Installatorgruppen (Copenhagen:IG) — Investor Presentation

0:01 Good morning, and welcome to the INDIA CAPITAL GROWTH FUND LIMITED investor presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and can be submitted at any time by the Q and A tab situated in the right hand corner of your screen. Just simply type in your questions and press send. The company may not be in a position to answer every question it receives in the meeting itself. However, the company can review all the questions submitted today and publish responses where it is appropriate to do so. Before we begin, I'd like to submit the following poll. I'd now like to hand you over to Gaurav Nareen, principal adviser. Good morning to you, sir. Great. Thank thank you, and thank you all for joining us this morning. I am I am Gaurav Narain, and I've been managing the INDIA CAPITAL GROWTH FUND for well over a decade now. I'm based out of Mumbai in in India.

0:48 So before I thought start, I thought I'll just those who are not very familiar about the fund, what we really do. So we invest only in Indian equities.

0:58 We're fairly differentiated in the sense that we invest in the mid and small cap segment of the market. And we run a fairly concentrated portfolio, so we have roughly between 30 to 35 stocks. And because it's a trust structure, it helps us get into businesses which are relatively illiquid, and we can hold it for a for a longer period of time. So it's really that's how we structure. What I'll do is I'll spend the next twenty five to thirty minutes to give you an overview of what's happening in India and how we've really positioned the fund to try and capitalize on on on the changes that are happening in the economy. So, really, what is the story about India? It's really all about growth. If you look at this chart in front of you, this is data collated from the World Bank, which has been which has ranked countries by by on the basis of the size of the GDP over several time periods, and the orange line is that of India.

1:59 What you'll notice is that over every five year period, India's rank has consistently been increasing. In fact, last year, India went ahead of The UK to be the fifth largest economy. But I think most important more important is the fact that by 2030, India is projected to be the third largest economy ahead of both Germany and Japan Japan as well. And those numbers also flow out into the growth forecast which you you see from the IMF. These are the growth expectations over the next over the last year and the next two years by the IMF, all the leading economies in the world. And what you'll find is not only is India the fastest growing economy amongst a lot, but it's significantly growing faster than than China.

2:49 What we're actually seeing in India today is that it's actually in the midst of a full grown business cycle, and we believe that this is very sustainable. So why do we believe that this growth is sustainable? To address that, I would really highlight that there are two, three things which have happened in India. The first is that the economy has seen a very big transformation. There were two phases to it, and the first is that I would say for a four year period between 2015 to 2019, a huge set of reforms have happened in the economy, and these have touched virtually every sector of the economy. The focus of the reforms is really to bring about transparency, to reduce the role of the government, to try and use technology, to ensure processes are it's easier to do business in the country.

3:45 And everything from the taxation system to the banking system, real estate regulations, every sector saw a a fairly dramatic change in the regulatory environment. This was one aspect of the economy, and this phase really lasted till about 2019 when the big ticket reforms were done. The second big development which happened in the economy was on the digitization side that the same period saw India roll out a very strong digital infrastructure. And I would rate India's digital infrastructure as one of the best in the world, if if not the best. And I'll spend two, three minutes on this slide because what it really the digital infrastructure started with the government realizing that a lot of people who are living in small town India or rural India actually had no identity because they were not born in a hospital or they had no passport, anything to prove who they were.

4:38 So the government came up with a with a technology platform called the Aadhaar where they actually went virtually to every village and got everyone with a 12 digit digital identity number, which not just took their photograph, but also took their fingerprint, they took their, retina scan. So even if a person couldn't read or write, he had a digital identity. And today, virtually every Indian has the digital identity. Now with this digital identity, the government is using this as what is called the know your customer for anything to open a bank account, get a cell phone connection. All your KYC is done just with this 12 digit identity. Now once this identity was created, the government ensured that every household in the country had had a a banking account. They mostly forced banks to open accounts even in in rural India. The banks were very reluctant because these were low savings account. They were actually unprofitable.

5:40 But because of the KYC is being so easy, the cost of opening such accounts came down dramatically. And today, about 500,000,000 such low cost accounts have been opened. So this is the backbone to to the to the whole digital infrastructure. Once this was in place, the government has rolled out several applications on top of this. This is called the INDIA stack. And the first of them was called a a payment gateway called the United Payment Interface. It's very similar to a a Visa or a Mastercard, except that it's it's what you free of cost. And you can do a peer to peer transaction. You can do a merchant to merchant transaction, merchant to peer transaction.

6:25 And because it's free of cost, all you need is a phone number or a QR code and you can make transactions. So if I can I go to a cart window, I can buy a small as little as an apple and pay pay digitally two pens, etcetera? Now how it's transformed India is that today, you're seeing almost two eighty to 300,000,000 transactions a day. 40% of global real time transactions happen in India. That's the scale of change that's happened. Not just that, the government itself today, any subsidy it has to give, it goes straight into bank accounts of player of of the recipients. So very low wastage. A lot of frauds have been eliminated. So this whole process, what's happened is the economy has become very efficient.

7:12 It's really bridged the gap between urban India and rural India because the the technology platforms have made it so much easier to do business in India. And the big change is that all this is government owned. The entire infrastructure digital infrastructure of India is government owned, which is why it's large scale and and low volume. So having done this now in this whole period when all these reforms and and the digital infrastructure was being implemented, it really changed the way business was being done in India. And a lot of people who used play to the system, play the banking system, use the government to influence us, none of them could survive in in in this period. And you saw a lot of companies go bust, which was which the big hit was taken by the banking sector.

8:02 So what you saw was the period 2014 on was the non performing assets in the banking system rose to almost 6%. Lot of consolidation happened. Almost six to 70% of real estate developers have collapsed. Lot of consolidation in big sectors like steel, cement, and the banking system took a hit. Corporates went into a, you know, mode of conserving balance sheet, lowering debt. But today, you have a system in an economy where the banks are sitting on the best ever asset quality book. Corporates are sitting on the lowest level of leverage and high profitability. So you're in an environment today where the balance sheet and the health of the economy has never been stronger.

8:50 So having done the hard work, the government is now really pushing for growth. And I would say ever since COVID happened, the government is now really looking at the next field, which is really now building the next phase of growth for India. So they've done this to two two means. The first is post COVID somewhere around 2021. The government really realized that, you know, to get that animal spirits back is the government which has to really start the expend expending phase. So they've, you know, built a huge infrastructure pipeline. In fact, from their own budgets, the CapEx has trebled. And today, you have a pipeline of over $1,500,000,000,000 of infrastructure projects being implemented across the country.

9:36 To give a perspective, a city like Bombay itself is seeing about $50,000,000,000 of infrastructure projects happening. You're seeing about 30 kilometers of national highways being constructed a day, about 50 knot kilometers of metro line being constructed. The number of operating airports has doubled from about 75 to about a 150. So really, it's a whole host of infrastructure projects across the country. The 20 odd cities where metro railway lines are being built, including Bombay, which is about eight lines being built simultaneously. So that's really one side of it, is really to get that the CapEx mode of private bringing growth of the economy. But simultaneously, the government also to encourage the private sector to invest actually identified about 14 secondtors of the economy where they said, you know, India is a very large economy, but either we import a lot of products there. It's a very large market, but we import a lot of products, or we have a strong manufacturing base, we should use it to to encourage exports.

10:43 14 sectors were identified where the governments started providing incentives to encourage encourage manufacturing, and some of them have taken off dramatically. For example, the first of the sectors was electronic manufacturing. We sell about the domestic market is about a 150,000,000 cell phones a year. But till about five years back, 99% of phones were imported large largely from China. Today, after the scheme, it's met with dramatic success. Even companies like, Apple have shifted manufacturing, into India. In fact, last year, Apple itself exported iPhones worth, $10,000,000,000 out of India. That's the sort of change that's happened.

11:29 Take semiconductor. We have five semiconductor facilities coming up with investment of $18,000,000,000 currently. So, you know, a lot of changes happen, and today, we are seeing both infrastructure and the private sector putting in investments and CapEx. And you're seeing that in numbers. It's not just all talk. For example, credit growth today is trending at over 16%. It's at a decadal high. Tax collections, what you see on the slide on the right is indirect tax collection, and every month, they're hitting new highs. Last year, the direct tax collection itself grew about 18% ahead of the government's own forecast. Look at the purchasing manufacturers index. It's again trending at all time highs.

12:15 The chart on the right shows how order inflows have happened in some of the leading capital goods companies in India. Here too, most capital good companies are sitting on on lifetime high order books. And it's not just this. One sector which is seeing the which is possibly gonna be the biggest driver is the real estate sector. And unlike what you're seeing in China and other economies, the Indian real estate sector is coming out of a ten year slump. In fact, if you see the slide on the left, residential sales have been flat for almost a decade, and it's only in the last two years that sales have have start have picked up. But in this whole phase, what you saw was affordability has come down and and inventories at at at close to all time lows.

13:01 So the real estate sector is actually in the start of of of an up up cycle, which most analysts forecast will go on for at least another four to five years. So, really, what you're actually also seeing is flowing into earnings growth and GDP numbers. And the chart here is really showing how different institutes are constantly upgrading the India's own GDP forecast. And they're fairly substantial update upgrades and what used what people had forecast six months back at a 6.3 to 6.4% growth. Today, most institutions are anywhere close to 6.8 to 6.7 to 7% growth for this coming year. So, you know, the the changes are reflecting in actually earnings upgrades and GDP estimates going forward.

13:49 But what is really why we believe this growth is really sustainable is that what's really favoring India is that demographics are very favorable. In fact, India will have a rising working population all the way till 2070. And the chart on the left shows you that over the next twenty years, we'll be adding about a 150,000,000 people in the thirty to sixty years age bracket. So India will actually be the labor provider to the world going forward. And today, have a situation where almost 10,000,000 people are coming into the the workforce every year. But what's exciting is the chart on the right that India's per capita GDP today is just $2,500.

14:37 This is one sixth of China, and this is where China was in 2007. What I'm really trying to say is that as at such a low g per capita GDP, as growth happens, you'll see a lot of the incremental incomes going straight into consumption at that level. So really, that's the, I would say, the bigger picture story of India. And we in INDIA CAPITAL GROWTH FUND are really trying to write this big growth story in India. So how are we doing this? So just to give a perspective, how we really invest, we are very bottom up stock pickers. In fact, we take a very strong active position. We really don't look at what's in the benchmark. It's really each stock stock driven.

15:29 We buy for invest for the long term. So any stock we hold, we'd want to buy it for at least a three to five year holding period. Result is while it's a concentrated portfolio, portfolio turnover is all also very low. But what do we look in look in a business? We actually believe that there's no shortage of growth opportunities in India, but it's really what sort of company you play. So the key focus for us are are three fourth parameters. The first is is management. We really want to get into growth focused businesses, dynamic management, but very strong on corporate governance. On the business itself, we are looking at businesses which are scalable yet predictable.

16:14 So there should be some form of mote mote in the business. And finally, fundamentals, we're very cash flow focused and always look at a threshold ROC below which we all will not invest invest in a company. So to give a perspective, you know, on the portfolio itself, we've tried by bracketing into into into four four different types of companies. But the core of our portfolio is really what you see on the extreme left. These are what we call our consistent compounders. These are businesses which we see earnings growing at 15 to 20% for several years to come. And many of the companies we've highlighted here, we've actually owned for almost eight to ten ten years in in a in a portfolio. Where we are adding new opportunities is in the second column, which are a high growth companies.

17:04 These are businesses where we're actually seeing earnings growing in the 30 to 40% region for a few years, and they are really playing the new age themes like suppliers to electric vehicles or or supply chain reallocation or digitization. So a lot of themes where, you know, companies are capitalizing on the opportunity. But what I'd really like to highlight is while we play in the mid and small cap segment of the market, most of our companies would be leaders in the segments or have very strong niches which give them the long term com competitive edge. What we're also very conscious is that we are also playing the right segment of the market via digitization technology where we're trying to ensure not the company's actually capitalizing on the changes that are happening rather than being and as a risk perspective also whether they are positioned to to adjust to the changing environment.

18:05 Reallocation of supply chain is a big theme, and a lot of our portfolio companies are getting out of the supply chain shifting out of China. Consumption has been an evergreen theme. It's always been the largest share of our portfolio. And what earlier used to be very staples heavy today is more towards the disc discretionary spends segment because that's where we see the market move. And, of course, cap CapEx is also a big theme which we are playing through companies in the banking space, cement companies, etcetera. So really, we're trying to position our portfolio to capitalize on on the different segments of the market. Just a slight slide on on a stock addition and deletions. And I'd really like to highlight that this is over the last year and a half, and we've made just four or five new additions or deletions in the portfolio just reflecting that, you know, what we buy is is for for the longer term. What we definitely do is a lot of portfolio or weight adjustments based on how stock price have moved and how they are based on our fair value going ahead.

19:07 But it's really a a low portfolio turnover, but very high quality businesses which we build for for the future. Just a brief overview of our portfolio. It's fairly diversified, but what I'd really like to highlight is on the table on top, which gives the evaluation of the portfolio and the earnings growth. If you have a look, the earnings growth of our portfolio is well above 20%, which is really reflecting what we are talking about the economy, that the economy is growing and it's really reflecting in our own portfolio companies. Historically, our portfolio earnings have delivered somewhere in the in the, I would say, 17 to 20% range earnings. So clearly, we're seeing a much higher growth bracket. And even on the valuations, today, we're trading at, about 16 times, which I would say is very reasonable given the sort of growth we are seeing in the portfolio.

19:59 Just a bit on on our performance. I would say over the last decade since I've been managing the funds, we've compounded at about 14% on the NAV in in sterling terms. Our last three years have been good, but I I would say the last six months, we've been actually weak. In fact, we've underperformed our index a lot. And I would attribute it largely to the fact that a lot of companies I think there's been a bit of froth in the market, I would say, in the last five, six months. A lot of businesses which we never own have done extremely well. As I mentioned, we are very conscious on playing in the right segment and quality of businesses. So we'd rather avoid such businesses and play for the longer term term growth growth story.

20:47 Having said that, you know, I thought before I end, I'll talk a bit about the valuations. And the reason is that whenever I meet investors, everyone buys India story. Today, think it's a story when we did not sell. But the one question I get is India is expensive. So I thought I'll just touch on a few slides to give a perspective where India stands on valuations. This is how the Indian market has performed over the last year. The three year performance is much better. The blue lines are the different, and this is with the nifty 50 grid going through up about 27%. But it's the it's the mid and small caps which are, you know, up almost 60%, which is where a lot of performance has happened, which which is getting people uncomfortable on the valuations.

21:40 Having said that, valuations are expensive. And if you see the slide on the chart on the left, this is the MSCI India index, the price to earnings ratio. And what used to be an eighteen, nineteen p market today is somewhere closer to 21 times 20 times 21 time multiple. And this has happened when most other emerging markets have actually derated. So India has actually gone against the trend. And even on the chart on the right, which gives the premium of the Indian market to emerging emerging markets, India used to be at a at a 40 to 60% premium to emerging markets, and that has moved to 80 to 90%. So the fact is India is is not a cheap market. It is expensive relative to history as well as to other emerging markets.

22:32 But there's a reason, why India has has moved against the trend. In fact, what's happened is India has, I would say, over the last few years, delinked itself from global equity flows. In fact, the chart here on the left shows flows into the domestic into the Indian equity markets in the domestic mutual fund, and through foreign institutional investors. So the chart on the left, the blue blue column is money coming into domestic equity mutual funds, and the gray gray column shows money coming in from foreign portfolio investors. What you see is over the last since 2021, domestic equity mutual funds have seen net inflows of over $85,000,000,000.

23:23 In contrast, foreign portfolio investors have been very volatile, and the net inflows to these foreign institutions is just about 5 or $6,000,000,000 over this three three year period. So it's really domestic retail investors which are driving the Indian equity markets. Now what are what is happening in the domestic equity fund side?

23:44 Now what's really happened is if you see the chart on the right, these are monthly inflows into domestic equity funds through what is called systematic investment plans. These are small ticket inflows from retail investors from tier three and four town towns who are investing, you know, 75,000,000 such investors investing on an average £20 per month into domestic equity funds. And this has been consistently growing over the last five years. So, mostly, every month in the last five years, the net inflows has been a billion dollar or more, and they've been steadily rising to the extent that the last four, five months, this inflows has crossed almost $2,000,000,000 a month.

24:32 Now this is actually retail investors who typically invested their savings largely in real estate or gold. And if in financial assets, it was in fixed deposits of banks. And gradually, I would say because of digitization, easy access to broking accounts, better marketing by mutual funds, you actually see each one putting a small amount from their monthly salaries into equity markets. So that's the big change that's happened. But, clearly, the extent of flows in the way the mid and small caps have moved, the regulators are a bit worried because they're very cautious that retail investors should not move lose money, and they've been trying to talk down the market. In fact, India is a very well regulated market.

25:21 So both the the capital markets regulate regulators, SEBI, and the central bank regulator, the Reserve Bank of India, have been, you know, trying to talk down the market. For example, the stock market regulator was really talking about individual investors over the their data showed that in the last three years, 80% have lost market in the derivatives segment, about, you know, IPO investing where 70% of the retail investors are flipping in the next in just fifteen days. Basically, trying to say that, look, be kept cautious. The concrete action they've done is they've asked the mutual funds that, you know, all those that made in small cap fund, they should increase the risk disclosures by giving liquidity breakup, that how much time it would take to liquidate fifth 25% of the fund and 50% of the fund.

26:16 Just advising cautious caution. Likewise, the central bank is trying to ensure banks don't lend to to the unsecured segment or lending, which is less than £500. So what they have tried doing is they've increased the risk weights for banks to lend in this segment of the market. So, basically, no concrete action, but really trying to caution the market that, look, we don't want fraud in the in the in the market.

26:46 But having said that, how do we look at look at the markets? Are we really worried? Yes. Valuations are stretched. But having said that, I would look at India from a much longer term view. And, you know, the chart in front gives you how India has actually performed over long term horizons. Ten years, fifteen years, twenty years, and you see the the top 30 stocks and the mid cap index. I would say over the last over a long term period, India has actually been among the best performing markets globally, and these are sterling returns. And why has this happened? One of the principal reasons is that India's actually delivered on growth, and this is the nominal GDP growth of India in USD over the last decade. So India has actually grown at almost compounded at almost 10% over the last decade.

27:38 And our belief is that this growth will only accelerate going forward given the sort of changes we've seen in the economy, which which is really propelling the growth story going forward. So what what is the risks?

27:53 My firm belief is that I think, you know, what's happening in the economy, we're fairly confident that, you know, the next three, four years, the growth growth is a given because the changes have already happened. So if anything, it's really geopolitics which can can dampen that because India one of India's biggest concern is we import 85% of our oil. So that's, I would say, the biggest risk. The second and which is more current on the domestic side is that we are in the midst of elections. And while it's widely felt that the current government or BJP government will come back to par, should it not, it can affect the long term story. Why I say that is that what's changed on the election front in India is that we saw a period of thirty years from 1989 to 2004 where we always had a coalition government. So the chart is really showing the maximum seats the ruling party got in elections.

28:55 And you had this thirty odd period year period where you had coalition governments. But it was only in 2014 and 2019 where the BJP government came to power with a strong majority and which is where they've been able to implement a lot of changes and get the development agenda implemented. Now all expectations are this year, in these elections, are currently ongoing, this government will come back with even a stronger majority. In fact, the BJP government, is led by Modi, is so confident that they're actually anticipating to get 370 seats in in the selection, which is really two thirds of a majority. All opinion polls seem to indicate they will achieve that figure.

29:43 And really, the market is factoring in that they will fall be policy continuity. Should that not happen, and India is a very vast country, I mean, markets will be definitely disappointed, and they'll really question the whole sustainability of the story beyond for five years. But as of now, markets don't seem to be taking at the risk and opinion will seem to indicate that the government will really come back to par. So I'll end there and take questions. Thank you. Perfect, Gaurav. Thank you very much for your presentation. Ladies and gentlemen, please do continue to submit your questions just by using the q and a tab, which is situated on the top right hand corner of your screen. But just for the company to take few moments to review the questions that have been submitted today, I'd like to remind you that recording of this presentation along with a copy of the slides and the published q and a can be accessed via your investor dashboard.

30:36 As you can see, we have received questions throughout today's presentation. And, Lucy, at this point, if I could hand over to you to to chair just the q and a, that'd be great, and I'll pick up from you at the end. Thank you. Thanks very much, and thank you everyone for submitting some questions. I think we'll just kick off with the first one that was presubmitted. How will holdings change as economy shift to be AI focused? Well, as I mentioned that, you know, when we look at a portfolio company, you know, we're really looking at what are the risks and what are the opportunities. So I have highlighted how, you know, the whole digital revolution that's happening in India. We are very conscious of the managements of the company, and they're trying to capitalize on this opportunity rather than as a threat to the business.

31:22 So I think AI is one such area which is, you know, it's it's really continuing the whole digital journey. And I would say what we are trying to ensure is our portfolio companies are really the management is is really thinking ahead and trying to use these as opportunities as a competitive edge. And I'll give you an example. You know?

31:45 I think five, seven years back, we were most concerned on our banks, which which is what is over 20% of our portfolio and largely because you had all these fintechs which came into play. But I would say, you know, our portfolio company and most of the banking sector really invested hugely on technology. And today, I would say, from a threat, they've all all these fintechs have actually between become partners with the banks. And most banks, in fact, their own platforms and their apps, I would say, are far better than the fintech. So, you know, we have to be conscious. I think the the companies in our portfolio are also you know, we are ensuring we buy businesses which are very focused on taking advantage of the changes in technology than it being a a disruptor to the business.

32:33 Having said that, one other one sector which is very directly linked is the IT space. India is a very big IT services company, and we have almost three portfolio companies. But I would say what I have seen with the the IT companies is they have actually done a lot of training. In fact, most of the projects they're winning globally today are on the AI space where they're actually implementing projects for for global entities. So they're really in the cutting edge on that side. There's always a threat that their core competence is, you know, be on the programming and coding side, and that can be disrupted because AI can just take over that part of it. But here to what we've seen over the last five years, these companies have really been setting up their own platform so they can, you know, replicate.

33:22 Instead of duplicating the same work, you're setting your own platforms to make it your own activities more productive. So I would say it's not a disruptor. In fact, these companies are really taking advantage of these to just be more productive and and get different businesses. So I I would feel that, you know, portfolios will definitely change the country, but how we position ourselves, we're really trying to ensure companies are at the cutting edge of technology to take it as an advantage. And you've touched on the digital, digital stack and infrastructure spending. What impacts are other policy initiatives and government spending having on the investment landscape, and how is that impacting your investing decisions? See, I think one big change that's happened in India is that infrastructure has improved dramatically.

34:17 It's not just the digital infrastructure, but also the physical infrastructure. So India, the biggest bottleneck to companies today was that, you know, it'll difficult to do business in India. And it's a it's a vast country, you know, getting to the rural segments, etcetera, very, very difficult. I think today that has changed. And because of that, you're being able to you know, companies are being able the efficiencies you're being able to gain are significant. And so, you know, companies which are very regional specific or or are are being able to expand. And it's really I I would say the opportunity set is across. You know? It's in it's one of those situations where I'm seeing every sector as a story in India today. And what I'd like to highlight is in geopolitics is actually favoring India. While the rest of the world is is struggling, India has got into that sweet spot where, you know, every company is looking at finding alternative to China.

35:16 So even our economy global slowdown, India is actually gaining a lot of incremental businesses. So what I'm really trying to say is the stories in every sector today, and be it renewable energy, be it, you know, the new age, electric vehicles, or or, you know, the it's it's it's a whole gamut of opportunities we are seeing. And a couple of trickier questions for you. How does your performance compare to other Indian funds, trusts, or ETFs? You see, what I do is I try and if I compare it with the more diversified funds, would say we have a much better. If I I really compare myself to the small and mid cap funds itself, I would say we'd be in the mid range.

36:04 I've not seen the last months where we were actually disappointed on the performance, so I'm not so sure about that. But if you ask me about three months back, we were very much in in in the mid mid range. And I'm talking about the mid and small cap segment of the market. Because, really, that's how I measure myself because, you know, we don't have such funds in in the offshore segment. So, you know, so you compare what you feel is you know, so you don't Tom Tom too much that you've done much better because, you know, this is a segment of the market which has actually done much better. So So you should compare it from that that angle. And not to shy away from the difficult questions, but the trust discount used to be around 5%, and it's now gone to 10%. Are there any actions being taken to improve the discount?

36:53 You see, from my end, it's it's a lot of marketing, which I'm doing and trying to ensure that the performance performance sustains. I think having said that, I think the board is very, very conscious of of of managing the discounts. I think that's one of the key targets. And they do if the discount goes beyond a particular level, they've they've they do a buyback to ensure that the discount narrows. But from my perspective, I think my objective is really to to ensure that the fund performs, and that itself should should help in narrowing the discount. Thank you. And I think just one final question around the strong recent market performance.

37:38 How sustainable do you see the momentum with the consumption trends specifically and geopolitical considerations? So you see, I think what I'm really trying to focus is that, you know, the companies deliver on earnings. I think if the earnings story continues to play out, then I I don't see valuations as as an issue at all. And so far, what we've seen is I I would say the last three quarters, you know, broadly, you've been upgrading earnings. So I think that is really the key. If the earnings play out, the markets will continue to perform. So, really, what I'm really trying to build is that the portfolio delivers on on the earnings. So, really, it's as I mentioned earlier, the what you're really to buy is businesses which are predictable on the earnings.

38:30 You may get the valuations wrong a bit because but if the earnings play out, you know, time time will bail you out that a good business growing and, you know, it's just that the next year, you you'll see that play out. So what we've actually seen in a lot of our company and and and since we've owned most of these companies for well over five years, there will be periods of, you know, volatility evaluation move up, then you may have a year when the stock doesn't do anything. But over a three year, four year period, you'll see that, actually, they've they've given that 15 to 18% price appreciation. And so the for me, the key is really that what is in my control is is the company being able to deliver. So the whole objective is to ensure you buy these businesses where you have that confidence in the management and and the and the business itself that that doesn't disappoint you.

39:27 Thank you very much. I think you've answered all the questions. So I think that formally concludes your presentation today. Perfect. Gaurav, Lucy, thank you very much for answering all those questions from investors. And, of course, the company can review all the questions submitted today, and we'll publish those responses on the investor me company platform. But just before redirecting investors to provide you with their feedback, which is important to the company, Gaurav, could I just ask you for a few closing comments? Well, I would say the India story looks very good. I've, you know, I've been investing for thirty years now, and I've never been more positive on on the economy. And it's not just that. I think if you speak with corporates, there's a lot of confidence in the economy. And what this government has been able to do for the first time is given a longer term vision. So, you know, the government really has targets of where it wants economy to be in the next five years, and they even have targets of where they want to be in the next twenty five years.

40:22 And for the first time with this longer term vision, you're actually seeing corporates putting their money. India was earlier very risk averse. You know, people wanted their payback within three years. Today, you're seeing that with the bigger picture, the size and scale of thinking of the corporates has also also changed. So I would say it's a it's a very strong sustainable story which we see play out for India. You know, one is very positive that the longer term pictures never look better. Perfect. Gaurav, Lucy, thank you once again for updating investors today. Could I please ask investors not to close this session? As you know, we automatically redirected to provide your feedback in order that the management team can better understand your views and expectations. This loan take a few moments to complete, but some should be greatly valued by the company. On behalf of management team of INDIA CAPITAL GROWTH FUND LIMITED, we'd like to thank you for attending today's presentation, and good morning to you all.