2009, Nifty at some 4300 levels. Today, we closed at a high above 18,800. Spectacular journey and what a story of Indian markets. But how would you like to decode this journey, this 14 years journey?
India’s journey is reflected in three things. One, last year, six out of the top ten fastest growing cities of the world were in India — Hyderabad, Bangalore, Mumbai, Delhi, Kolkata, Chennai. This trend is likely to continue for many-many years to come. The state where we sit, Maharashtra, its GDP today is equivalent to what was the whole of India’s GDP in 2005.
In 17 years, Maharashtra has reached where yesterday India was. Over the next 17-20 years, will Maharashtra reach where today’s India is? Undoubtedly yes. Our states will become as big as today’s India. Finally, apart from cities and states, it is the corporates which create growth for the stock market. We all know how Indian pharma companies, Indian IT companies are dominating the global system. This trend is likely to get repeated. Put together this combination of state, city and company, put together this with the combination of India’s 3G, earnings growth better than emerging market peers, governance standards superior to emerging market peers and commitment to green, this is the story of India.
You have always bet on India’s growth story. We have heard you mention the importance of change and the ability to adapt with this change as being one of the key ingredients to success. How does India fare on this adaptability of change? How would you analyse it?
As Indians we do not have much room to go down. For us, the only way is up. Second, we are jugaadu people. We have always evolved and adapted. If we see our culture, so many people came from outside, but they all came together to create today’s India. If we look at our technology, we are very frugal and hence, we are in a position to adapt and evolve to the changing needs. Now, clearly, this adoption and evolution is necessary in the world which is rapidly changing with artificial intelligence and machine learning.
So, as Indians, we truly have to keep pace with the change. As they say, only change is constant in this world. In financial savings unfortunately this adoption is not visible. People are investing their savings in gold and real estate. People are investing their savings in collective investment schemes and cryptos. People are spending money on gaming revenues. Clearly, the savings allocation is where Indians have not evolved. There is more money lying in underperforming assets, assets which are underperforming inflation than in equity mutual funds.
Our track record over decades is double-digit returns and people even today have not given us as much money as they have put it into savings account or CASA account or current account. So, clearly, there is a need for adoption in financial investment. Indian savings should be used to support Indian entrepreneurs and Indians should benefit from this tremendous growth story.
So, I want to focus on something called kal, aaj aur kal. Companies and sectors which were success stories of the last 14 years and companies and sectors which will be emerging as success stories in next 14 years.
Sector or company se jaida we have to focus on management and governance. Kal bhi management and governance were driving the value creation, aaj bhi management and governance are driving value creation aur kal bhi management and governance will drive value creation.You have to always focus on good managers who have vision, who will convert that vision through execution and most importantly who will follow the path of governance and not cheat minority shareholders.
Industries will go up and down. The economic cycle will go up and down but if you are with a good promoter who is having a vision, who is executing that vision and who is fair to minority shareholders, you will always make money.