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India: Is the recovery here?

• Although economic growth was suboptimal in CY2019 at 5.3%, 2020 began strongly with PMI data in Q1 reaching 8-year highs
• Coronavirus has delayed this turnaround, but not destroyed the green shoots emanating from rural areas
• The government stimulus package remains underappreciated by the stock market
• Reform momentum has restarted
• Although there are risks to our thesis, we believe that they are well-managed at this juncture
• Our primary focus remains on companies that will benefit from domestic, particularly rural, opportunities providing exposure to an uncorrelated source of growth versus the expected recession in Developed Markets
• The increasing geo-political tension between China and USA could provide economic opportunities for India over the medium term
• Given the favourable structural characteristics of India (e.g. demographics, and the shift from the informal to formal economy), the positive near-term outlook and compelling valuations, we believe that this is an exciting, less-correlated opportunity for the long-term investor