.83% and the Taiwan Weighted settled 0.70% higher. Bucking the trend, the KLSE Composite shed 0.06%.
At the time of writing, the key European markets were trading between 0.58% and 0.70% higher and the US stock futures were in the positive.
Back home, foreign institutional investors were net buyers of shares totalling Rs20.16 crore on Monday whereas domestic institutional investors were net sellers of equities aggregating Rs85.52 crore.
Engineering and materials handling equipment maker, Elecon Engineering has received a letter of intent from mining major NMDC worth Rs17.13 crore for two lump ore stackers for the latter’s Bacheli and Kirandul Complex projects. The stock was down 0.41% and closed at Rs48.50 on the NSE.
IFGL Refractories, which clocked a turnover of Rs600 crore in the last fiscal, has scaled down its growth target for 2012-13 in view of the slowdown in the global as well as domestic steel industry. The stock declined 1.62% to settle at Rs48.50 on the NSE.


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