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Day 2 of our Emkay Confluence set a record, with nearly 65 companies and over 500 clients taking in about 1,500 meetings in all. First, a quick glance at the key takeaways from the MainTrack session:

MainTrack summaries:

* Bhargav Dasgupta @ICICI Lombard remains bullish on growth prospects of GI in India, given not only the apparent under-penetration in most categories but also the non-substitutability of pure risk products. He feels Home Insurance is where Health was a decade ago — rising severity of natural catastrophes and a right regulatory tweak could accelerate adoption. He re-iterated the most important mantra of profitable growth, even as the competitive environment has become more conducive for growth.

* Angshu Mallick @Adani Wilmar sees a massive long-term opportunity for branded players in the USD125bn staples segment. Outside edible oils, the share of branded players is less than 10-12%. Sourcing of consistent quality at scale, low-cost logistics and competitive pricing will formalise the sector. Urban consumption will be triggered by innovative value addition.

* Professor Pushpak Bhattacharyya @IIT Mumbai enlightened us on the evolution of NLP and LLM. He also highlighted that adoption of AI is inevitable over the longer term, with material improvement in productivity. While a few low-end skilled jobs could be impacted and may have some near-term implications, he is convinced that the long-term outcome would be positive. Prof Bhattacharyya pointed to the democratization of LLMs that can aid in further advancement of technology. He personally believes that light-touch regulations are the key to higher innovation.

Company Meetings — Key highlights:

* There is increasing conviction on sustainability of infrastructure spend and a sizeable pick-up in manufacturing capex. Interestingly, growth in insurance premiums accompanying under-execution projects is up 35% in FY24-YTD. Apar highlighted a big recovery in the power supply chain.

* Cement demand is up strongly, in double digits, on the back of infrastructure spend. Companies are focussing on volume growth — Dalmia’s attempt to push up prices did not stick and had to be reversed to stem market-share loss. Lower input prices will protect margins, though

* We hosted nearly 10 banks today. Despite higher rates for a longer term, most banks expect systemic credit growth to beat the earlier expectations of ~12%, if the current trend endures. Views on NIM are mixed, but mostly company-specific, guided by product and liability mix. Asset quality is stable, though the upcoming state and national elections usher in an element of risk.

* Recovery in rural-centric 2Ws appears to be slower than expected. However, urban-focused segments (premium motorcycles and scooters) continue to fare well. OEMs and Ancillary companies are ramping-up efforts to benefit from the structural trends, towards premiumization (both segments and features).

* QSR companies continue to face headwinds, as consumers re-orient spends towards leisure and hospitality; this in a way is resulting in normalisation of surge in spends on goods during the pandemic. Interestingly though, urban-centric consumption (GoColors) and Uber luxury discretionary spends (Ethos) are holding up well.

* IT companies’ managements retained their cautious near-term outlook due to leakage in the base business, weakness in discretionary spending, and delay in decision-making amid macro uncertainties. Midcap companies are likely to maintain growth outperformance over large-cap peers which would sustain their valuation premium. Tomorrow we return with another 50 odd companies and keenly await engaging with you again

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