We are positive on India. The fiscal position is in good shape; we are seeing good FDI flows. The government is pro-business and we are seeing good execution. However, there clearly are some global headwinds that could, at a later stage, even impact India. As things stand, we are not too worried as a significant portion of our investments in India are in companies that are more domestic-oriented.
What are these global headwinds that you are referring to?
Lambah: The US is heading into an environment where they will hike rates at a faster pace. The fiscal stimulus is also coming off. In the next few months, there is a possibility of recessionary environment in the US. There is also a looming trade war and geopolitical concerns. For now, India is better-placed to handle any near-term pressures as the economy sees a lot of growth come from domestic consumption. However, if global conditions worsen, it could have a material impact on India as well.
What will be your investment strategy in India?
Lambah: At the moment, we are cautious and have subsequently moderated our investments in the country.
However, if the global situation improves, we could accelerate our investments.
What sectors are you bullish on?
Our investment themes remain more or less the same. We are bullish on consumption stories. We like themes like urbanisation and growing middle-income segment. We are also looking at technology-enabling companies and those sectors that are seeing a disruption because of technology. Our investments in firms like Zomato, Pine Labs or even Adani Ports, are examples of these themes.
We recently invested in Adani Ports as we want to play the consumption story through the container cargo growth. So, sectors that we invest to play our themes might vary, but the underlying themes remain intact.
Can you give more examples that highlight your approach to consumption stories?
Ghosh: This year, we announced an investment of $775 million to acquire the low-voltage switchgear business of L&T, along with Schneider. This business will get benefited from the growing housing demand and commercial demand.