uh as usual we'll start with our monthly market outlook Please move to the next slide Next slide please Next slide please Next slide please Globally PMI continues to remain weak and the tariff war is likely to keep it even further down as the time progresses Next slide please The global pessimism has reached its peak as people are worried about what's going to happen with all this uncertainities behind us Next slide please These are the estimates before President Trump announced its tariff war in calendar year 2025 Global growth is slowing down The current estimate is that emerging markets will remain almost similar and developed market will advanced a bit But with this tariff for coming into play all these numbers are at significant risk We we will be lucky if we don't go into recession The central bankers are doing what they can do at best which is pumping liquidity and keeping interest rates on the lower side The European markets are near all-time high level They have outperformed American markets This is partly driven by fiscal profleacy path adopted by European Union As US pushed Europe on taking bigger share of defense expenditure they are going back on the fiscal prudence path increasing fiscal deficit and debt to GDP ratio and that surprisingly has resulted into their stock market running higher China again this charts are before the US tariff war but it was widely expected that they are keeping firepower on fiscal side to tackle Trump's tariff we don't know what will be the end game between US and China but certainly China would like to depreciate their currency and also provide fiscal stimulus to support growth which will be adversely impacted by US tariff Coming to US economy their challenge with federal deficit remains it has remained in high single digit over the years and they are spending more than they are earning The debt burden has cost $ 36 trillion It is now almost 123% of GDP If fiscal deficit and debt to GDP ratio wasn't a challenge the current account deficit remains elevated They are consuming more than they what they are producing With this combined problem of high fiscal deficit and high current account deficit US needed a course correction to fund fiscal deficit They kept on borrowing money and as debt burden kept on increasing there was one fear of inflation and second higher interest rates to contain that inflation The US is now spending $1.2 trillion on servicing that $ 36 trillion of debt It is up 2x in last 5 years What is President Trump's endgame no one knows We can speculate that he wants to reduce fiscal deficit through Department of Government efficiency run by Elon Musk Cut wasteful expenditure He wants to temp current account deficit by imposing tariff and also earning some revenue to contain fiscal deficit and he wants to moderate debt to GDP ratio through creation of sovereign wealth fund Obviously this is our guess but this looks like reasonable guess as with higher fiscal deficit higher current account deficit and increasing debt to GDP ratio US economy needed a course correction by unleashing tariff war the uncertaintity have reached all-time High people are not sure how supply chain disruptions will occur When will policy reverse what will be the end game of tariff policy yesterday we saw in a large market like US a two-month-old video of Kevin Hesset economic policy advisor talking about 90-day deferment of trade pol tariff policy except for China immediately pushed the market up then it corrected as white house clarified that it is a fake news and eventually market recovered from the low even though it closed in the red This is the kind of uncertaintity which US market and rest of the market is facing Fed continues to play a very very delicate role They have started they had just started cutting interest rates and have put a break as tariffs can increase inflation Fed chairman Jeremy Powell has withstanded barrage from Trump requesting or ordering for a rate cut and at the same time Fed has also reduced the pace of liquidity absorption so that economy doesn't crash Undoubtedly while one side the world is focused upon President Trump and President Zinping equally an important role will be played by Jeremy Powell Fed chairman through monetary policy Undoubtedly as mountain of debt increases in US they will prefer lower interest rates but for interest rates to come down inflation must come down and tariff is always inflation accretive never inflation deductive Next slide please President Trump created new definition of tariff It is your trade surplus with America divided by your exports to America Countries which have trade surplus with trade deficit with America like UK and Australia they also have been imposed tariff of 10% Countries like Vietnam which allowed their country to be used by China for assembling in Vietnam but showing that as made in Vietnam and who ran hundreds 100 plus billion hundred billion dollar plus trade surplus with America have been hit with duty of almost 46% We are lucky that we have been hit lower trade deficit visa with we have been hit with lower tariff rate visa with other countries The past experience of tariff war has been unequivocally recessionary First tariff of tariff hike of this mass scale happened in 1828 resulted into growth dropping down Then the same was experimented in 1930 that created great depression Let's hope and pray 2025 will be different This was my summary some time back about Trump's tariff saga that they are strong nation They couldn't care less about WTO But the past experience of tariff war has not been good either for America or for rest of the world This tariff war will create lower growth and higher inflation in US The pain of Wall Street can shift to main street between inflation and wealth evaporation There will be pressure on President Trump to re in tariff war Hopefully it will be reigned in before it is too late And India has been hit lower compared to peers which gives us an opportunity Let US and China fight it out and we should be beneficiary from this particular war In tariff war no one wins Normally on everything economists have three views positive negative and neutral But on tariff most economists agree it is a lose-lose situation The tariffs make goods expensive in US Yesterday I was in a conference where someone from US said I have stopped eating eggs in my home country because for 12 eggs I have to pay $13 In India eggs are available much cheaper and despite paying $13 availability of eggs is an issue in US If tariff is imposed eggs prices can go even further higher and that can also lift structural inflation expectation Consumption is about 2/3 of US economy or GDP More than half of financial saving is allocated to equity As Wall Street corrects this could have impact on the consumption and that could put break on the American GDP growth A corollary to the pressure is when people are postponing their discretionary spending like vacation in recent times Everyone hates uncertaintity Whenever there is uncertaintity spending will be postponed and hopefully savings will be increased Coming to India undoubtedly our FI26 GDP growth will be adversely impacted by American tariffs Earlier estimates were centered around 6.5% plus or minus GDP growth for FI26 Now it is likely to be centered around 6% plus or minus post tariff imposition The headlines for the March 25 were mixed with growing economy growing at about 6.2% in December quarter and FI25 growth pegged at around 6.5% well below 7% when we started the year Next slide please If we see last 10 years despite all the negative headlines and pessimistic commentary we are one of the few countries which have doubled its GDP in last 10 years from 2 trillion to 4 trillion plus Notwithstanding all the negativity of last 10 years India is one of the fastest growing major economy in the world Economic activity continues to remain at elevated level and capacity utilization remains around 70% plus level The quarterly GDP growth number keeps on coming down from April 2024 The June 25 number came lower on base effect September 24 number came lower on rains and delayed government spending because of election There was recovery in December 24th quarter and hopefully this will sustain going forward The GST collection for FI25 has come little below our nominal GDP growth It shows that while economy is growing the pace of growth is slowing down FMCG volume growth has started improving led by rural segment Urban FMCG consumption continues to remain under pressure Private consumption recovery is underway and this will get supported in the days to come as one lakh crate given in last budget comes into play from 1st April There is also likelihood of petrol and diesel price cuts as oil prices have moved from $80 to $60 There is also some positivity coming from reduction in interest rates on EMI burden of consumers and towards the end of next year 8 pay commission will put money in the pockets of government employees Tax rebates petrol diesel price cut EMI burden coming down 8th pay commission putting money in the pockets of government employees All should support consumption We have been lucky with President Trump's drill baby drill policy As tariff war for is lowering global growth oil demand is also expected to fall and oil now is trading at 60 hendle Monsoon has been good last year It filled our lakes with water So rais good And now all the indicators of El Nino and La Nina are suggesting normal monsoon for current year There are some weak spots in our economy The two-wheeler registered negative growth in February CV and passenger vehicle growth was also subdued Only tractor segment witnessed 30% plus growth in February on back of strong rural demand Undoubtedly overall automobile sector remains subdued The FDI outflows are coming down on a net basis as outflows have started increasing companies like LG Yundai Verpool they are all taking money from Indian companies Indian market abroad This outflow of FDI is reducing overall net FDI flows and it is a cause of concern as global growth slows down as tariff barrier comes up Both exports and imports have started slowing The services exports has been robust The BO the IT services and the global capability centers put together is keeping our service exports on the growth side And in recent times service exports on a monthly basis has started exceeding our goods export Our share of goods and services exports put together has now reached 2.5% last year compared to 2% few years before Our challenge remains on the goods deficit side We have last year about $240 billion trade deficit of which hundred billion dollar is simply with China The government will continue to focus on infrastructure spending In last 10 years our infrastructure capex has grown at a rapid pace Hopefully execution limitations which we saw this year will not be witnessed next year Private capex continues to remain subdued and this tariff war is going to increase uncertaintity which will further delay private capex The corporate balance sheet is strong and yet their desire to invest is on the back foot Some support has been given by government through PLI scheme and PLI and emerging se sectors contribute about 27% of industrial capex Without PLI scheme our private capex would have would have looked even more weaker than what it is today The other challenge for Indian economy is freebies to win state elections When freebies are distributed multiplier effect of the same is less than one times If the same money spent on infrastructure and capex multiplier effect is about 3x As we continue to take money from infrastructure and capex to put into freebies that's going to have adverse impact on our GDP growth Converting this economic outlook into market our market cap to GDP ratio has corrected from all-time high of about 140% to now about 108% We don't believe there is big correction expected in our equity market from a valuation point of view In FYI 20 corporate profit was 4 lakh cr Current year it is expected to be 18 lakh cr as profits multiplied 4 and a half times Market capitalization is broadly followed Stocks are slaves of earning power and as long as there is profitability growth eventually market will rise Valuation wise now we are trading around historical averages and after taking into current correction large caps is almost at historical average not at 7% premium The small and midcaps are at a premium to historical leverage and probably there is some amount of time or price correction left there Last year that is FI24 Nifty50 EPS was about 944 in the first 9 months of this of the last year FI25 776 EPS came now about 276 EPS is expected for March 25 quarter that means for FI25 last year Nifty EPS will be about 1,50 with tariff there is no way next year this year's Nifty EPS will touch 1191 it's more likely to be 1,00 11 it's more likely to be about 1150 to 1175 but this correction has already discounted the same FBI are big sellers in our market it's not that they have exited lock stock and barrel they continue to own onethird of free float ownership it's more than what mutual funds own It's more than what retail investors own It is more than what banks financial institutions and insurance own But collectively between banks mutual funds and retail investors Now combined we own more than FBI While FBI have been seller of large and midcap at least for the quarter ending December 24 they were buyers of small cap FBI ownership of Indian equity is at a decade low as low as it was in 2012 against our benchmark weight of about 19% in MSEI index FBI ownership is now at about 16% After years of underperformance to US market emerging market looks cheaper visa with S&P 500 with so much uncertainity in US market Will flows start shifting towards cheaper and attractive emerging market we believe that has reasonably good possibility Indian market provides growth opportunity Chinese market even today is where it was in 2007 17 years before their EPS growth will be about 12% in last decade in renmanb terms Our EPS growth will be about 180% in rupee terms As we deliver earnings growth there is no hesitation for me to say that FBI will keep searching for growth and start investing in India at some point of time Domestic mutual funds has cash to absorb FBI selling Obviously we don't work to give easy exit to FBI If their selling continues we will continue to buy at a lower and lower prices not at a higher prices With interest rates coming down Indian equity looks better valued visa with debt or bonds Despite last 6 months volatility almost 300 stocks have doubled over last 5 years Despite correction in valuation since October 24 169 stocks as we speak are trading at more than 50p One thing we have constantly requested is to moderate return expectation Last five years return in mid and small cap was 20% plus that pulled overall return to 15% But 15 years before that overall market return was just about 11% driven by large and midcap This combination of 5 years of outperformance and 15 years of moderate return create a 20-year return at about 12% with large mid and small giving almost similar return If investors are coming with an expectation to make 20% plus return they are likely to be disappointed We all have to work to ensure that investors invest on a long-term basis and with moderated return expectation Last five years return are unlikely to be repeated in next 5 years Be ready for volatility No one understands what President Trump will do next And hence despite having good fundamentals our markets will continue to fluctuate on news flow Keep some dry powder in your portfolio and use this correction as an opportunity to buy into equity Large caps trade around historical average and hence should be overweight Overall market valuation is fair Hence neutral weight to equity as an asset class Small and midcap still trade at premium to historical average So little underweight in the same that's broadly our call on the market Coming to equity investment opportunities on a rolling return basis our equity fund continues to add value to our investors by outperforming benchmark indexes by a margin The same is the case with hybrid and other equity funds on a point-to-point basis on 31st March 25 Across most of our equity funds we have delivered better return than benchmark indexes The same is true for hybrid and other equity funds By and large we have been able to add value to our customers portfolio If you look at SIP return across time period in most of the cases we have generated more return than benchmark indices The same is applicable to our hybrid and other equity funds Netnet we add value to our customers portfolio by outperforming benchmark indices As I mentioned earlier consumer discretionary space looks attractive because of tax rebate EMI burden coming down on interest rates correction potential petrol and diesel price cuts and finally next year 8 pay commission will put money in the pockets of government employees Hence kota consumption fund should be something which should be considered in your portfolio Other than that kotak equity opportunity a blend of large and midcap fund is worth evaluating from a portfolio point of view Next slide please This is broadly summary of our views on the market Not that we are always right in terms of magnitude but by and large we have been catching directions correctly We are in the process of launching our NF of energy opportunities fund The issue is closing on 17th of April Energy is like what atma is to the body It is the pran of the economy and invariably it's the ladder on which prosperity of a country rides Our power consumption remains way below global average and as India improves its per capita GDP power consumption will continue to rise We are one of the fastest growing energy consumer in the world As more and more people start using iPhone laptop iPad and such kind of things no wonder electric consump electricity consumption will continue to rise Rising affluence and evolving lifestyle always drives energy consumption In a hot country like India air condition will become first choice for consumer New age industry like data center EV metro will also continue to consume power Despite record capacity creation India is looking at power shortages as our capacity addition veers towards renewable energy between thermal and renewable like solar India will have to provide power to its economy hydro nuclear will be longerterm projects Our installed capacity is expected to double in about 11 years driven by growth in renewable moving from 32% of capacity to 61% of capacity in 2035 We also run a portfolio of passive funds Passive funds needs to be chosen for copying an index and also giving a very simple product to an investor who is just beginning his journey in the market We have bouquet of passive funds between index as well as ETF and they are in different categories from smart beta to commodity to market capbased indexes We were the first mutual fund to launch MSCI India ETF in the country by tying up with MSCI to use its benchmark indices Our passive bouquet also includes sectoral and thematic funds as well as overseas fund like NASDAQ 100 Are passive funds continue to have lower expenses than peers do have a look at this funds for your customer's portfolio Coming to debt market US inflation has stayed above Fed's target range of 2% for some time And with the imposition of tariff inflation is likely to remain elevated in US Fed deterred by uncertainity unleashed by tariff war has kept interest rates on hold But market is pricing that slowing economy and President Trump will push Fed to cut rates The street is expecting between three to five rate cuts by US Fed in the days to come Our inflation continues to remain soft Twothird of our inflation came from food increase food price increase last year And of the food price increase 2/3 came from vegetable price increase with good monsoon both should remain under control and hence inflation should come within RBI within within RBI's target range of 2 to 6% RBI has been managing liquidity very very proactively and in recent times it has intervened heavily through open market operation VR auctions and FX swaps to increase liquidity in local market This is time to go and invest for longest possible maturity The current 10-year yield is 6 and a half% plus If repo rate comes down by three to four times going forward certainly there is room for 10ear yield to go towards 6% Hence it is worth investing in duration On the debt investment side income plus arbitrage fund of fund gives you opportunity to invest in a debt product with 12.5% taxation on gains arising after 2 years of lockin This fund is appropriate for high taxpayer investors if they want to if they want lower taxation burden 60% fund is into pure debt and 40% is invested into arbitrage fund Collectively it will have lower tax burden The other debt fund which are worth considering is hybrid schemes between KOTC debt hybrid KOTC dynamic balance advantage fund and equity savings There has been lower volatility and higher return over a period of time Nothing comparable to pure equity but certainly collectively they have delivered lower volatility and higher return compared to that fund gold We have remained bullish since COVID time and bearing one year in 2021 By and large our calls have come right Today our household owns more gold than top 10 central banks put together The demand of central bankers around the world and Indian household is supporting gold prices higher There is race between Indian housewives and central bankers around the world who will buy more gold Today both of them are averaging about thousand tons of gold on a gross basis The world does not have enough gold to meet demand of both central banks of the world as well as Indian housewives While gold is being talked about do look at silver The silver versus gold has come down to below historical average indicating that silver probably will get supported in the days to come We continue to remain engaged with distributors through sports music celebration as well as through business hub for education purpose Do enjoy those facility and give your feedback to us so that we can do it better next time I'm sure all of you have noticed campaign this will become more mainstream in the days to come With this I'll end my presentation but happy to take your questions if you can put the same in Q&A box Uh Karthik has given a call that KOTC multiasset fund is underperforming Please give some inputs Kartik by we were little aggressive