On Episode 839 of The Core Report, financial journalist Govindraj Ethiraj talks to C S Vigneshwar, President at FADA as well as Ashish Nanda, President and Head Digital Business of Kotak Securities. We also feature an excerpt from The Media Room interview hosted by Vanita Kohli-Khandekar and featuring Ashish Pherwani, Head of Media & Entertainment at EY.

SHOW NOTES

(00:00) Stories of the Day

(00:50) Markets rise on Monday morning peace overtures

(05:35) Electrification of vehicles is rising in India as March sales hit record

(12:43) Why India’s print industry continues to surprise, new findings

(18:26) How a higher STT on futures and options affect the industry

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NOTE: This transcript contains the host's monologue and includes interview transcripts by a machine. Human eyes have gone through the script but there might still be errors in some of the text, so please refer to the audio in case you need to clarify any part. If you want to get in touch regarding any feedback, you can drop us a message on feedback@thecore.in.

Good morning, it's Tuesday the 7th of April and this is Govindraj Ethiraj broadcasting and streaming weekdays from Mumbai, India's financial capital.

Our top stories and themes…

The stock markets rise on Monday thanks to the usual morning peace overtures from Washington.

Electrification of vehicles is rising in India as March sales hit a record.

Why India's print industry continues to surprise new findings

And how will a higher securities and transaction tax on futures and options affect trading.

Markets, Oil and The Rupee

So was it the now predictable Monday morning market-friendly leaks from the White House or something more serious? Well, we will know in a few hours once again. Since peace is what we want like most others, we have no choice but to put some hope in the sleight of hand leaks even if only for short periods.

The United States and Iran have received the framework of a plan to end hostilities but Iran rejected immediately reopening the Strait of Hormuz after President Donald Trump threatened to rain hell on Tehran if it did not make a deal by the end of Tuesday. Iran had also said it had formulated its positions and demands in response to recent ceasefire proposals conveyed via intermediaries according to Reuters. The Strait of Hormuz carries oil and petroleum products from Iraq, Saudi Arabia, Qatar, Kuwait and the United Arab Emirates and has been mostly closed since the war started on February 28th.

Though, ships of friendly nations, including India that is to Iran, have secured safe passage. In keeping with the information in the leaks, oil prices fell on Monday. Brent crude futures were down at about $108, which is also substantially high, and U.S. West Texas Intermediate futures were also down at $110 per barrel on Monday morning.

As you can see, the prices are not exactly crashing since the oil market has learned to watch, like all of us here, the actions rather than the words. And as far as actions go, the bombings continue of civilian and non-civilian infrastructure in Iran. The Indian markets, equally driven by hope than reason, saw a strong rebound.

While the rebound may have been sentiment-driven on Monday, it is likely that there is some bottoming out in prices right now, as we discussed on Monday's Core Report as well. At close, the BSE benchmark was up about 787 points to close at 74,106. The Nifty 50 closed up at 22,968.

That's up 255 points. The broader markets were also up. The Nifty mid-cap 100 was up 1.5%. The small cap 100, about 1.3%. Meanwhile, some of the gloomy reports, which are obviously to be expected, have begun to come in.

A note from Bernstein says, a sustained raise in crude oil prices above $90 a barrel will start to dent Nifty earnings. According to a Business Standard report, every $10 per barrel rise over $90 per barrel would perhaps see a 2% to 3% decline in Nifty earnings, according to a note from Bernstein. Now, what they say is that the direct crude linkage in the Nifty index is not very high, unless crude starts touching extremes, where other factors like rupee inflation, remittances, and government policies start having an impact.

So what the note says is that the Nifty's long-term earnings per share, or EPS growth, which has averaged 10% to 11%, could go to 7% when oil goes from $60 to $90 a barrel. So this comes out to about 1% sensitivity to crude movements, and more extreme movements are a little difficult to predict since many variables come into the picture, according to that Bernstein note. The rupee was mostly unchanged on Monday, thanks to dollar sales spurred by the winding of arbitrage positions and importers' hedging demand, according to a Reuters report, which added that the rupee closed at Rs.

93.06 against the dollar after closing at Rs. 93.10 in the last session on Thursday. Thursday also saw the rupee jump about 2% from a record low of Rs.

95.21 after the Reserve Bank of India came down on speculation. Meanwhile, tomorrow is credit policy day and the Reserve Bank is unlikely to touch rates because presumably it's too early to take an interest rate call as the data is still filtering through. And some macro data quoted by Bloomberg, India sold about 25% more vehicles in the month of March, which also made it the best selling March, and more on that shortly.

Consumer staple companies are seeing steady domestic demand with companies like Marico and Darbar reporting a sequential recovery in the January to February March period across food and beverage, personal care and home segments, and loan growth has remained strong across banks at nearly 14% for the quarter, according to a Macquarie Capital note quoted by Bloomberg. Elsewhere, all but two of the 71 economists in a March 23-26 Reuters poll have said the Reserve Bank of India will keep the benchmark repo rate unchanged at 5.25%. As a backdrop, the Reserve Bank of India's Monetary Policy Committee has cut rates by a cumulative 125 basis points in 2025 and then paused at its February meeting. The Reserve Bank Governor in December said India's economy was in a Goldilocks phase, which means combining strong growth and low inflation.

And of course, if the energy shock continues, then a lot of numbers will change. But we will come to that a little later or in a few days time.

Electric Car Sales in India

India's auto industry is electrifying faster than expected.

And all of that is obviously welcome news at a time of energy shortages and energy shocks. And March seems to have been a particularly strong month or rather the best month for the auto industry in terms of sales, though April could see some numbers fall even as manufacturers might be forced to cut back on production. For the whole of last financial year, retail sales of vehicles across category grew about 13.3%. Passenger vehicle sales were up 13% according to the Federation of Automobile Dealers Association of FADA, while two-wheeler sales also grew about 13% in 25-26.

I reached out to C.S. Vigneshwar, President of FADA, based out of Coimbatore, and I began by asking him what are the big trends he noticed in sales last year that could carry forward into the current financial year.

INTERVIEW TRANSCRIPT

C S Vigneshwar: The most recent of the trends was of course the GST impact from September onwards. So the first five months of the year it was quite done and then it was on a absolute afterburner the last seven months of the financial year. The overall growth as you said is beyond 13.3 percent. Every sector grew and we also reached record numbers overall. It's always good to know that numbers are doing well and these things are happening but as you rightly said what helped really was the GST reform. I think the states and the centre coming together to do this has really worked because we were at a plus 20 percent growth rate in the last seven months.

So that has really helped to consolidate a good number by the year end. The rural economy has been doing well for the last few years. Harvests have been great.

The minimum support prices have been very very supportive and strong. All these things have helped. We're also finding that more and more companies including banks and financial institutions are realising that rural is the last frontier because urban markets they've been there present for long and they also run business there.

Of course opportunities do exist in the urban market but rural markets are less competitive given the situation right now. More and more banks are going there. Things are going to get more competitive and we also see that credit lending has been very very good.

The availability of credit has been good. All things have been helping out the rural markets.

Govindraj Ethiraj: Right so when we last spoke and maybe even the one or two occasions before that you had pointed out how the GST cuts in the entry-level car segment were really the big drivers of unit numbers. And to what extent is that continuing and if you could give us a sense on within the overall four-wheeler market how things have moved and are likely to stay or maybe improve or become better this year.

C S Vigneshwar: So a lot of new products are coming in so that's really going to help. We're also having a lot of products coming into the CNG, LPG, hybrids and EV domain so that also is going to help. These alternative fuels if I can call them these four or five of them have been really able to work hard in terms of getting to nearly 36% of the Indian market.

So alternative fuels like LPG, CNG, hybrids and EVs are more than one-third and right now we're also seeing that this will go further in the next year to come. We've also seen that the three-wheeler market has completely shifted nearly 65% plus to EVs. We have seen that in March EV in two-wheelers have hit nearly 10% and this is all set to grow.

This is all not going to go away and these are all trends which are here to stay. If the markets are growing of course the entry-level segments are doing well but there's also a premiumization of the vehicles. People are going for better vehicles, better spec vehicles, better equipped vehicles, more comfortable, safety is better.

So probably even the efficiency is better. How are they able to do this? Because a lot of these vehicles are funded.

They're able to go for longer EMAs through which they can afford taking these vehicles. So all these things are helping out and I think the stronger the credit availability becomes even in urban markets it's really going to help out customers and for us as dealers to sell vehicles to those customers.

Govindraj Ethiraj: Right and here's the tricky question. We've begun April and all of March we saw a war that has slowly accelerated or got worse. How are things looking like now given the fact that there are so many other macro factors at play including let's say businesses who are hurt and people who are unsure about their incomes?

C S Vigneshwar: It's a million dollar question which I don't have an answer for but of course we can speculate with whatever information we have. We probably don't have a supply issue for the next few weeks if the war does come to an end. They're talking about a 45 days ceasefire.

If that happens it's going to help us out but right now if it continues beyond this month we are definitely going to have supply issues. Even right now I heard from OEMs that the government has asked OEMs to reduce usage of gas and gas is used for the paint booths. They're used also by Tier 1 and Tier 2 suppliers for manufacturing spare parts.

So all this is going to get affected. Aluminium again is heard that is in short supply. So we have 28 days of stock on average at dealerships.

I'm sure the component manufacturers also have a few weeks of stock and usually the manufacturer also carries a few weeks of stock. So probably a month, month and a half of stock is already there and when the government asks the manufacturers to reduce their vehicle supplies it's not going to go to zero. Probably around 25-30% but still availability is going to be there.

So it's a good time for the buyer to actually go and quickly snatch up the vehicle of his or her choice because the same spec won't be available in another month's time. There's going to be limited supply. I'm very sure that discounts also which are quite high right now will come down because supply is going to be constrained.

But we have seen worse. We have seen many wars. We have also seen our own war operations and we also seen tariffs.

I think everyone is calling this a VUCA world. We have seen enough volatility. We had the COVID before that.

So I don't think the Indian economy is really going to come to a stop because our domestic production consumption is very high. The costs may go up which might increase inflation but the economies will keep rolling up.

Govindraj Ethiraj: Right and last question so and you're not seeing any or are you seeing any impact of all of this or what's been going on in the last month at the dealerships in terms of walk-ins or consumer queries or customer queries. Not really the walk-ins are strong.

C S Vigneshwar: That's why we concluded March also very very strong. So it was a very good March. So that we can probably summarise that walk-ins are not an issue but there are certainly sentimental issues where people are wondering what's going to happen tomorrow.

But even if they wonder that way I think they would probably transportation is something which they want to make sure they have it. So I think that would really help us out and more and more people moving to alternative fuels also would help the nation. We also reached E20 fuels all our petrol pumps are E20 by month end of March.

So yes the government is doing things we need to do things and we just need to be positive and move on because there'll be another crisis coming up all which we need to move on.

Govindraj Ethiraj: Vignesh very optimistic note to close on. Thank you so much for joining me.

C S Vigneshwar: Take care. Have a nice day.

Print Resurgence

India's media industry has seen some surprising growth trends and expansion numbers in 2025 in television, digital, and even print. According to the latest FICCI, Ernst & Young Media and Entertainment report released about two weeks After two years of muted performance, the sector exceeded nominal per capita GDP growth supported by recovery in advertising, increased digital consumption, and a resurgence in live events.

The overall media and entertainment sector touched about Rs 278,000 crore or about $32 billion in 2025. Thanks to the same areas of advertising, live events, and digital subscriptions, digital advertising grew 26% to about Rs 94,000 crore, accounting for 63% of total ad revenues in 2025. Live events grew 44%, while television, radio, and online gaming recorded declines.

So what are the other noteworthy trends and why or how is that print, quite counter-intuitively, is growing? Vanita Kohli Khandekar, who hosts the Media Room on and for the Court, caught up with Ashish Pherwani, Partner Media & Entertainment at Ernst & Young, and began by asking him about the key takeaways.

INTERVIEW TRANSCRIPT

Ashish Pherwani: I think this year the top few messages, if I would just take a step back and look at it, I think the first one is that finally the media sector grew faster than our nominal per capita GDP did. And I think that is something that is a systemic difference from what we've seen over the last few years. A lot of that had to do with the government's consumption focused budget, the increased capital expenditure of the government, the direct benefit transfers that happened, the GST rate rationalisations, the overall slowness in the interest rates and FDs and other things which got people out there spending.

And I think that's something that resulted in advertising growing by almost record over the last few years that I can remember at over 13%, right, and crossing 1,50,000 crores. That's a big number. So I think that's one of the biggest things that we saw last year.

The other interesting thing was on just the sheer scale and size that digital media has reached. Now on one hand, TV is still the largest segment by reach. It still covers 745 million Indians.

But digital media is the first segment which has actually crossed the 1 lakh crore revenue number. So that was the second highlight of the year for me. And a lot of that was due to digital advertising and subscription both grew.

But the rate at which some segments of advertisers like the small and medium enterprises are spending 30% growth in that. Fantastic. 50% growth in advertisers, advertisement spends on ecommerce platforms.

I think that's where the real power behind the economy came out. That's message two. Message three is experiential and live.

I think if you look at it from both sides, whether you're talking cinema, which is a great family experience, a great out of the home experience, or you're talking events, events grew 43.5% because of course, there was a Kumbh Mela last year. But even if you take out the impact of the Kumbh, it grew at over 20%. So that's the kind of growth that live events are seeing.

A key number there in my mind is the number of concert days, ticketed event days. You know, it is fascinating that in 2024, when we did this analysis the first time, there were 70 days where 10,000 or more tickets were sold in concerts. And that went up more than double.

It is just the scale at which people are spending is mind boggling right now. And on the film side, you know, 20,000 crores, it's a benchmark for the film industry.

Vanita Kohli-Khandekar: Okay, now to get back into the little bit more of the detailing, and I'm sorry, I have to bring it up. I'm a print writer. Print has shown resilience again, last year, 3% growth, this year, 1%.

What's happening there? Is it newsprint price effect? Because advertising is, especially premium advertising, yes, I know it goes to print a lot.

But what is the effect at work?

Ashish Pherwani: See, I think it's not really the newsprint prices. I think what's happening is very simply, the way print has done two things over the last four or five years, I think is a case study in itself. The first is that print positioned itself as a doorway to premium audiences to affluent audiences.

We're giving you not just in metros, but also non metros, we are giving you rich guys who are educated. All right. I don't think it's possible to launch a premium product today without a print jacket.

It has just become the default media plan for any premium product. The second thing that print did very interesting over the last two, three years is they've literally become top of funnel for e-commerce platforms. You will see every e-commerce platform going out there and saying, this is my big billion day, or this is my prime day, or this is my special discount, I'm big basket, and this is Independence Day sale.

Print has played a fantastic role of getting that there act together. In fact, I was talking to LV the other day at TAM, and he gave me some fantastic statistics. He said one in three print ads now has a call to action.

It has a discount. It has an offer. It is becoming almost a performance medium in itself.

The way print has repackaged itself, if I may say that, I think these two things are just masterstroke that the industry has done. That's why when you meet all the print CEOs, they're young, they're so passionate about what they do. I'm not surprised the industry is growing.

A Tax on Futures

The cost of derivatives trading has gone up from the 1st of April 2026. Options trades saw a 50% jump in Securities Transaction Tax or SDT, while futures trades saw a 150% jump.

So what are the details on this and how is it impacting the markets overall and the linkage with the underlying cash markets to the extent there is one? I reached out to Ashish Nanda, President and Head Digital Business of Kotak Securities, and I began by asking him how he has seen the impact.

INTERVIEW TRANSCRIPT

Ashish Nanda: So, Govind, I'll break this question into two parts. One is the STT increase on options and one is the STT increase on futures. I'm breaking it up because the increase is different for options and futures.

Options increases from 0.1% to 0.15, which is a 50% increase, while the futures increases from 0.02 to 0.05, which is technically a 150% increase. But the fact that we have to understand is that on options, the STT is levied on the premium, while on futures, the STT is levied on the notional value of the contract. So just to give you an example, say one nifty contract, and just for easy understanding, let us keep the contract size at 15 lakhs.

It is slightly more than 15 lakhs, but for easy calculation, let us keep it at 15 lakhs. So if you take a futures contract at 15 lakhs, earlier the brokerage charge was 0.2%, which was 300 rupees. Now this value has gone up to 750 rupees, being 0.05. So the increase is from 300 to 750, which is a 450 rupees increase. On the options side, it is more on premium than notional value. So just to take an example, a 15 lakh contract, say the premium amount is 20,000 rupees. So on 20,000, at 0.1, the STT was 20 rupees. At 0.15, it increases to 30. So the increase in an option contract is about 10 rupees, while an increase in a futures contract is 450 rupees. So in my understanding, while the volumes could drop a little bit initially, because of increase in STT, in options, I believe the volumes will come back, because the increase is still a nominal increase.

While the increase in the future side is very steep, and I believe there the volumes will really get impacted. There will be customers, there will be large institutions, large traders, prop brokers, who may shift from futures to synthetic futures. So making the futures contract out of options.

So I believe the futures increase is a little steep at 150%, but options is still manageable.

Govindraj Ethiraj: Siddharth Right. And how have you seen the overall volumes in this space in the last, let's say, six months or so, or at least since the budget was announced? So before the budget and after the budget?

Ashish Nanda: Govind, if you actually see, options volume actually took a dent way back in November 2024, when SEBI came with a lot of measures to restrict retail volume in options. SEBI took way back in November 2024, really dented the number of customers who are now using options as a tool. The other two are more value-based.

So one is premium, premium volume, the premium volume corrected by about 20%. The volume used to be about 60-65, it came down to about 50,000 average daily volumes. And the third one was number of contracts traded in a day, that took a 70% dent.

So the volumes did come down because of all those measures, but because of this recent volatility over the last three months, post-budget, the war, and whatever geopolitical things which are going on, the volatility has gone up. So what we are seeing is while the number of customers still remains muted at about 32 to 33 lakhs, premiums have really gone up and we are seeing some all-time high premiums, average daily premiums are at about 1 lakh crores. So the premiums have come back, number of contracts traded continues to be subdued.

But yes, over the last three months, we see significant increase in volumes on the F&O side.

Govindraj Ethiraj: So two questions. One is, what does that reflect when you say that the average size of volumes has gone up? And secondly, how would you look at the activity in the F&O market in relation to the overall liquidity in the stock exchanges or in the financial markets or secondary markets and the linkage between the two at this point?

Ashish Nanda: See, what I strongly believe is what SEBI has been concerned about is retail participation in F&O. And I think that retail participation has kind of come down by about 30-30%. Number of customers trading in the market have reduced post the measure that they took.

See, the increase in volume is more because of volatility, because when the volatility is very high, the index moves much higher and futures and options move even higher. So I think the current increase in volumes over the last two, two and a half months is because of purely volatility. And if geopolitical situation improves and the war kind of gets over, I think we'll be back to muted volumes.

But yes, the volumes have kind of picked up from the low that they had made at about 50,000 crores. I think the current volume is more because of volatility rather than because of any actual change in the market. The volumes will come back down.

But yes, they will be more than what they were at the low. Overall market scenario, I think between cash and F&O, I think cash volumes have also come down because with the markets coming down from 26,000 levels to currently about 22,000 levels. On the retail side, there are a lot of people who kind of don't trade too much.

So volumes are a little lower. But I think between the two while F&O volumes are up, but I think these volumes will correct over a period of time.

Govindraj Ethiraj: Okay. So as you look ahead, how are you seeing overall volume, let's say the trajectory, volume and participation trajectory as you look at the next few months, given their overall markets are and the fact that there's so much uncertainty, particularly after war?

Ashish Nanda: I'll divide the answer in two parts. One is a little longer term. I think India where it stands, these volumes are only going to grow from here, both on the cash side and then the F&A side.

I think whatever is said and done, I think as adoption of financial products increases in India, and which is kind of increasing on the cash side, the number of investors increasing, I think this volume is going to grow. I strongly believe that over the next two, three months, there could be some reduction in volume because of all these recent actions which go live from 1st of April. Another reason is the RBI circular on BGs being issued to prop traders, prop brokers.

That is one more issue while the circular has been extended from 1st of April to 1st of July. That is something else which will dent the volume because prop brokers make up about 30 to 35% of the volumes of the exchange. So I'm saying the volumes will be muted.

But I think over the next one year, probably I think volumes will be back up again. We could see three, four tough months Right.

Govindraj Ethiraj: And last question. So you're currently holding your prices or the brokerage for your investors?

Ashish Nanda: I think the reason for you asking this question is that there is some increase by a few players in the market. So they've increased their brokerages, doubled the brokerage in a specific set of customers, the large customers who pay largely all their margins in non-cash collateral basis. At Kotak, we are not looking at any change.

I think what customers actually want from a broker is great features, stability of the platform and predictability of prices. We are not looking at any change in prices. We charge about 10 rupees a contract on FNO.

I think we want to continue with that. We are not contemplating any change at this moment.

Govindraj Ethiraj: Right. Ashish, thank you so much for joining me.

Ashish Nanda: Thank you, Govind. Real pleasure.