The Core Report

#911 India’s Stock Market Through A Bottom Up Investing Lens | Govindraj Ethiraj | The Core Report

34 min

Rakesh Vyas, Chief Investment Officer at Quest Investment Managers, provides a bottom-up analysis of India's stock market, identifying long-term investment themes including financialization of savings, premiumization of consumption, and energy security. He discusses opportunities in lending, transmission, and select consumer sectors, while noting that current market valuations are fair and that investors should expect 12-14% returns driven by corporate earnings growth.

Summarized by Podsumo

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✨ Key Takeaways

1

Rakesh sees strong tailwinds in financialization, driven by increased credit propensity and formalization, with banks and asset management companies well-positioned
2

He identifies premiumization as a multi-decade theme, noting that India is less than one-fourth of the way through this journey, with examples like Zudio's potential expansion from 1,000 to 5,000 stores
3

Energy security is a key focus, with opportunities in transmission (T&D) and select equipment suppliers, while avoiding solar module makers due to oversupply concerns
4

IT services are underweight but Rakesh sees a potential rebound in 12-18 months, favoring mid-cap names like Coforge with attractive valuations
5

Lending is the unifying theme across sectors, as it supports energy capex, consumption growth, and financialization of savings

💬 Notable Quotes

"We are just starting that phase [of premiumization]... we even haven't reached one-fourth of the journey yet."

— Rakesh Vyas
"I still think that we are maybe 12, 18 months away from a larger quantum of fur coming in [for IT services]."

— Rakesh Vyas
"One piece that ties all this together is actually lending space."

— Rakesh Vyas