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so right now the largest profit pool in India which is growing also is that of banks financial services and second is it it has had the most dramatic profit pool expansion from 2000 2000 from in 2000 it was not even a percentage of total profit pool today it is more like 15 17% and growing and there is no year when it has not gained little share so uh my sense is it story is much bigger you I mean you don't have to stick to the current set of those top big companies they might give you 10 15% index return or something like that but below that there will be lot of companies which will try to come into with the big league you know so there'll be mid midsize companies which will because the economics is still remain great and then you have the new set of uh kind of small companies which are coming up product companies AI companies and so there will be specialized services companies which will be coming up where the cost structure is in India and the clients are all in us and Europe so I think that business model has huge potential we have done in last 2 20 this is 23 24 years story of Indian it uh and uh first $100 billion took about 20 years to get it and next next next bill next100 billion came in just about 8 10 years the $300 billion I'm not talking a small number $300 billion I believe is going to come in four to 5 years so that's the nature of expansion and there the players who are going to be disproportionately large I think they'll make it and we should be aligned to that a couple of years ago you made this very famous presentation the next trillion dollar opportun that was in 2008 we made that exactly so if you have to make that presentation again I'm sure the Contours would change so you you have to make that presentation for next 10 years how will that presentation start how will the presentation end no the one is that starting is scale when we did in 2007 it was a billion a trillion dollar we have already gone from 1 trillion to 3 trillion so a lot of lot of things what we said at that point of time uh we should examine whether they did they turn out to be uh so so clearly the discretion is spent when you go from say 3 and a half to 7 and 7 to 10 in next 10 12 years that's the journey now one one has to believe that this journey is bound to happen like 90% I would say 90 95% probability that this is going to happen so we are there now we have to see how to how to incash on that how to we position first thing is we have to be if go by my 100% allocated Equity okay so at least that don't the market don't time the market 10 12% uh uh index return must come to us so that is one one thing now within that there will be lot of opportunities of value migration and market share gains because digital power digital economy is not very Democratic it's very Consolidated so V takes it all even in a even in a very not digital businesses like say food delivery there are only two guys to start with they have not made a penny and yet they are only two guys so the all the profits of this particular industry will be taken by two guys so like that we are going to see say banking I mean the banking pool profit pool this year is upwards of 2 lakh crores okay and uh in next 5 years it will be more like four to 5 lakh cres in 10 years time could be about 10 lakh cres in that profit pool who to win so there'll be some digital players coming in you know and they'll make it very big in next 5 seven years now who is that guy who's that successful guy who's going to make it that one has to spot but I'm quite sure in uh this spaces some digitally powered companies will come and uh compound at 50 60 70% and what uh for hdfs of the world which itself has done wonderful job at about 25% compounded if you take it 20 35% at 35% is it is just double huh compounding at 25 and compounding at 35 is just double the pace so if you can get something at 35% compounded in 10 years you can do wonders there's a class of 21 we're using this term called class of 21 companies which V public between 2021 and 202 some of them will definitely make it you think some of them could make it B sure because that hype is busted down there's no more hype last year we were and November December last year uh there a lot of hype in you know crazy kind of valuation and so those things are gone 60 70% Corrections happened now can it correct another 2% that you cannot take it away but now the promoters have also come come to the census they also want to make profit they want to make profit very quickly and in any case they want to make large profits so some of them will be very successful and some of some of the companies are very unique I mean there are no uh me to companies in that particular segment so I think if there's a profit pool if the consumer Behavior has change in some of the companies clearly uh uh digital empowered companies are the companies where you can see few one lakh five L company companies coming in very quickly I mean if at all it has to happen it will happen very fast otherwise they'll just fall by the wayside when zamato went public you went on record and you said look you not you're not betting big but you are open to exploring how this business is evolving has zamato any other business any other companies where you invested in have those businesses evolved as per your expectations buiness see this has been very dramatic last one one and a half years has been very dramatic from the I mean in we are in listed space so we cannot not uh take notice of what is happening to the stocks so having seen that but we are meeting all of them now again we are meeting and uh we are trying to figure out where uh path to profits or size of the profit is going to be and the current market cap does it have you know some uh connection can we see light of the day day in what they saying that we are going to make th000 per it in next 3 years 4 years but uh they are saying so but can we get confidence on that so I think work is on let's see where exactly we put the beted but the way to go about is put a small bets now and uh a lot of things will go wrong but don't leave it some of them will become very large and out of three bets even if one is right you got next one has to be one has to be right I think because it's going to be which one according to you I don't know I don't have a name I don't have names on this okay there's one more U uh you know quote from Buffett's letter you have to keep on learning if you want to become a great investor when the world changes you must change you must change and this is coming from Warren Buffett who says look I'm going to be sitting sitting to my style of investment I not bought Microsoft but I bought Apple when my view changed how would you like to apply this in your investment style we we have not been you know kind of a guy who who says that I mean I have a dogmatic View of this way only I not quoted uh we we are flexible I mean we have like in 2000 the tech uh I mean I met maximum money in Tech but in he he awarded Tech at that point of time in fact I learned when to sell Tech while while in Omaha itself so uh infosis TCS infosis uh and mte and all we made tons of money I mean it went like Bess in 97 to 2000 I think stocks went 20x 30X in Just 2 to 3 years so clearly that was a time we made lot of money I mean we could understand the power of value migration in India in Tech sector and I think that migration is on now migration will move from the services company to specialized services so we have to figure out where is that opportunity and that itself will see now I think we've done a lot of local companies now time is coming in technology on some field we'll do bth we'll give birth to some uh global companies you know Global businesses because internet is uh all over so uh can we come out with a company which will take care of consumer needs all over the world you know so yes those opportunities are there let's see I mean opportunity are going to come from the conventional because you're going to go from 3 trillion to 10 trillion in next 10 years flat and that's a I mean almost a trillion every year uh so that's a big opportunity and uh we have to figure out which are the see you need two things one is the business Talent is there in almost all of them where is the management tent what you need to figure out is that which are the competent honest hardworking passionate managements who are there and that not necessarily that they are very expensive it is for you to go and meet all those managements and figure out uh here is something which is very different from other managements I'm going to get two graphs up right now first qgp a thesis or theorem which you've discussed with ramdev G time and again but there's something very interesting which we've discussed and we don't talk about it which is that a great business multiplied by a bad management is zero and a great management multiplied by a bad business is also zero uh that is importance I think Buffett is also talking about in the news if India is becoming more like an asset class now because globally everything is in shames why have Indian markets not given any return at least the index has not given any return from last 16 17 months now now after talking for you know very long term now you come down to a few months that's my job yeah so no no it happens uh I mean if you examine 16 months before that you had a bumper return so obviously it was way away so there's always reversion to mean and uh the stocks cannot fly you are already trading at almost you're the most expensive Emerging Market you are trading at upper end of your own valuation at about 20 21p so uh once the earnings growth pick up nothing is going to stop I'm telling you once for some reason the earnings in this quarter you might have seen except for financials everything else was you had the top line of 15 20% but bottom line was flat or negative because the margin compression is very high inflationary pressure on the cost side is not able to pass it on so I think something have something will change maybe companies will able to price it as we go forward inflation pressure goes down all over the world so we are able to pass on and see like you see the commodity companies they had bumper profits last year now their profits are yeah subdued so I think the user of the commodity I hope we'll be able to price it and pass on to the the consumers and improve their margins so I don't know what Dynamics will work but uh right now as we look at things I think Q4 results are also not going to be very different than Q3 so margin so the once the earnings explosion come see we have about 825 830 rupes EPS uh for Nifty uh ttf and uh that valuation is about 17,000 so about 20 times that's trailing but I always look at trailing because that's the only truth that's in the rest all is estimated can go now next year our guys are still at 950 but I don't think Market is expecting 950 uh because if it is 950 or uh Say closer to 960 970 then Market would have been far more buoyant so as the market gets confidence on next year's earnings growth I think Market will I don't think it is going to wait whether if I sell they buy Market will just blast India's 75 year history you see it has been slowly studly like an elephant it has been moving up okay with all the challenges they have just kept on moving kept on moving could be 4% could be 6% could be 8% 9% also be touched but on the whole we have been doing well and uh uh markets have also kept track now the the the country which has the longest I think one of the longest compounded I mean compounded past now my sense is we are going to have next 25 years of compounded future now what does that mean India uh as we stand today we are talking talking about 10 to 11% kind of nominal GDP growth rate because ultimately on a 270 280 lakh CR GDP we are talking about almost 30 lakh 28 29 lakh of additional GDP this year on that you have a 10% compounding every year
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