Are you keen on pharma at all and which end of pharma, is it hospitals, diagnostic, domestic facing companies, CDMO players, export players, where is that you are finding value and comfort right now?
Dinshaw Irani: So, basically, it is kitchen sinking out there. I mean, the way you stated. So, I do not know. We are very keen on obviously hospitals. We have got a couple of players there that we like and that is more of a call on the per capita is moving up in our country and obviously health becoming a bigger spend, that is what one saw in China or any other economy which was picking up as such, so that is one call that we have taken. We like the CDMO space, no doubt about that and that is why we have only one player out there, which is probably one of the best players within that space as such.
And obviously the US facing pharma, if you take a Trump call, there is definitely going to be a pressure going forward as such, so that is why we do not like the US focused pharma companies much and we do not have much exposure there, rather no exposure there as such. We are more focused on to domestic pharma. In a diagnostic space, we got the best player, the top player with us.
With every two-three quarters the leadership in the market changes. What does well this year, rarely does well for two or three years more. So, what do you think is unlikely to be a market performer next year, from this Diwali to next Diwali? And what do you think could be a market outperformer?
Dinshaw Irani: So, I will tell you, the easier one is the calling out the outperformer. Financial services will definitely be outperformer. The banking space itself, which has been real laggard all these while, I mean, after COVID I do not think the banking space has done much as such, I think that should see a pickup, especially after RBI starts infusing some liquidity into the system. Obviously, the deposit raising will become easier. Obviously, there will be a lot of demand from the consumers and stuff like that, so that is why that space. And plus, secondly, the wealth managers, the exchanges, these are exciting spaces to be in. So, these may be the leaders of the pack going forward. Obviously,IT is another one that we are very keen on, that will be another leader going forward and by the way, the call is that there is only going to be a soft landing in the US if anything, it is going to be a steady pace that US is growing at, and the strength of the economy has been phenomenal as such.
So, I believe that IT should continue its mid-teen kind of growth going forward so that is why we are very keen on that. And in the consumption space, again, there are pockets where you can look at, like tourism is definitely going to be a big one. I do not think India has got any quality rooms. And given the fact that the Indian tourism itself is picking up, in fact, the recent article that I read up was that we are going to replace the Chinese in the next couple of years as the largest tourist base moving around in the world as such, so I am sure the domestic tourism also will pick up in a big way. And yes, and within that, we like the platform companies in the consumer space. So, these are the kind of leaders that one can look for. Obviously, the laggards, the shift will obviously move away from autos. I do not think the auto space has done phenomenally well in the last couple of years as such. But I do not think that is going to be the leader going forward given that the domestic demand is not that great and obviously, the fact that there is a lot of competition which will come in via EVs, our call is that in the next couple of years, you will get an EV cheaper than an ICE. So, it is best to stay away from autos as such.
I want to talk about another disruption and competition which is heating up and no, it is not quick commerce, because we have talked about it often. I am talking about the beverage industry and I understand you have exposure to Varun Beverages there. A lot of companies, including Tata Consumer, has gone on record talking about the threat coming in from Campa Cola. There is that headlines doing round how Pepsi and Coca-Cola are now looking at battling this away as well. What is your take, how is that going to impact the industry because you do have exposure to Varun Beverages? Help me understand what is the thematic on that one?
Dinshaw Irani: So, basically, there is a price war going on out there. By the way, we did a blind test in our office of some 30-40 people that we have in our office and Campa Cola did not come too high on their rating.
They found it too sugary. Some found it too sweet. Some found it too fizzy and stuff like that. But anyway, I am not even going there. So, what I think the counter that Pepsi and Coke are doing is they are coming out with budget. They are not letting their master brand getting hit. They are coming out with some budget drinks to counter Campa Cola as such.
So, I believe that is what is going to work out. Frankly, the market is too huge for this. There is always room for one more player to come in as such. But yes, it will be an interesting space. Though Varun Beverages coming to that specifically, I do not think it is a domestic story anymore. It is more of a growth of Pepsi globally and I think what Pepsi has taken a call on Varun is that he is a master at capturing market shares when he goes into newer markets and that is why all along they have been offering him new and newer markets internationally, I think that is where the excitement comes from.
