Helping You Build Wealth With Honest Research
Since 1996. Try Now

MEMBER'S LOGIN

MEMBER'S LOGINX

     
Invalid Username / Password
   
     
   
     
 
Invalid Captcha
   
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Lessons from Coca-Cola
Fri, 29 Jun Pre-Open

The Indian economy is facing tough times as the industrial activity has slowed down, impacting the revenue collection. On the other hand, the government borrowing is rising. Fiscal deficit has widened to a worrying 5.9% of the gross domestic product (GDP). Oil import bill is shooting up, compounding the problem. The government has not been able to push through important economic bills due to opposition, including from its own allies. There are also allegations from different quarters of policy paralysis which government has been consistently denying.

But among all the pessimism and low investor confidence, there is one company that is very bullish on India. And that company is Coca-Cola. The global soda giant in the last 10 years invested US$ 1.4 bn in the country and is planning to invest, treble that amount in the next 8 years. The reason why Coke is bullish on India is because of the country's strong fundamentals. At around 6.5%, India's growth rate is better than most of its counterparts in the BRICS group. It is also equal to the average growth rate of the first 12 years of reform. India's growth has been driven by investments made by the government and the private sector. Last year, investments accounted for an impressive 35% of GDP. This is not a sign of an economy going into stagflation.

Perhaps the main reason to be optimistic on India is that virtually all the reforms introduced under Prime Ministers Narasimha Rao and Atal Bihari Vajpayee, which raised the growth rate to 8-9%, remain in place. Policy paralysis has not meant policy reversals. Besides, the savings rate remains above 30% of GDP; and the earlier reforms-led productivity rise should continue to assure gains from these savings. Thus rather than bickering and blaming each other, Indian politicians and corporates should learn from Coke and help kick start India's growth story.

For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

View all commentaries | Archives

Read the latest Market Commentary


Equitymaster requests your view! Post a comment on "Lessons from Coca-Cola". Click here!

  
ABOUT EQUITYMASTER

Since 1996, Equitymaster has been the source for honest and credible opinions on investing in India. With solid research and in-depth analysis Equitymaster is dedicated towards making its readers- smarter, more confident and richer every day. Here's why hundreds of thousands of readers spread across more than 70 countries Trust Equitymaster.

PREMIUM PRODUCTS
QUICK LINKS
POPULAR TOPICS
TRENDING TOPICS
FREE NEWSLETTERS
EQUITYMASTER SUPPORTS
  • HelpYourNGO
  • You Tube
  • Linkedin
  • Twitter
  • Telegram
  • Google Play

Copyright © Equitymaster Agora Research Private Limited.

Whitelist | Refer | Terms | Privacy | Contact | About | Sitemap

Phone +91-9136015013

Equitymaster Agora Research Private Limited (Research Analyst)
SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
Telephone: +91-22-61434055. Email: info@equitymaster.com. Website: www.equitymaster.com.
CIN:U74999MH2007PTC175407

Name of the Compliance & Grievance Officer: Ms Sonal Ramachandran
Telephone: +91-22-61434003 | Email: compliance@equitymaster.com

LEGAL DISCLAIMER:
Investment in securities market are subject to market risks. Read all the related documents carefully before investing.
Registration granted by SEBI and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors.

All rights reserved. Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

Equitymaster Agora Research Private Limited (Research Analyst) bearing Registration No. INH000000537 (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA, Canada or the European Union countries, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.