Avengers: Infinity War movie, which became one of India's highest grossers, has a tale to tell about the stock markets. The Hollywood blockbuster crossed the Rs 200 crore mark in less than 15 days since its release in India on April 27. Compare this with January-March 2014 data of a little over Rs 400 crore for all Hindi films, and you will know how urban momentum is picking pace fast. There are other signs and trends that investors need to look at too. Here is how Nilesh Shah, managing director at Kotak Mahindra AMC eloquently explains it all:   

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"One Hollywood blockbuster of today earns just as much as all Bollywood movies put together could do in an entire quarter. Look at auto companies. The waiting period for Maruti Suzuki's Baleno is four months. Not to forget the results that FMCG firms posted. Fast-food chains like Domino's and McDonald's logged 25 per cent sales growth in the quarter gone by. All this tell you urban momentum is positive," he said. 

He further said rural economy is showing signs of improvement too. "Tractor sales are registering strong numbers. Non-listed player Sonalika Tractors last year recorded highest sales ever in its history. The loan recovery rate for micro-finance institutions is also improving," he said.   

With these signals, it is no brainer that consumption theme will rule the roost in the coming months amid uncertain global and domestic macro environment. 

Global brokerage CLSA in a recent report said that March quarter results indicate urban discretionary consumption has been doing well and management commentary indicates rural consumption is growing. “We believe that it’s an opportune time to raise weightings in consumption plays. Consumer staples are the best way to play the rural consumption theme, but valuation multiples of 40x-55x is a major challenge,” said CLSA.

"Consumption will benefit from government increased popularity on spending on welfare programs," it added. 

Here are five consumption stocks that look set to perform well over next 12 months that investors can look at positively:

1) PVR

We expect screen additions to accelerate over the next couple of years led by opening of previously delayed screens and marginal improvement in mall development activity. PVRL’s execution is almost flawless with industry leading operating metrics because of its presence in the best catchment areas across cities. However, good content is the only driver of earnings because of it being a high operating leverage business. Forthcoming movie pipeline appears to be strong and we expect PVRL’s consolidated EBITDA to post a strong CAGR of 21 per cent over FY18-20E (on a depressed base). Given PVRL’s brand and execution capabilities coupled with lack of outdoor entertainment options and India’s love for movies should keep the stock in vogue. Maintain Outperformer with a price target of Rs 1,568 (14x FY20E EV/EBITDA). (IDFC Securities)

2) INOX Leisure

Inox’ strong growth trajectory has been the key driver of the operating leverage led earnings. The ad growth of 30 per cent plus for the last four quarters has been very impressive and has outperformed PVR. On the valuations front, Inox, which is trading at 10.9x FY20E EV/EBITDA, is at ~25 per cent discount to PVR. However, given the strong traction in ad revenues, we expect the discount to narrow eventually. We maintain our BUY recommendation and value the stock at 12.8x FY20E EV/EBITDA (15% discount to target EV/EBITDA multiple of PVR) to arrive at a target price of Rs 360/share from earlier Rs 335. We continue to prefer Inox over PVR. (ICICI Securities)

3) Jubilant FoodWorks

Jubilant Foodworks’ (JFL) 4QFY18 revenues grew 27 per cent yoy to Rs 7.8 bn, 4 per cent above EE, on strong SSSg of 26.5% (EE: 21%). JFL continued to reap operating leverage benefits led by strong SSSg and cost-control initiatives, which pushed up EBITDA margins by 651bps yoy to 16.4 per cent. With the new strategy yielding strong growth over the past one year, the platform is set for the next phase of growth, which would be sustainable in our view. Accordingly, we raise our FY19/FY20 sales estimates by 3 per cent to 7 per cent; we also upgrade our EBITDA estimates by 10 per cent to 18 per cent to factor in the higher-than-expected new store additions. Reiterate ADD with a Jun’19 TP of Rs 2,738 vs Rs 2,330 earlier set at a 60 times TTM EPS of Rs 45.6. (Equirus Securities)

4) Hindustan Unilever

Four key trends are particularly relevant for HUL resulting in an elevation in its earnings growth trajectory compared to the past – (i) its rapidly improving adaptability to market requirements, (ii) its recognition of Naturals as a key sub-segment across categories, (iii) continuing strong trend toward premiumization and (d) extensive plans to employ technology. On a target multiple of 51x Mar’20E EPS (15% premium to three-year average due to
significantly improving business fundamentals), we get a TP of Rs 1,805 from Rs 1,515 earlier. Maintain Buy. (Motilal Oswal Securities)

5) Titan Company

We envisage Titan to extend its growth run led by share gains, entry in new segments and retail expansion. Moreover, rising share of studded jewellery, cost optimisation and operating leverage are likely to aid margin. Hence, we raise our target multiple to 55x (from 52x) FY20E EPS and arrive at revised TP of Rs 1,160 from earlier Rs 978. We maintain ‘BUY/SO’. At CMP, the stock is trading at 46.7x FY20E EPS. (Edelweiss Securities)