On Episode 972 of The Core Report, financial journalist Govindraj Ethiraj talks to Sheetal Sapale, Vice President at Pharmarack as well as Amar Sheth, Vice President of the Federation of Automobile Dealers Associations (FADA).

SHOW NOTES

(00:00) Stories of the Day

(01:32) Oil Prices Are Now Projected To Rise Higher, Leaving Markets In The Lurch

(03:20) India’s SmallCap Index Hits A 52 Week High

(05:20) Vehicle Sales Growth Is Being Powered By Rural India Now, Despite Poor Monsoons

(13:36) Why Anti-Obesity Drug Sales Are Slowing Down

(19:48) After EV, Now There Is EREV Or Gas Powered EVs

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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 8th of September and this is Govindraj Ethiraj broadcasting and streaming weekdays from Mumbai, India's financial capital

Our top stories and themes…

Oil prices now projected to rise higher leaving markets in the lurch.

India's small cap index hits a 52-week high.

Vehicle sales growth is now being powered by rural India despite poor monsoons.

Why anti-obesity drug sales are slowing down.

And after EV, that's electric vehicles, there is now EREV or extended range electric vehicles.

Markets, Nifty SmallCap, Oil and Gold

Oil could rally to $120 a barrel if attacks on shipping in the Middle East increase according to Goldman Sachs which has also recommended bets on natural gas and diesel as a way to capture gains. In addition to Goldman's so-called upside scenario of $120 it's also set a lower target of $80 should exports from the region normalise according to a Bloomberg report. Now the standoff after more than six months of war has boosted a wide array of energy prices with gains in natural gas and petroleum products outpacing crude oil says the Bloomberg report adding that industrial fuel diesel has more than doubled this year and that's something that we are seeing in several markets including the United States.

Crude oil prices have already risen to their highest since July as the stalemate over the state of Hormuz continues. With all of this as the background Indian stocks were down to their lowest levels in six weeks also pulled down by IT stocks as tensions in the Middle East continued and also rising expectations of a U.S. rate hike and that's something we discussed in some detail on Monday. The Sensex fell about 382 points to 76,132 and the Nifty 50 was down 118 points to 23,779.

In the broader markets the Nifty mid-cap was down 0.46 percent and the Nifty small cap rose 0.02. The Nifty and Sensex the benchmarks have already fallen 2.7 percent and 2.5 percent each over the past four weeks thanks to higher oil prices and global bond yields which have been rising. Brent crude futures were around $96.80 or just under $97 a barrel on Monday even as the United States and Iran fired at each other's vessels sailing in the state of Hormuz over the weekend and that could of course further disrupt energy supplies. The Nifty small cap index just to return to that hit a 52-week high of 21,174 up 0.42 percent of the national stock exchange on Monday's intraday trade according to a business standard report and in the past three months the small cap 500 has outperformed the market by rising 11 percent against a 3.4 percent rise in the Sensex.

Meanwhile the rupee saw sustained market intervention by the reserve bank of India even as there was a generally weak sentiment it closed at 94 rupees 48 paisa per dollar and the same level as Friday close. The rupee was mostly trading in a 10 paisa range and bankers told Reuters that there were consistent dollar sales from state-run banks mostly on behalf of the reserve bank of India which ramped up its forex intervention last week selling at least 8 billion dollars to bolster the rupee according to bankers who spoke to Reuters after a flood of dollar inflows 127 billion dollars to be precise has given the reserve bank more room to support the currency. The bankers estimated the reserve bank's market presence at between 8 and 15 billion dollars with sustained interventions helping lift the rupee to an over two-month high of 94 rupees 28 paisa on September the 3rd.

Gold prices are soft once again after a robust U.S. jobs report increased expectations of a Federal Reserve interest rate hike this month, which of course also depends on what U.S. President Donald Trump is saying or not saying in his public comments, particularly aimed at the Federal Reserve itself and its new governor, Kevin Warsh. Spot gold was at about $4,392 per ounce on Monday.

The Rise of Alternative Fuel Vehicles?

And prices are rising once again for cars. Maruti Suzuki, India's largest carmaker, said on Monday it will raise prices of select models by up to 20,000 rupees from September, and this would be its third hike since May thanks to continuing high costs. The carmaker's previous two hikes were across its portfolio, while the latest will apply only to select models, according to the company, and more on latest car sales in a moment.

Like The Core Report predicted and projected last month, alternative fuel car sales have overtaken petrol for the first time ever in the month of August, which is also another record month for the industry. Alternative fuels—that's CNG, hybrid, and electric combined—overtook petrol in the passenger vehicle market at about 42 percent against petrol's 40.8 or 41 percent. The Federation of Automobile Dealers Associations (or FADA) officials said on Monday that a little over a year ago, petrol led this contest by nearly 11 percentage points, and that lead has now been erased.

One reason for people switching away from petrol is obviously continuing concerns about blended ethanol fuel, or blended ethanol plus petrol fuel (or E20), which is causing some concerns on mileage and potential harm to some parts, particularly for older vehicles. More interestingly, FADA says that every other rural segment outgrew its urban counterpart: rural passenger vehicles were up almost 25 percent against urban's 11; rural commercial vehicles about 16; rural three-wheelers about 24 percent, even as urban three-wheelers fell.

FADA is arguing that this suggests that rural demand, in other words, has begun to decouple from the monsoon. The farm income-linked segment has softened, and yet the non-farm rural economy of livelihood, mobility, goods movement, and construction is accelerating. So for an industry long accustomed to reading rural India through the rainfall map, this is a structural change for the year, according to FADA.

Auto sales had, of course, their best month in August, just like we mentioned, touching about 2.4 million units, up 18 percent from the same period last year thanks to record August numbers for passenger vehicles, two-wheelers, three-wheelers, and commercial vehicles. Sales on a month-to-month basis have however fallen, with volumes down about 6.5 percent from a strong July. FADA emphasised that much of the year-on-year strength rests on a soft August 2025 base, when buyers had deferred purchases awaiting the GST 2.0 rate cut, which did of course happen, particularly for the small cars. And dealers report that the festive curtain raiser came in below their own expectations, so the true test of the season will lie in showroom conversion through September to November, according to FADA.

I reached out to Amar Sheth, Vice President of FADA, who also runs Shaman Motors in Mumbai, and I began by asking him what stood out in the latest month.

INTERVIEW TRANSCRIPT

Amar Sheth: So if we are looking at the rural growth for passenger vehicles, it's around a 25% versus an urban at a 10.9%. So it's two and a half times the growth that is coming in rural compared to urban. I think what's changing is that apart from the traditional income sources of agriculture or whatever, people are now in the rural belt also having multiple options to generate income. I think the world is changing, you can sit wherever and do whatever.

Plus government subsidies also, I believe are contributing a lot to the spends that they can do in a rural market. I guess, you know, people are now not very conservative in terms of even if they have the money, they won't splurge. So a car, especially a four-wheeler now is something that people require.

People are travelling, moving from one place to another. So they're spending money on all that. So I think change is also contributing.

Govindraj Ethiraj: The propensity to spend is much higher for rural and that's what's driving it. Yes. Right.

The other factor is, of course, the overtaking of petrol vehicles by alternates. The alternates have overtaken petrol. So alternates includes many categories from CNG to hybrids to electric, of course.

So what's the category within this that's doing better? And what's driving that?

Amar Sheth: So if we look at EVs, EVs are still around a 7-8% number, which has been inching up, of course, over the years. But for me, the number which I am actually quite impressed with is the CNG number, because that is a number that is, you know, something that is readily growing. And in spite of whatever is happening everywhere else, this is a segment which is increasing, especially in the western part of India.

And hybrids, of course, are there and more and more brands are launching them. So that is contributing too.

Govindraj Ethiraj: Right. And when you say CNG, are you referring to rising prices of CNG or? No, no.

Amar Sheth: I'm saying CNG as an alternative fuel source is also now, Kia just launched a CNG variant too. So there are manufacturers which earlier did not have CNG as an option, but now it has started coming in.

Govindraj Ethiraj: And these newer models with CNG fitted in are doing well at launch?

Amar Sheth: Yes, so CNG are now 25%. Like you asked the breakup of the segment, 25% is CNG, hybrid is at around 9%. And EV is say a 7.5%. So for me, the story actually is CNG, of course, EV is growing and hybrid is also being there. But people are going in for CNG too.

Govindraj Ethiraj: And the reason they go in for CNG is primarily cost, would you say? Yeah, totally. Okay.

Tell us about the data month on month. So year on year, obviously, the showing is pretty strong, but month on month things seem to have slowed down. I mean, how are you seeing those numbers?

Amar Sheth: Month on month, you're right. July was a much larger month than August. I think maybe a little bit of scepticism because of the little monsoon deficit or something like that could have crept into August.

But August also people maybe, in my view, traditionally, we have our festivals of Ganpati etc. in August, which this month is in September. So that might have pushed the purchase or the delivery to that date.

Because these numbers, as you know, reported are one registration number. So people would generally when they were taking the delivery, that's when it will get reported in. So we are at around a 6% negative compared to July or August.

Govindraj Ethiraj: Right. And what's the mood currently amongst customers who walk into showrooms, including yours? I know you're mostly in Mumbai, but what's the general sense?

I mean, what are they looking for? What are the kind of models that they're looking for? What are their preferences?

What's the kind of average value that they are willing to put down?

Amar Sheth: So the customer sentiment is still positive when they are walking into the showroom. Of course, they are coming with an open mind. They are enquiring about alternative fuel options too.

The traditional fuel is still getting sold. It's not that that is stopped. Loans, I think is something that the discussion always centres around because finance plays a large part in the purchase decision.

And this is the time actually from say August till post-Diwali, another 10 days post-Diwali is when the what we term it as our rest period. That's when the mood is good when people generally come in and make their purchase decision.

Govindraj Ethiraj: Right. And is there anything that's standing out for you in terms of, let's say, anything about consumer behaviour, particularly in the last couple of months that's sort of different or has stood out for you compared to the past?

Amar Sheth: Maybe a little cautious about the type of fuel that they are choosing. They are actively considering pre-owned vehicles now, which was also a little stigma maybe earlier, but people are currently looking at that too with a much more open mind. Structured financial products are something that has been, you know, lapped up by the customers where there is a bullet payment at the end or where their monthly EMI reduces.

So those type of innovations are finding flavour with the customer.

Govindraj Ethiraj: Got it. So inventory levels seem to have gone up a little bit. So what's driving that?

Amar Sheth: I would like to say that the dealers are stocking up for the bumper festival season ahead. I think manufacturing has, of course, it doesn't have on and off switch. So once you are in the production cycle, it will get produced and the manufacturer will send it to the dealer.

So from our FADA comfort zone of around 21 days, we are currently higher than that. I am expecting that at least after the festival season, we should come back to a 25-30 day period. Driving it is, of course, it will run down only once the retail happens.

So currently the dealers are well stocked to ensure that we are able to supply the variants that the customers want in the season. Got it.

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

Amar Sheth: My pleasure.

Slowdown in Growth of Anti-Obesity Drugs in India

Growth in the overall market for anti-obesity drugs in India is slowing down after a powerful start a few years ago. Within that, Eli Lilly's blockbuster weight-loss treatment Mounjaro holds the top slot, driving an expansion in GLP-1 therapies as patients trade daily pills for weekly injections. Mounjaro is now the single highest-grossing pharmaceutical brand in India, generating about 1,256 crore rupees on a Moving Annual Total basis. India's market for anti-obesity is at about 2,333 crores for the 12 months through August. Tirzepatide now commands about 62 percent, while Novo Nordisk's semaglutide holds about 34 percent. I reached out to Sheetal Sapale, Vice President at industry data tracking firm Pharmarack, and I began by asking her why sales in the anti-obesity space were slowing down.

INTERVIEW TRANSCRIPT

Sheetal Sapale: The anti-obesity market somewhere now is like, looks like you know, plateauing. The initial excitement that was seen when the generics were launched in the market and that surge in unit growth that was seen is now gradually plateauing. So probably the patients, the eligible patients who were not on the medication because of the pricing factors, most of them have got onboarded.

And that's the reason why we don't expect a significant jump happening in the coming months. Of course, now in generics, there are so many companies, there are close to 17 companies that operate in this market, close to 33 brands operating in this market. But then it's limited number of brands which will gradually become leaders or have a strong position in the market.

Pricing does play an important aspect, but not necessarily it's just the price because the patients have to be able to manage the side effects of these products.

Govindraj Ethiraj: So I can ask you for a little bit of a background, the market started opening up only a year or so or a little over a year ago. So tell us about what happened first and then what changed?

Sheetal Sapale: The GLP-1 agonists are there in the country for quite some time. It's not that they were launched just last year or something. What revolutionary had happened in January 2022 when Ribalcis, which is the oral semaglutide from Novo Nordisk was launched.

And I'm sure the company has done a lot of market priming doctor education because of which acceptance of oral semaglutide was good. Only drawback was oral semaglutide had to be taken orally and one tablet every day. But then with the launch of Mounjaro, which is Tirzipatide injections somewhere early in 2025, they were launched in March 2025.

Yeah, that changed the market dynamics because it was ease of dosage, ease of administration. And though it appeared to be a product for the rich or the affluent people, but then there was a lot of noise about these products globally. So rich and affluent people in India were already exposed and some were already importing the products.

Availability of this product into India actually increased the patient base. Doctors started writing and they had done a lot of scientific selling. And after that, somewhere in the month of July, semaglutide injectables, Novo Nordisk launched Vigovi, Ozempic.

So availability was good and the science behind these products was relatively strongly entrenched amongst the So that's the reason why people started discussing more about obesity, awareness about obesity, a lot of social media campaigns happened and that's the reason why the market opened up. Obviously, so much noise levels naturally started creating excitement in the Indian players who started launching their generics the moment semaglutide went off patent in March this year.

Govindraj Ethiraj: Right. So you're saying today there are 17 companies with 33 brands and that includes the original multinationals?

Sheetal Sapale: Yeah.

Govindraj Ethiraj: Right. And the value of anti-obesity drugs is still the highest or the most sold drugs in India right now?

Sheetal Sapale: No, it would not be the highest or most sold drugs. It's just that the value per unit is on a relatively higher side because it's injectable. And even if you say that the generic is available at an affordable rate, even a 1500 rupees cost per vial is still an expensive site.

If you look at Mounjaro, one injection would be available somewhere in the range of 26,000 to 27,000. So in terms of value per unit, it is on a relatively higher side. There are bigger markets than IGLP ones.

But then what is amazing is the way, the extent to which the market has grown in the last two years. All of a sudden, the market is almost two and a half thousand crores. So the market has really grown substantially in terms of value, in terms of units, it's still a smaller market.

Govindraj Ethiraj: Right. And when you say 2400 crores, that's for annually? For the last cumulative, for last 12 months.

Right. And what is the reason why the market is plateauing? The reason I'm asking this is because it was always expected that the Indian market is much larger given the incidence of obesity.

So what's your sense?

Sheetal Sapale: So market has started plateauing in the sense, see, when the injectables, before the semaglutide injectables were launched, generic injectables were launched in the market, the market consumption was somewhere around 23,000 on a monthly basis. All of a sudden, the injectables came into the market and more than 60,000 vials were sold in the month, in month one. Month two, it was 170,000 vials and month two, 192,000.

So this gap between 63,000 or 60,000 between 170,000, that was the pool of eligible patients who could not get onto these products because of the pricing aspect. Now, once the patients have onboarded, then it would be a gradual, slow patient onboarding growth that will happen. Now, the growth will not be exponential.

Govindraj Ethiraj: Right. But you're saying that from a larger challenge of obesity in India, there is still a need or an opportunity for the drug manufacturers to expand in this market?

Sheetal Sapale: Obesity is a cosmetic condition and taking obesity injections is a shortcut. There are many other ways to manage obesity and not necessarily all patients are eligible patients for GLP-1 agonist. Just because a medication is available, people can't take it.

So you may be vulnerable to certain risk factors which may be predisposed if you take GLP-1. You're not an eligible patient. So patient profiling becomes important.

Each and every obese patient can't take GLP-1 agonist.

Govindraj Ethiraj: Right. That's useful to know. Sheetal, thank you so much for joining me.

Sheetal Sapale: Thank you so much.

Is The EREV the Next Innovation for EVs?

The auto industry has a new solution to American fear that electric vehicles will run out of juice, and that's a gasoline engine. Hyundai, Ford Motor, and Jeep parent Stellantis are amongst the first U.S. market automakers planning to roll out a new kind called an extended-range electric vehicle (or an EREV), according to a Wall Street Journal report.

Now, the EREV is a fully electric car with the security blanket of a gas-powered generator to charge the battery if needed, so that you don't end up being stranded. Most plug-in hybrids on the road are essentially gasoline cars with a battery put in to provide a small amount of all-electric range, according to the Wall Street Journal report, which adds that EREVs flip the concept: they are designed first as electric vehicles, and the engine solely acts as a generator for the battery, with no mechanical connection to the wheels. EREVs also drive like EVs, including instant acceleration even when the battery is drawing from the generator.

The head of propulsion systems at Stellantis told the Wall Street Journal that this is simply a good answer, and Stellantis is hoping to kick off the EREV trend in the U.S. later this year or early next with its Jeep Grand Wagoneer SUV. A second range-extended vehicle, a pickup truck called the Ram 1500 REV, will come later, and that couples a large EV battery with a gas V6 to recharge it, promising up to 690 miles of driving—more than twice the typical EV in the U.S.

And in late August, Hyundai said that its next Santa Fe SUV will also offer an EREV version in 2027, and they said it will provide about 600 miles of driving. And after cancelling its money-losing electric F-150 Lightning truck last year, Ford says it will resurrect that truck as an EREV, according to that Wall Street Journal report.

Air India’s New CEO Give a talk To Employees

In his first address to employees, Air India's new incoming CEO Tewolde GebreMariam has said that Air India has a powerful heritage, strong brand, and enormous potential, and "if we do the right things at the right time, the sky is the limit," according to a Business Standard report that quoted him speaking to employees. GebreMariam's appointment was announced on the 5th of August, and he comes with nearly four decades of experience at Ethiopian Airlines Group, including as its CEO for over 11 years. GebreMariam said that he worked in Mumbai in the '90s, and at that time, Air India was at the top of the industry, and now he'll have the opportunity to make it a strong brand once again. He said that if we do the right things at the right time, the sky is the limit.