![](data:image/jpeg;base64,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)
abrdn New India Investment Trust plc 9
Overview
General Portfolio
Information
In the year ended 31 March 2024, the Company’s net asset
value (“NAV”) total return rose 27.8%, compared to an 8%
decline in the previous year. A substantial part of that
negative return was clawed back by sticking to our long-term
quality investment philosophy and by repositioning the
portfolio towards structurally attractive segments that are
now paying off. However, the Company was not able to keep
pace with the MSCI India Index, which rose 34.4%. We explain
the reasons below.
Market review
As the Chairman describes on pages 6 and 7, the Indian
market had a strong run throughout most of the year,
underpinned by a robust domestic economy and an enviable
growth trajectory. Retail inflation has remained steady at just
over 5%, while the Reserve Bank of India has not increased
interest rates since February 2023. The estimated GDP
growth rate for the full financial year was projected at 7.6%,
surpassing the previous year’s figure of 7%, leading to India
holding to its position as the world’s fastest-growing major
economy. We did see some pullback in the market this year,
particularly in the small-and-mid (“SMID”) cap space. After
outperforming Indian large-caps last year, SMID companies
corrected in March 2024 when the Indian securities regulator
increased scrutiny towards domestic mutual funds due to
rising valuations. We had been very selective in adding SMID
names to the portfolio, preferring companies with good
earnings visibility and a track record of delivering on growth.
At the time of writing, India’s 2024 general election has just
concluded, and the outcome came as a big surprise to the
market. Polls had predicted that Prime Minister Narendra
Modi and his party would comfortably win enough seats in the
lower house of parliament to form a government on their
own. Instead, Modi’s Bharatiya Janata Party (BJP) failed to
secure a majority. This has forced Modi and the BJP into a
coalition government for the first time in his career. Modi’s
bargaining power within this alliance is likely to be reduced,
with a possibility of ministries reshuffling and some of them
being given to the non-BJP leaders. As a result, we will need to
keep a close watch on Cabinet formation and capital
allocation in the FY25 budget.
Thinking about the implications for policymaking, we view
BJP's broad agenda around infrastructure, manufacturing,
and technology is likely to continue, and would create
structural tailwinds for the economy. New big bang reforms,
however, are unlikely to come from a coalition government.
Instead, we could see measures favouring populist agendas
take precedence whilst there could be some moderation in
capital expenditure. Job creation and tackling the rural
economy could also take the spotlight.
The Company's quality focus and positioning in several
defensive sectors such as IT Services, Consumer Staples, and,
to some extent, Banking and Insurance, should provide
resilience to the portfolio through the current market
turbulence. Our conviction in our India holdings remains
strong, re-enforced by recent trips and meetings with
company management teams. Valuation dips could present
buying opportunities.
Performance review
The strongest returns came from the holdings in property as
well as from infrastructure and capital expenditure (capex)
beneficiaries in utilities and industrials sectors. Our consumer,
financials, and energy stocks, however, lagged the market’s
rally. Real estate was the biggest performance driver, with our
exposures benefitting from structural trends as well as the SMID
rally seen throughout most of 2023. Property developers Godrej
Properties (see the case study on page 12) and Prestige Estates
were the top stock contributors, reporting strong pre-sales
numbers for their new housing projects. India is undergoing a
long overdue recovery in residential property sales and the
future prospects for the overall sector remain bright.
We were pleased to see that our repositioning towards
industrial names and capex proxies has paid off. India has
ramped up public capex by building more roads, railways,
ports and similar projects to create additional jobs and revive
private capex. Our holdings that benefited from this step-up
in capital spending include ABB India as well as Power Grid
Corporation of India. Power Grid has raised its capex
guidance as its development pipeline and earnings visibility
remain robust. Meanwhile, our telco exposure in Bharti Airtel
(see the case study on page 11) did well amid ongoing
industry consolidation, and on expectations of a new tariff
hike after the elections.
Some of our IPO names that were depressed in the previous
year, due to the growth-to-value rotation in the market, have
started to demonstrate positive performance. This includes
affordable housing company Aptus Value Housing Finance
and online insurance
platform, PB Fintech.
Looking at where the Company has fallen short, HDFC Bank
and Hindustan Unilever have both disappointed in growth and,
therefore, in relative share price performance. HDFC Bank will
now take longer to deliver integration cost savings following
its merger with mortgage lender HDFC, in a tighter liquidity
environment. A sluggish rural economy has acted as a brake
on Hindustan Unilever’s growth. While we continue to believe
in the medium-term investment theses for both stocks, we
have partially cut these holdings to release funds for several
of our new ideas discussed below.
In the energy sector, our holding in Aegis Logistics
did well but
trailed its peers – mostly public sector companies – which we
tend to avoid owning in the portfolio. Index heavyweight
Reliance Industries lagged in 2023 but saw a recovery in its
Investment Manager’s Report