Key learnings from our India field trip We spent much of last week in India meeting both corporates (Beiersdorf, Diageo, Godrej Consumer, Heineken, Jyothy Labs, Marico, Reliance Retail, Titan and Unilever) and important domestic equity investors. This report summarises the key learnings from our trip. Fast pace of development We were struck by the fast pace of development since we were last in India (2018): new roads, metro lines and a high-end shopping mall in Mumbai being obvious examples. Growth was palpable. Comfort with valuations? Au contraire We had implicitly assumed that domestic investors must be far more comfortable with the valuation of Indian consumer assets than their international peers. Au contraire. There are big tax incentives for domestic investors to invest in domestic equities The heady equity valuation of Indian consumer assets is part driven by tax. For example, most domestic investors would face c.10% CGT on local equities vs. 30% on international equity assets. The growth of modern retail will likely continue to be slow burn In densely populated cities with high real estate costs, Kirana stores are an incredibly efficient distribution mechanism offering a wide range of services. The growth of modern retail will likely continue to be slow burn. Corporates upbeat and further observations Generally speaking, corporates were upbeat. While pricing will quickly start to fade, most corporates were confident on volume picking-up, gross margin recovery (in turn facilitating more AandP investment) and the recovery of EBIT margins. Please see within for more observations.