- 9/28/2023
Editors' Roundtable: BQ Prime's team discusses the synopsis of #JPMorganIndiaInvestorSummit. #BQLive
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00:00 so much for tuning into this Editor's State,
00:01 wherein me, Neeraj, Vishwanath Nair, and Agam Vakil
00:04 will give you a snapshot of what stood out for us
00:07 as we've covered two days of the India Investor Summit
00:10 at J.P. Morgan.
00:11 And guys, for me, frankly,
00:13 the overarching theme was that India stands out
00:18 from investors and the J.P. Morgan team alike,
00:21 and corporates, by the way.
00:22 We met a couple of corporates off the meetings as well,
00:26 but that India is not decoupled,
00:28 and if the world sees stress, which may happen
00:30 over the course of the next 12 months,
00:32 then India will likely follow the world's suit
00:36 in terms of getting impacted in a meaningful way
00:38 over the course of the next 12 months.
00:40 For you guys?
00:41 - Well, as far as I'm concerned,
00:42 I think the point about India's bond inclusion
00:45 was something that a couple of speakers did tell us,
00:49 and that was something that we keenly watch out for
00:52 in terms of the inflows that will follow.
00:54 Also, the point that the current macro scenario,
00:58 as well as the monetary policy part of the economy,
01:01 both of those are looking fairly strong
01:04 in terms of their ability to achieve the results
01:07 that they were intended to.
01:08 So those pointers, I thought, were big takeaways,
01:11 because if large investors are looking at it
01:12 from that point of view,
01:13 then India becomes a better investment scenario for sure.
01:16 Agam.
01:17 - Right, so I spoke to two heads of research
01:20 from two very different sectors,
01:23 information technology on one end
01:25 and consumption on the other end.
01:26 We know that both the sectors have been under
01:28 a little bit of stress.
01:30 They've had a tough year going in,
01:32 but we're starting to see a little bit of positive
01:36 factors coming in through both the sectors.
01:40 But really, it's gonna be a little bit more
01:42 about consolidation over the next few quarters
01:44 before we actually start seeing a meaningful improvement
01:47 in both the sectors, in fact.
01:49 Let's not forget that at least when it comes to consumption,
01:51 it's also an election year.
01:52 So that could also be one of the other factors
01:55 that could play in favor of consumption
01:57 improving going forward.
01:58 - So actually, let's make our viewers hear
02:00 some of the key takeaways, right?
02:01 And let's start off with where Agam left off,
02:03 and which is maybe stress over the next few days,
02:07 weeks, months.
02:08 And Sanjay Mukhim, who's the India Equity Strategist,
02:11 spoke at length about how equity markets
02:15 could be under a cloud.
02:18 He effectively said that he doesn't see
02:20 any meaningful upsides for the Indian equities
02:22 as well as the world equities.
02:24 And that is something that investors
02:25 should certainly take note of.
02:27 Hear out a slice of that conversation.
02:29 - So we were tactically bullish in March,
02:32 and we turned cautious in July.
02:35 And the reason for that, Neeraj, was not valuations,
02:38 it was actually liquidity.
02:40 And we've seen for the last 15 years
02:42 that global equity markets react to injections
02:45 and withdrawals of liquidity by the major central banks.
02:48 In March, the Fed injected liquidity
02:50 for the bailout of the small banks.
02:52 We saw the market start to rally,
02:53 growth started to rally, mid-caps in India
02:55 started to do well.
02:57 Starting July, June, we started to see
02:59 the liquidity withdrawal happen as well.
03:02 And this is for a shorter-term trade,
03:03 our research has been very clear.
03:05 Valuations are your second filter.
03:07 The first filter is earnings momentum,
03:09 which is then amplified in multiples
03:11 by the liquidity phenomenon.
03:14 So will I be positive now?
03:15 The answer is no, because we continue
03:18 to see liquidity withdrawal by central banks
03:20 happening for the next several months,
03:22 which should put a lid on equity upside here on.
03:24 - Your assessment of what market returns
03:28 are likely to be because of the overarching factor
03:30 of liquidity, where is it that you still find comfort
03:35 to be able to tell your investors at the conference
03:37 that these are the pockets that you,
03:39 as a team, strongly believe,
03:41 still have a chance of outperformance
03:42 in an otherwise sideways to a faltering market?
03:45 - Okay, so there are two or three answers
03:47 to that question, Neeraj.
03:48 If you have a longer horizon.
03:50 So let's say you're invested in India
03:52 and you have the patience to be in here
03:54 for the next three to five years,
03:55 then you still may find enough companies
03:58 which are executing well, which have growth,
04:01 visibility remaining very strong,
04:03 and therefore you may then be willing to say that,
04:05 okay, maybe the multiple's a bit too high,
04:07 but I'm here for compounding and this is good for me.
04:10 But the problem is, Neeraj, that most of my investors
04:12 think of the structural story and the demographics,
04:15 but expect returns in 12 months, right?
04:17 And that's the challenge.
04:19 So if you're looking for shorter term return,
04:22 then you have to necessarily worry
04:24 about the market direction, which we think is negative
04:26 and we think markets will be flat to down
04:28 for the next several months,
04:30 in which case the only, very few will go up,
04:33 within the large caps, the only space
04:35 that continues to make sense,
04:36 and this has confounded all strategists
04:37 everywhere in India, is the banks.
04:40 Okay, because the banks have delivered earnings,
04:42 they've delivered earnings upgrades,
04:43 and are properly valued, right?
04:47 It's like all strategists in the world
04:49 saying equities will go down.
04:50 Every major strategist in the world
04:53 thinks equities has a downside,
04:55 but the market holds up.
04:56 Same in India, every strategist,
04:58 every buy side investor will tell you
04:59 the banks looks great, the banks have struggled to perform.
05:02 But if you were to screen the stocks credibly,
05:05 that's the one space that will make sense
05:07 on a valuation versus growth trade-off.
05:10 So that's our core portfolio,
05:11 it's been for two and a half years now,
05:12 and we continue to recommend that.
05:14 Yeah, so that was Sanjay Mukhim.
05:18 What we also did is have a conversation
05:20 with Jahangir Aziz, the head of emerging market economies
05:23 at JPMorgan, and the point that he was trying to make
05:26 during this conversation is that this inclusion
05:28 of the Indian bonds within the emerging market index
05:30 at JPMorgan itself, that is obviously
05:32 going to bring in flows, but what it also does,
05:34 essentially, is bring in this foreign capital
05:37 into the domestic market, increases the depth of the market,
05:40 and thereby ensures that there is more reflection
05:43 of the macroeconomic realities in the market.
05:45 His point was that currently the bond market
05:47 is reflecting what is happening on the regulatory front,
05:50 which doesn't give through enough feedback for the investor.
05:54 So this will definitely help,
05:56 and obviously it's not gonna happen immediately,
05:58 it's gonna happen over a two to four year period of time,
06:00 but that was definitely a point that I thought
06:03 was a big highlight from that conversation.
06:05 Let our viewers watch that.
06:08 This is probably one of the big critical moves
06:11 that India was supposed to make.
06:13 We had been talking about it for many, many years,
06:16 and finally India's made that move.
06:19 And I think that we need to look at the move
06:23 from what it does to the efficiency of the market.
06:27 So most of Indian bonds used to be held very captive
06:31 by domestic holders, whether they are LIC
06:36 or other pension funds or banks.
06:39 So, and their, you know, things that,
06:43 shocks that hit them were basically the same all the time.
06:46 By allowing foreigners to hold,
06:50 and particularly passive investors to hold it,
06:54 you are now creating another group of people
06:57 with different kinds of liquidity shocks
07:00 that will hit them.
07:01 As a result, you're diversifying your source of funding,
07:04 and that diversification of the source of funding
07:07 is in a very important step in terms of price discovery
07:12 of what is the true value, let's say of the 10-year rate,
07:15 and not what is being driven by regulatory restrictions
07:19 that are imposed on LIC and on banks, right?
07:22 As we know, there are significant amount
07:23 of those things over there.
07:25 So it will finally, hopefully, over a period of time,
07:28 by a period of time, I mean two, three, four years time,
07:31 Indian bonds will start reflecting
07:33 the macroeconomic realities rather than the regulations
07:37 under which they are operating.
07:38 So that's the big step.
07:40 And the other step that it does is that
07:42 because it was always held so captive, right?
07:45 And the ones who are holding those bonds
07:48 did not have, were under serious capital controls.
07:53 So they could not, you know, go somewhere else.
07:56 Finally, you will have a set of investors
07:58 who can actually move out of Indian bonds
08:01 if, for example, fiscal discipline isn't maintained.
08:04 So the first time, I think,
08:06 you're not only going to get price discovery,
08:08 but you're also going to get market discipline
08:11 on the government, which we never had.
08:13 - So we also spoke to Sajid Jinnah,
08:16 and he had some very interesting points
08:18 with respect to the fiscal deficit
08:20 and consolidation going in and how it could be critical,
08:24 especially when we talk about FY24.
08:26 Neeraj, anything that stands out here?
08:28 - Yeah, and you know, just that point
08:30 that he mentions that while we are grappling
08:32 with a lot of other crises of sorts
08:34 until the next elections, post that, to his mind,
08:38 sticking to the path and maybe even beating that path
08:41 of fiscal consolidation that government has laid out
08:44 would be very, very critical
08:45 from the macroeconomic stability.
08:47 In fact, the best to do justice to this answer
08:49 is actually hear him out on what he has to say
08:52 when it comes to this particular thing.
08:54 - I think there's no doubt
08:56 that there's been a massive transformation
08:58 on the macro stability front over the last 10 years.
09:01 And to policy makers credit,
09:03 it started right after the last NEPA tantrum.
09:06 I think there were two immediate realizations.
09:08 One is that you can't have a situation
09:10 where inflation is in double digits
09:11 like it was in 2011, 2012.
09:14 And so we've had an institutionalized
09:15 flexible inflation target.
09:17 I think people don't appreciate how well it's performed.
09:20 Between 2016 and 2020, January,
09:24 headline CPI averaged 4%.
09:27 We actually met our target.
09:28 Now between 20 and 23, it's averaged 6%
09:31 for reasons we all know,
09:32 but at least we're in that band.
09:34 And the MPC through its action seems determined
09:36 to bring inflation back in the band.
09:38 So you're seeing a massive downshift in inflation.
09:42 Along with that has come higher real rates.
09:44 Real rates were deeply negative 2010, 11, 12.
09:47 Real rates have been consistently positive since then.
09:50 They were negative in the pandemic,
09:51 but back again in positive territory.
09:54 I think the second lesson was buffers matter.
09:56 That foreign exchange currency buffers matter hugely
09:59 and perceptions of buffers matter.
10:02 India had sufficient buffers in 2013
10:05 by conventional standards.
10:06 We had reserves with $280 billion
10:10 and it was worth almost six months of imports
10:13 and that's more than sufficient.
10:14 But the perception was that India didn't have enough.
10:17 And then that creates a catch-22
10:19 because if the central bank intervenes and uses buffers
10:22 and you run it down,
10:23 then you're accentuating the perception
10:25 that there is inadequate buffers.
10:27 If you don't use buffers on the exchange, it overshoots,
10:29 then that begets more weakness.
10:31 So I think what the central bank has correctly done
10:33 in my view in the last 10 years
10:35 is that every opportunity by dollars.
10:38 At the start of '22, we had almost 700 billion.
10:41 There was no shadow of a doubt
10:42 that the central bank had more than enough ammunition.
10:45 It could intervene expansively.
10:47 It did almost $90 billion in the middle of last year
10:50 and still had enough.
10:51 So I think the second lesson was buffers matter.
10:53 The third is that external metrics matter.
10:56 We've always been a country with low external debt,
10:58 but there was a perception somehow in 2009, '10, '11, '12
11:01 that the exchange rate was strengthening,
11:03 was misaligned, was overvalued.
11:05 The last four or five years,
11:07 if you look at the broad trade weighted
11:09 real effective exchange rate, it's basically flat.
11:12 Now, I personally as an economist
11:14 would like a slightly weaker exchange rate
11:16 to boost competitiveness
11:17 in a world in which exports will be challenged,
11:19 but at least there is no market perception
11:21 that this exchange rate is misaligned.
11:23 So I think there's been a very conscious effort
11:25 to ensure that the fundamentals, exchange rates,
11:28 foreign exchange reserves, real interest rates, inflation,
11:33 has gapped down and is within sustainable levels.
11:36 And therefore, there's been such a strong evolution.
11:38 I'll end by saying, you said,
11:39 is there unfinished business?
11:40 There always is.
11:42 In our case, it'll have to be on the fiscal
11:45 that we have to policy makers credit.
11:49 There is a fiscal consolidation roadmap,
11:51 but it's important, I think, to be on that roadmap.
11:54 And if possible, from next year, beat that roadmap.
11:58 Because when you think of the current account,
12:00 the current account is nothing
12:01 but the investment saving gap of the economy,
12:03 which is the consolidated fiscal deficit
12:06 and the private sector's investment saving gap.
12:08 Now, if you do get a private CAPEX cycle,
12:10 as we are all hoping in the coming years,
12:13 then by definition,
12:14 the private sector's investment saving balance
12:16 will worsen to finance that CAPEX cycle.
12:19 And that's precisely you want the government deficits
12:22 to come down so that this does not spill over
12:25 into a current account deficit.
12:27 - Well, you heard Sajid Chinoy,
12:29 and we'll hear a bit more of him later on.
12:31 But I think it's important to bring in a bit of perspective
12:33 of India versus the rest of the world.
12:35 And Filippo Gori, CEO of Asia Pacific,
12:38 spoke about this beautifully when asked about
12:40 what's happening in the Southeast Asian
12:43 and the South Asian economies,
12:44 and is India really standing out?
12:46 So like we said at the start,
12:48 that India is a bit of a standout feature,
12:50 but India is not alone.
12:51 There is traction in Japan,
12:52 there is traction in South Korea,
12:53 there is traction in India on the MNA front.
12:55 And for JP Morgan as well,
12:57 from amongst a lot of other economies,
12:58 India is standing out, yes,
13:00 but it's not the only game in town.
13:02 However, there's a lot of stuff happening in India,
13:04 which excites JP Morgan to have a strong 55,000 workforce
13:09 in India, especially on the service export side.
13:12 55,000, that's large, yes.
13:14 So he spoke about the growing importance of India
13:16 within the JP Morgan sphere,
13:18 as well as for the world at large.
13:21 Hear out Filippo Gori.
13:22 There is excitement around the opportunity set
13:27 that the region is providing us,
13:29 because if you think about it,
13:31 by the end of this decade,
13:32 Asia will probably represent 50% of the GDP of the world,
13:36 will be housed in this part of the world.
13:38 Therefore, there is an element of excitement in our minds
13:41 to think about if we want to remain
13:45 the largest financial institution in the world,
13:47 or one of the largest financial institutions in the world,
13:49 we have to have a large presence in Asia-Pacific.
13:52 And we have a large presence in Asia-Pacific.
13:55 If you think about India, for instance,
13:57 it's the country in the world after the US
14:01 where we have the largest physical presence.
14:04 We have over 50,000 employees.
14:06 We have just, we just inaugurated in April with Jamie Dimon,
14:10 the new Mumbai campus.
14:12 There's another one just opened in Bangalore,
14:14 state-of-the-art campuses for our employees.
14:17 The talent pool that we have found in India
14:20 and more broadly in the region has been amazing.
14:23 Now, the growth, there are growth differentials,
14:26 there are different opportunities
14:27 depending on how you look at the region,
14:29 but our ambition spans the whole Asia-Pacific,
14:33 starting from Japan at the north, Australia to the south,
14:37 Southeast Asia is providing us with interesting opportunities
14:40 and of course, India, which there is an excitement
14:44 and a buzz in the room here at the conference,
14:48 if you think about it, because India this year
14:50 will probably be the fastest growing economy
14:53 among the largest economies in the world.
14:55 So there is this excitement, over 80 corporates
14:59 represent over 600 investors.
15:01 It's interesting to be part of this moment.
15:06 - That was Felipe Gori.
15:09 Neeraj, the one other point that Sajid made
15:12 during the conversation was regarding
15:14 the current account deficit as far as India is concerned.
15:17 The point that he made was that neutrality on the CAD front,
15:21 which seems that India is hurdling towards,
15:23 that may not be such a great thing, right?
15:26 - Yeah, so Nielken spoke about it a few days back,
15:28 and I would love to understand your perspective
15:30 if Agam has one, then that too,
15:31 but it's interesting that everybody's talking about
15:33 how CAD neutrality is great from a bond market perspective,
15:37 from a currency perspective,
15:37 but both of them and Sajid in particular
15:40 mentioned that he hopes that we don't become CAD positive
15:43 or CAD neutral, but remain CAD deficit
15:45 because we are an emerging growth country
15:47 and we need to finance the growth with borrowings.
15:50 And if we actually become CAD neutral,
15:53 then we may not be doing justice to our growth potential.
15:57 It's something that I think we've heard in the past
15:59 from Nielken as well.
16:00 - Yeah, so the point that the most
16:02 emerging market economics experts
16:06 or people who focus on India a lot say is that
16:09 for a country like India, which is capital stock,
16:11 there is a need for that inflow of capital
16:14 and you can't have a CAD neutral economy
16:16 and then ensure that money keeps coming back in.
16:19 Let Sajid explain that better, why don't you watch that.
16:22 - JP Morgan has 55,000 people in India, right?
16:27 Most of our global research, technology, cybersecurity,
16:31 legal accounting is done from India
16:33 and many multinational companies are following suit.
16:35 Now, I'm gonna take the opposite stand
16:37 that it is not desirable for India to have
16:40 a zero current account deficit or a current account surplus
16:43 because given our level of per capita income,
16:46 as I mentioned, the current account
16:47 is simply the investment savings gap.
16:49 We want more investment.
16:50 We want more investment
16:52 than our domestic savings can finance
16:54 and therefore it's desirable to run
16:56 a sustainable current account deficit, 2% of GDP.
17:00 Operationally, what you will see hopefully
17:02 is that even as service exports have picked up,
17:05 when we do get that private capex cycle
17:07 we've all been waiting for, right?
17:10 And domestic demand strengthens and broadens,
17:12 that will show up in higher imports.
17:15 Right now, most of our imports are consumer goods imports.
17:17 What we want are capital goods imports
17:19 to reflect the fact that a capex cycle has started.
17:22 So it's not a good thing to run a current account surplus
17:25 because that may be an indication of depressed demand.
17:29 You want to run a current account deficit
17:30 at our level of income
17:32 to attract stable capital from the world,
17:34 FDI, for example, right?
17:36 So think of the current account deficit
17:37 as being foreign savings that are augmenting
17:41 domestic savings to finance investment,
17:43 which is what we want.
17:44 Right.
17:45 But it could well happen that the nature
17:48 of this whole equation may change
17:50 in that there are higher exports,
17:51 services plus maybe goods, hopefully,
17:53 and there are reduced imports,
17:55 even though it's just a trickle right now,
17:57 but we're seeing electronic imports
17:59 getting attacked meaningfully.
18:00 So could it happen that what will be the nature
18:03 of the current account deficit two years out
18:05 or three years out?
18:06 It could be different.
18:06 Yeah, I'd be a little bit more careful
18:08 about extrapolating on exports
18:10 because unlike the 2003 to 2008 cycle,
18:13 we're seeing a world that's becoming
18:14 more and more protectionist,
18:16 more and more deglobalized,
18:18 more and more economically balkanized.
18:20 So at least on the goods front,
18:21 we'll have to work really hard to boost our goods exports.
18:24 This is not like a rising tide lifts all boats.
18:27 We'll have to work hard to increase our share.
18:29 Service exports have done very well,
18:31 but for the last few months, if you'll notice,
18:33 they've kind of tapered off in level terms.
18:35 So it's a high level,
18:37 but we're at that kind of 27, $28 billion gross service
18:41 exports a month for the last five or six months.
18:43 So this is really good,
18:44 but we shouldn't presume that exports are going to be strong
18:47 till the eye can see.
18:48 We have to work to make that happen.
18:50 Right, so that was Sajid Chinoy.
18:54 Now let's shift focus to equities
18:56 and particularly the IT sector,
18:58 which we know that has been under a lot of stress.
19:01 In fact, we saw a lot of downgrades and guidance
19:03 is coming in earlier in the year.
19:04 And yet we've seen a lot of these share prices come back
19:08 to where they were at the beginning of this financial year.
19:11 So Ankur Rudra is of the view that
19:14 while there has been a lot of pressure,
19:18 what he's going to keep an eye on is discretionary spending.
19:21 Remember that J.P. Morgan is underweight
19:24 on all the IT companies at the moment.
19:26 So I asked him, what are the factors
19:28 that will lead him to perhaps re-rate
19:31 and it'll be essentially discretionary spending,
19:33 which we have not seen in the year so far.
19:36 Moving on, perhaps a little more interesting conversation
19:39 that I had with him was around telecommunications.
19:42 Because once again, he's underweight,
19:44 both Vodafone Idea as well as Bharti Airtel.
19:47 And this is where he mentions that,
19:51 we have seen a lot of investments in 5G
19:54 and we are also seeing tariff hikes not coming through.
19:57 So this is where he mentions that capital expenditure,
20:01 when that starts to go down is when he expects
20:05 re-rating to happen as far as telecommunications stocks are concerned.
20:08 This is what he's saying, listen.
20:10 Interesting thing in India has been,
20:13 we've seen one of the most aggressive 5G rollouts in the world.
20:16 Probably faster than the US.
20:18 We just spoke to Akhil from Bharti just a few hours ago.
20:24 And I think Akhil Gupta was highlighting from Bharti that,
20:28 we've probably had the fastest except China, right?
20:31 So we added about 330,000 5G base stations
20:33 over the course of this year.
20:35 And that's more rapid than what's happening in the US.
20:38 The problem is that monetization is not happening, right?
20:42 Nowhere in the world have telcos been able to really monetize
20:45 the 5G CapEx investments.
20:47 And any kind of delay in tariff recovery or price repair,
20:51 basically has a negative impact on ROICs for the industry.
20:55 So that's what makes us a bit more worried about the industry,
20:59 which is what keeps us on the underweight side of things.
21:02 So we are waiting for the CapEx intensity to recede.
21:06 Once we see CapEx going away,
21:07 and our analysis for Asia-Pacific telcos also have suggested
21:10 that markets which have gone beyond the 5G peak,
21:14 that's where we start seeing CapEx undershooting,
21:16 which is a great time to own telcos.
21:17 So I think that's maybe one thing.
21:19 Second is if there's any kind of improvement
21:21 on the ARPU side, that'll make us potentially more positive.
21:24 If there's any kind of new sources of revenue monetization,
21:27 fixed wireless, maybe we've seen a huge amount of fixed wireless
21:30 launches in the last one month,
21:32 both from the main operators.
21:34 And if that is successful,
21:35 if it genuinely creates a new opportunity,
21:38 those things are the work we really watch for.
21:40 So I mean, eventually it's ROICs.
21:42 If you see any kind of improvement,
21:44 chances of improvement on ROIC,
21:46 that probably will make us more constructive.
21:48 Right, so that's Ankur Rudra and his view on telecommunications.
21:54 We also spoke to Latika Chopra on the consumption theme.
21:57 And what's really come through is that
22:00 it seems that from her point of view,
22:02 the decline in overall consumption volume
22:05 seems to have arrested for now.
22:07 Staples.
22:08 Staples specifically.
22:10 We're likely to see a little bit of an improvement,
22:13 not a massive one,
22:14 but a little bit of improvement with the help
22:16 of a low base as well over the next few quarters.
22:19 And she also makes a mention of the fact
22:23 that we are going to festive season
22:24 and there could also potentially be some amount
22:27 of government spending when it comes to elections,
22:29 which could likely lead to slightly better numbers.
22:33 But she explains this here to us
22:36 in terms of what we can expect going forward
22:39 as far as the Staple sector is concerned.
22:41 Listen.
22:41 You know, clearly uneven monsoon this time,
22:45 you know, has emerged as a risk.
22:48 You know, after a rainy July and a dry August,
22:51 you know, September rains have revived
22:53 and the monsoon deficit, as we speak,
22:55 stands at about 6% versus, you know,
22:56 where we started at about 11%
22:59 at the beginning of the month.
23:00 I would say, you know,
23:04 if you look at the company narratives,
23:06 if you look at, you know, the Nielsen data,
23:08 you know, where you started to see rural uptick happening,
23:11 you know, moderating inflation
23:12 is definitely helping the cause.
23:14 What is the impact of this kind of monsoon?
23:17 And we are still to end the month,
23:18 but, you know, we can only know for certain with a lag.
23:21 But if you look at the historical data, you know,
23:24 it's interesting that there is no material correlation
23:28 between FMCG volume growth rates
23:29 and the monsoon data also.
23:31 So, you know, there are other factors at play as well.
23:34 But when you look at the urban discretionary demand,
23:36 you know, that's got a mixed, you know, behavior.
23:40 And much of the segments like, you know,
23:42 QSR, Turables, Fashion,
23:45 all these categories have seen an impact,
23:48 you know, on urban demand
23:50 due to the inflationary pressures.
23:52 We are kind of lapping one full year of that
23:54 now and starting December quarter,
23:56 we have to watch out if there are any green shoots there.
23:59 We also have a festive season, you know,
24:01 which is later this year, mid-October to mid-November.
24:04 And, you know, we are hopeful, you know,
24:05 it really is good so that it supports
24:08 the urban discretionary demand to come up.
24:10 Okay, so that's Latika on stables.
24:13 Must say the view around consumption at the higher end
24:16 is materially different.
24:18 And a bunch of investors that we spoke to
24:21 are talking about how the K-shaped recovery
24:24 or the K-shaped consumption split is widely visible.
24:27 And at the broader end of the spectrum,
24:28 and there's Indian hotels out here in this conference,
24:31 also apparently talking about the benefits
24:33 from the World Cup as well as G20, so on and so forth.
24:38 So that split apparently there,
24:40 but needless to say, lots of opportunities and challenges
24:44 as we wrap up this Editor's Take
24:46 around what has come up from such an informative conference.
24:49 So lots of challenges.
24:51 No one spoke about elections, by the way, thus far.
24:53 They're about eight months away,
24:55 but that didn't appear in the realms of conversation.
24:57 But fiscal or slowing global economy,
25:01 all of those are clear and present challenges.
25:04 In addition to that, the unseen troika leading to inflation,
25:09 which is higher oil prices,
25:11 higher other commodity prices as well,
25:14 and slowing growth, but US exceptionalism,
25:18 where in US is actually seeing quite of that uptick
25:21 because of the rollouts that have happened.
25:22 So I think that seems to be the crux of the matter
25:25 when it comes to investors,
25:27 as well as the sell side advising them.
25:28 So to our mind, viewers, this is the key takeaway
25:31 of the J.P. Morgan India Investor Summit,
25:34 and hope this was informative for you
25:37 from Agam, Vishwanath, and me, Neeraj.
25:39 Thank you so much for tuning in.
25:41 (upbeat music)
25:43 (upbeat music)
25:46 (upbeat music)
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