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1. Don’t Bet Against India
Raamdeo Agrawal
27 May 2021

2. 1
Prediction is dangerous,
especially of the future!

3. 2
I have but one lamp by which my feet are guided,
and that is the lamp of experience. I know of no
way to judge the future but by the past.
— Patrick Henry, American politician

4. 3
India – Reviewing the last 10 years

5. 4
Market has delivered modest return last 10 years
19,445
49,509
10,000
20,000
30,000
40,000
50,000
Mar-11
Mar-12
Mar-13
Mar-14
Mar-15
Mar-16
Mar-17
Mar-18
Mar-19
Mar-20
Mar-21
BSE Sensex
10% CAGR
Crises like Demonetisation, ILFS fiasco and Covid have been taken in stride

6. 5
India’s growth: Better than world, but not China
0
1,000
2,000
3,000
4,000
5,000
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020E
Nominal US$ GDP - Indexed to 100
China: 10% CAGR
World: 2% CAGR
India: 4% CAGR
6 tn
1.7 tn
66 tn
13.2 tn
2.6 tn
82 tn

7. 6
Long runway ahead for India
 India is today where
China was in 2006
 From 2006 to 2020,
China’s GDP CAGR
is a robust 12%
2.9
14.3
0
2
4
6
8
10
12
14
16
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
India v/s China - GDP in $ trillion
India China
Where India
is today

8. 7
India – The NTD Opportunity

9. 8
India is the ultimate NTD story
22
34
59
155
301
465
475
494
524
618
721
834
948
1,239
1,226
1,366
1,708
1,879
1,827
1,858
2,039
2,091
2,290
2,653
2,713
2,869
2,628
2,868
3,107
3,366
3,646
3,950
4,279
4,636
5,022
FY51
FY60
FY70
FY80
FY90
FY00
FY01
FY02
FY03
FY04
FY05
FY06
FY07
FY08
FY09
FY10
FY11
FY12
FY13
FY14
FY15
FY16
FY17
FY18
FY19
FY20
FY21E
FY22E
FY23E
FY24E
FY25E
FY26E
FY27E
FY28E
FY29E
1st US$ tn
2nd US$ tn
7 years
58 years
3rd US$ tn
4th US$ tn
3 years
8 years
5th US$ tn
3 years
India GDP trend (USD B)  60 years for first
trillion dollar of GDP
 Every NTD (next
trillion dollar) in
successively few
years

10. 9
 Trebling of per capita GDP implies 10x opportunity in discretionary
& 4x opportunity in savings & investment services
Linear growth, exponential opportunity
GDP p.c. $1,000
GDP p.c. $3,000
600
750
100 1,050
300
1200
Basic spend
Discretionary spend
Saving 4x
10x

11. 10
Can India be the next China?
Most indicators are favourable

12. 11
#1 Democracy
 India is the largest democracy in the world
 Rule of law prevails
 Well-established federal structure
 Centre-State relations continuously improving
 Moving towards a one-nation idea
 One unified market
 One income tax
 One GST
 One Aadhaar
 One ration card
 One mobile number
 One bank account

13. 12
#2 Demography
 Second highest population in the world …
 A huge domestic market
 … dominated by youth
 40% below 20, 85% below 50

14. 13
#2 Demography (continued)
 Burgeoning middle class
Long runway of high demand for goods & services
Source: Bain & Co / Consultancy Asia

15. 14
#3 Digitization
 India’s global reputation built on the back of software exports
 India’s domestic digitization – internet and mobile – comparable
with the best in the world
3 4 6 8 10 13 18 24
31
40
47 50
59
69
76
87
98
107
113
122
136
150
FY99
FY00
FY01
FY02
FY03
FY04
FY05
FY06
FY07
FY08
FY09
FY10
FY11
FY12
FY13
FY14
FY15
FY16
FY17
FY18
FY19
FY20E
India Software Exports ($ bn)
21% CAGR
FUN FACTS:
• Over 120 crore telecom
subscribers, equal number of
mobile phones
• Over 45 crore smart phones
• Over 56 crore internet users,
2nd only to China

16. 15
#4 Dollar inflows & Forex reserves
Forex reserves from less than $5 billion in 1991 to $590 billion now
14
5 8 8 7
13 16 15
43
8
50
42 39
47
26
73
32
43
52
28
44
FY00
FY01
FY02
FY03
FY04
FY05
FY06
FY07
FY08
FY09
FY10
FY11
FY12
FY13
FY14
FY15
FY16
FY17
FY18
FY19
FY20
Forex inflows ($ billion)
Net FDI Net FPI
4
590
0
100
200
300
400
500
600
FY85
FY87
FY89
FY91
FY93
FY95
FY97
FY99
FY01
FY03
FY05
FY07
FY09
FY11
FY13
FY15
FY17
FY19
Latest
Forex reserves - $ billion
17% CAGR

17. 16
#5 Declining interest rates & inflation
 10-year GSec rate has halved in the last 10 years
 Inflation is fairly benign
4
5
6
7
8
9
10
11
12
Apr-99
Apr-00
Apr-01
Apr-02
Apr-03
Apr-04
Apr-05
Apr-06
Apr-07
Apr-08
Apr-09
Apr-10
Apr-11
Apr-12
Apr-13
Apr-14
Apr-15
Apr-16
Apr-17
Apr-18
Apr-19
10 year G-Sec, %
0
3
6
9
12
15
18
Apr-99
Apr-00
Apr-01
Apr-02
Apr-03
Apr-04
Apr-05
Apr-06
Apr-07
Apr-08
Apr-09
Apr-10
Apr-11
Apr-12
Apr-13
Apr-14
Apr-15
Apr-16
Apr-17
Apr-18
Apr-19
CPI Inflation, % YoY

18. 17
#6 Declining crude easing CAD
 Crude is down 50% from its peak levels …
 … significantly easing current account deficit
-6
-5
-4
-3
-2
-1
0
1
2
3
-100
-80
-60
-40
-20
0
20
FY91
FY93
FY95
FY97
FY99
FY01
FY03
FY05
FY07
FY09
FY11
FY13
FY15
FY17
FY19
Current Account Deficit
CAD ($ bn) % of GDP (RHS)
133
125
81
32
68
0
20
40
60
80
100
120
140
160
Apr-99
Apr-00
Apr-01
Apr-02
Apr-03
Apr-04
Apr-05
Apr-06
Apr-07
Apr-08
Apr-09
Apr-10
Apr-11
Apr-12
Apr-13
Apr-14
Apr-15
Apr-16
Apr-17
Apr-18
Apr-19
Latest
Crude oil price ($/Barrel)

19. 18
The added advantage
Most stable government in place

20. 19
Make “business” the business of India!
 No business to be in business
 Aggressively divest PSU holdings
 Minimum government, maximum governance
 All blockades should be cleared
 Focus should be on creating jobs
 Kickstart growth
 Accelerated investment in economic & social infrastructure

21. 20
Covid – a temporary blip

22. 21
Covid pointers
 Covid now a known beast
 Global fiscal and monetary response
 In India …
 Fiscal deficit of 9.5%
 RBI ensuring sufficient liquidity
 Vaccination marks the beginning of the end
 Expect K-shaped recovery; larger businesses will recover faster

23. 22
Sensex can hit 2,00,000 in 10 years

24. 23
Expect earnings growth to revive, PEG 1x
73
78
92
131
169
184
236
281
251
247
315
348
369
405
416
397
426
449
483
472
535
750
871
FY01
FY02
FY03
FY04
FY05
FY06
FY07
FY08
FY09
FY10
FY11
FY12
FY13
FY14
FY15
FY16
FY17
FY18
FY19
FY20
FY21E
FY22E
FY23E
FY01-09:
17% CAGR
FY09-20:
6% CAGR
FY20-22E:
26% CAGR 27
13
17
20
24
27
31
May-11
May-12
May-13
May-14
May-15
May-16
May-17
May-18
May-19
May-20
May-21
10 Year Avg: 20x

25. 24
How 2,00,000 can happen
 12-13% nominal GDP growth
 7-8% real + 4-5% inflation
 Corporate Profit growth to be slightly higher than GDP growth
(i.e. 15% CAGR)
 Market growth broadly in line with Corporate Profit growth
 15% CAGR over 10 years is 4x
 50,000 x 4 = 2,00,000

26. 25
Sectors to watch out

27. 26
What is Value Migration?
“Value (i.e. profits & market cap) migrates
from outmoded business design to superior
business design.”
— Adrian Slywotzxy
Examples
 Telecom – from Wired to Wireless
 IT – from Boston to Bengaluru
 Banks – from public sector to private sector
 Many businesses – from unorganized to organized
Value Migration creates massive opportunity for sectors which see value inflow

28. 27
IT
 India has global competitive advantage
 Long digitalization runway ahead
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
0
10
20
30
40
50
60
70
80
90
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
IT Sector Performance (INR '000 crores)
Mkt Cap (RHS)
PAT
0.5% 0.7%
27.0%
12.4%
Share of PAT Share of Mkt Cap
IT - Share of India Inc PAT & Mkt Cap 1995 2020

29. 28
Private Banking
 Value Migration story will sustain for a long time
-100
-80
-60
-40
-20
0
20
40
60
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Banking Sector PAT (INR '000 crores)
Private Sector
Public Sector
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Banking Sector Mkt Cap Mix Public Sector Private Sector
CAGR - Private Sector: 31%; Public Sector: 15%

30. 29
Private Life Insurance
 Sunrise sector
 Here too, there’s Value Migration from public to private
2,426
2,705 2,720
2,964 3,013
2,679
2,509
2014 2015 2016 2017 2018 2019 2020
Life Insurance Sector PAT (INR crores)
70,277
1,59,385
1,38,251
1,50,611
2017 2018 2019 2020
Private Life Insurance Sector Mkt Cap (INR crores)

31. 30
Open-up Plays
 Sectors can be classified based on two types of demand –
 Lost demand
 Postponed demand
 Given Covid, market has hammered both sectors equally
 Post open-up, sectors with Postponed demand should surge
 Positive for sectors like Autos, Consumer durables, Paints,
selective Industrials

32. 31
Conclusions
 India is the ultimate Next Trillion Dollar Opportunity
 Adding 1 trillion dollars of GDP in successively shorter periods
 Key indicators are favourable …
 Democracy, Demography, Digitisation, Dollar reserves, Stable government
 Covid is a temporary blip
 Vaccination marks the beginning of the end
 Sensex can hit 2,00,000 in 10 years
 Required CAGR is just 15%
 Play Value Migration and Open-up plays
 IT, Private banks, Life insurance, Auto, Consumer durables, Paints, select Industrials
 Don’t bet against India
 Be optimistic and patient

33. Thank You !
&
Happy Wealth Creation !