On Episode 910 of The Core Report, financial journalist Govindraj Ethiraj talks to Jitendra Gohil, CIO - Listed Equities at Bajaj Alternate Investment Management Limited as well as Soumya Mohanty, MD & Chief Client & Solutions Officer, South Asia at Kantar.

SHOW NOTES

(00:00) Stories of the Day

(01:00) Oil Prices Fall Below Pre War Levels As Optimism Rises

(05:43) How South Korean Supertankers Are Ruling The Persian Gulf

(07:03) India Is Using More Domestic Coal Instead Of Imported

(08:15) Shaping Market Strategies Based On Geopolitical Moves

(18:49) India’s Most Creatively Effective Brands Include Oldies Taj Mahal Tea And Tata Salt

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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 Thursday, the 25th of June, and this is Govindraj Ethiraj broadcasting and streaming weekdays from Mumbai, India's financial capital, our top stories and themes. And a quick reminder, we will not have a news edition on Friday, being a market holiday, but we will have something for you to chew on.

And now…

Oil prices have fallen below pre-war levels, even as optimism rises, including in the markets.

How South Korean supertankers are ruling the Persian Gulf

Shaping market strategies based on geopolitical moves.

India's most creatively effective brands include Old East Taj Mahal D and Tata Salt.

India is using more domestic coal instead of imported.

Markets, The Dollar, Monsoons and Heatwaves

Oil prices are falling and the markets are trending upwards. In a few days, if there are no major surprises in the Iran-US talks, the focus will and should turn back to the domestic economy and some of the underlying concerns prevalent, not just before the West Asia War started by the United States and Israel, but before the tariff war started by the United States in April 2025 or more than a year ago. So we have to pick it up there, which we will.

For now, oil prices fell further on Wednesday, lifting Indian markets as well as concerns over potential supply disruptions eased off. Brent crude oil prices fell to the lowest in nearly four months, on signs that more oil tankers are set to moor out of the state of Hormuz and more on oil tankers in a moment. A Bloomberg reading was actually showing Brent crude just below $75 a barrel, that's below $75 a barrel on Wednesday.

Brent earlier touched a low of $75.37, its weakest level since February 27th, the day before the start of the US-Israeli strikes on Iran. West Texas intermediate crude was as low as $71.55, the weakest since the 3rd of March. So much so that US President Donald Trump on Wednesday criticised oil companies for not lowering their oil prices at the pump or gasoline prices in line with the recent decline in crude prices, according to CNBC.

And back home, the markets did a big turnaround during the day, rising sharply to recover some of their losses, and the Nifty 50 was up 197 points to 24,021, and the Sensex was up 790 points to close at 76,991. In the broader markets, the Nifty mid-cap and small-cap were also up 0.1 and 0.4% each. On Wall Street, technology stocks were also up on Wednesday morning, but there has been a lot of choppy trading.

On Tuesday, the markets were weak on Wall Street after technology stocks continued a global sell-off that began in Asia. But more importantly, US treasury yields fell on Wednesday after crude oil prices fell to levels not seen before at the start of the US-Iran war. The yield on the 10-year US treasury note, which is the key benchmark for US government borrowing, declined more than 3 basis points to 4.45%, according to CNBC.

Meanwhile, S&P Global Ratings on Wednesday said energy stress, subpar monsoons, and slowing global growth will bring India's GDP growth to 6.6% in the current year. It was 7.7% in the previous year. S&P said in a report quoted by Business Standard that they projected real GDP growth will slow to 6.6% in the fiscal year ending March 27 amidst the energy stress expectations of a subpar monsoon and slowing global growth.

S&P's 2627 growth projection is in line with the Reserve Bank of India's estimate, which is also 6.6%. Speaking of which, the Reserve Bank of India Governor Sanjay Malhotra told ET Now that it was premature to discuss rate hikes as the central bank did not yet see signs of inflation becoming broad-based. Meanwhile, Agriculture Minister Shivraj Singh Chauhan said on Tuesday that India has drawn up contingency plans for more than 300 districts which are vulnerable to a weak monsoon as it steps up preparations for the summer-sown season to minimise the impact on crops. The monsoon has been at about 43% below average and the India Meteorological Department or IMD has forecast weak rains through the week ending July 2, according to Mr Chauhan, who spoke to reporters after chairing a meeting with state farm ministers, officials, and scientists, according to the Reuters report.

Onwards to currencies, the US dollar is staying strong and has been the strongest in over a year against many major rivals, including the euro and the yen, according to a Reuters report. It is also at multi-year peaks against many emerging market currencies. South Korea's won hit a 17-year low earlier this month, according to that report, which is all worth keeping in mind as we look at other currencies, including the rupee.

Speaking of which, the rupee was up 11 paise to close at about Rs 94.65 on Wednesday against the US dollar, all of which is following the fall in crude oil prices. Meanwhile, the rains are here, including in Mumbai. And if you recall, we were talking about heatwaves in India or across India just a few weeks ago, and now there is a record-breaking European heatwave, which has caused a major power outage in France, even as several countries have issued red alerts across many parts of their territory.

A heat-related incident left about 68,000 homes without electricity in western France, according to local officials quoted by CNBC.

What is the workaround for a Shortage of Ships in the Persian Gulf?

An interesting report from Bloomberg has pointed out that one of the world's biggest operators of supertankers has provisionally booked a vessel to transport oil from the Persian Gulf to India at nearly nine times benchmark rates, a price that reflects the shortage of ships in that area. It's also interesting to note where the ship hails from, which is South Korea, and not what you would imagine, like a Danish or Chinese shipping company.

South Korean shipowner Sinokor will supply the vessel at 897 world-scale points, or 897% of the freight benchmark, according to shipbrokers quoted by Bloomberg. This fee ranks as the highest so far this year, they told Bloomberg. Sinokor has apparently been amongst the more active players in the Persian Gulf through the war and has continued to market its fleet.

Sinokor indicated it would pass through the Strait of Hormuz with the cargo, a sign of confidence in continued flows through the Strait even as traffic remains constrained. The Bloomberg report also says that many shipowners have begun repositioning their vessels and some have already begun to redirect their tankers to the Gulf, with around 65 empty Very Large Crude Carriers, or VLCCs, now able to reach the Gulf of Oman within a week, of which 25 are owned by Sinokor, according to those estimates.

Can India Utilise its Domestic Coal Better?

Efforts are on, of course, to reduce dependence on imports, particularly of energy sources. We may have little choice when it comes to crude oil, but for sources like coal, we do. India is increasing the use of domestic fuel to more than 50% at power plants designed to run on imported coal, as India, who is also the world's second-largest thermal coal importer, tries to curb costly overseas purchases, according to a Reuters report. India actually has consistently tried to reduce coal imports for power generation, but that's been tough because imported coal-based plants were designed for higher-grade fuel and have struggled to process lower-quality domestic coal supplies, according to that Reuters report.

India is already using domestic coal for operating 5.7 gigawatts capacity so far this year, of the total 18.7 gigawatt capacity at imported coal-based power plants, according to that report. Coal comes from Indonesia, South Africa, and Russia, amongst others, and higher power generation from renewable sources like solar is obviously freeing up domestic fuel supplies, allowing more local coal to be diverted to coastal plants that were built to run on imports, according to that Reuters report.

What is Bajaj Alts new PMS?

Finding new investment themes in a market weighed down by heavy macroeconomic signals and pressures is tough, and we will touch on this in subsequent episodes too.

I spoke with Jitendra Gohil, now Chief Investment Officer, Listed Equities at Bajaj Alternate Investment Management Limited, also a Credit Suisse research veteran. Bajaj ALTS, as it's called, manages funds across real estate, private equity, listed equity, and quants, and sits under Bajaj FinServ, all part of the auto-to-finance conglomerate. I began by asking Gohil, who is launching a PMS, or a Portfolio Management Scheme, right now, and Alternate Investment Funds later, what or how he was designing his investment strategies.

INTERVIEW TRANSCRIPT

Jitendra Gohil: See, regarding oil, we have been extremely bearish. We think that U.S. cannot afford to see oil going to 150 or 200. The Iran-U.S. war was, first of all, is not that what U.S. actually wanted, right? So, if you look at the debt situation in U.S. is so fragile, that is going to go to almost like 140% of GDP in the next 3-4 years. And the interest cost is also rising. 10-year yield is at around 4.5. Their interest cost is extremely unsustainable in my view. If U.S. yield has to rise to 5%, it will be extremely tough for the U.S. to repay that kind of debt. So, I think it's all planned that look, oil is going to come down. And we have seen already the Venezuelan oil is now getting controlled by U.S. Iran, they have said that, okay, Iran can sell oil in dollar. Now, this was not anyone's forecast. So, from demand supply side, I think oil is going to remain in oversupply situation. So, I think this is an extremely positive situation.

So, when the war started, we said that this is very difficult time for India, at least for the next 3-4 months. But from a long-term perspective, I think it's going to benefit India because this will lead to more supply of oil coming to the market. So, immediately, I don't see that oil prices will fall because the infrastructure got damaged, so 6-9 months it will take.

From a longer-term perspective, I think there's a big reset happening in the oil market, where oil prices will remain benign, and probably it will fall further compared to before the war kind of situation.

Govindraj Ethiraj: Right. And speaking of resets, I mean, how are you seeing the Indian markets? You know, the last year has been quite turbulent, beginning with the announcement of tariffs on India, which was hiked further and then pulled back, and then leading to the war.

So, what is this meant sectorally? Do you think that there will be some overhauls, shifts as we look ahead?

Jitendra Gohil: See, post-Covid, I think India had this TINA effect, right? There's no alternative but to invest in India. India was the darling of global markets, right?

Rupee was extremely stable, RBI was controlling liquidity, we did not see significant deterioration in Indian banking sector, RBI was very proactive, everything was going right for India. But suddenly then, we saw this AI boom came in. And see, after independence, if you see, India was never leading in technology.

Our R&D to GDP show, research and development expense is hardly 0.5 to 0.6% of GDP, while US spends almost more than 3%. So, India can never lead AI boom. And India is also not an ally of the US, right?

Especially if you see that all these countries which actually piggyback on US, for example, Japan, South Korea, Taiwan, they all were actually having very strong relation with US. But with India, I think, it's yes and no, quad did not work out the way US wanted. So, US does not trust India to give so much of technological support, right?

And operations endure after that also we saw that did not lead to any betterment of relations with US, right? So, net-net, I think, we are starved of technology. And I think that's why market views India as a vulnerable market, where other economies were able to grow very fast.

In fact, the earnings growth in Korea is around 100%. Next year, it is expected to be 30%. While Indian, you know, nifty earnings is between 8 to 10%.

So, you know, after significant outperformance by Indian equities, I would say that this is just a blip, because I'm extremely positive in terms of India's macro resilience. Post COVID, the kind of resilience Indian equity has shown right from Russia-Ukraine war to tariff tensions, and now this Iran and US issue. But India continued to surprise on the upside in terms of GDP growth, right?

So, all the economies are expecting somewhere 6, 6.5%. But India every year, it keeps on surprising. Like last quarter, we saw 7.8% GDP growth. So, net-net, I feel that this is just a blip, you know, probably we'll see flattish growth in nifty for another one year or so.

But the broader market, I think it's going to lead to significant traction, because India is actually changing its regime. So, I would say, India is going through a significant change in the way it used to operate. And in the next 10 years, India's situation is going to be completely different.

So, I will not rate India just from, you know, looking at nifty or the large caps, but real action is happening, unlisted space and also micro and small cap space.

Govindraj Ethiraj: Right. And I'm sure those are some of the areas that you're looking for. So, to come back to my question.

So, are you saying that while we've benefited from the post-COVID tailwind, which is now, of course, fading, there are no real sort of winners and losers from the last couple of years, and everyone is somewhat coasting or sailing through?

Jitendra Gohil: No, I think see winners and losers, if you ask me in terms of growth, obviously, those countries that have, you know, piggybacked on US AI spending has done phenomenally well. But just to give you some perspective. So, this year, all the magnificent seven, all these hyperscalers are going to spend somewhere close to $700 billion.

Next year, the expectation is $850 billion. It's going to accelerate. And I think it can touch even $900 trillion to $1 trillion because the chip prices and inflation is much higher.

Last year, they probably have spent somewhere around $600 billion. So, if you just sum it up, three years, total spending is going to be $2 trillion plus. Just to expect a 10% ROE also on this return.

So, I think you need $200 billion of net profit, which I think it's somewhere showing that too much spending has been done without consideration of returns. And also, one company's investment is other company's revenue. So, there is definitely a kind of risk that has built up.

And just to give you perspective, this $1 trillion market cap IPOs that we're talking about, like SpaceX and OpenAI and Entropic, total market cap could be somewhere around $4 trillion. And they employ almost 18 to 20,000 employees, that's it. So, there's definitely few companies that are pulling up.

And in that bargain, I think Korea, Taiwan, to some extent, Japan has piggybacked on these kind of CAPEX. But what if this CAPEX does not materialise? If the yield starts to go higher from here in US, even their cash flow is not sufficient.

So, right now, we are in a situation where these hyperscalers are actually raising capital, whether it's equity or debt capital, because now the cash flow is not sufficient. So, if there is a CAPEX cliff that happens, then these winners will actually become major draggers in terms of your portfolio.

Govindraj Ethiraj: And how does this affect Indian markets or India?

Jitendra Gohil: So, India, for example, so India is not going to lead on AI. India is actually going to consume AI. So, once this CAPEX, once this technology is built, probably India will benefit from implementation of these tools.

For example, once the KYC rules were eased, once we have this technology to do KYC, you see new businesses got created. For example, Zero, all these working platforms that mushroomed. Similarly, if we use this technology, our need for educating our far off places in Bihar, UP and all, that will get resolved.

Real estate, for example, you can speed up the project implementation by 20% or so, that will have a significant impact on the sector overall. So, India is going to consume this AI. Gradually, we see that whenever we see benefit of technology coming to India, India has seen a faster growth.

And the second thing people keep asking me is on the IT sector.

Govindraj Ethiraj: That was my question, really. I mean, will IT sort of permanently lose its right of place?

Jitendra Gohil: So, what is happening right now is IT employs almost 60 lakh people. IT is mostly outsourcing your services. But the other segment which is picking up faster than the IT sector is the GCCs.

So today, IT employs 60 lakh people. GCCs employ almost 19 to 20 lakh people. While IT sector's entry level salary probably is around three and a half to four lakhs.

GCC's entry level salary is between four to six lakhs. And GCCs are growing double or triple the pace of IT employment. So, almost 10 to 15% growth in headcounts are happening in GCCs.

So, on the one side, IT is going to lose the steam. Probably, they will not hire much or I don't expect a major loss in headcounts in IT. But it will be more than compensated by the growth in GCCs.

Now, what do we exactly mind GCC is that the company which wants to set up business in India, they will hire talent in-house instead of giving that to the outsourcing company like IT. So, neck-net, probably the IT sector will have to revamp themselves. Probably, I will be neutral to negative in the sector in the near term.

But from an economic perspective, I think the growth in GCCs will more than offset what we are going to lose from the IT sector.

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

Jitendra Gohil: Thank you very much. I appreciate.

How Successful is India Inc?

The latest Axis Bank and Burgundy private Hurun India 500 report has revealed that India inc has crossed $3.4 trillion in value, with 500 companies collectively matching the scale of major global economies. Technology service giants, more interestingly, that once dominated wealth creation, have given way to telecom, financial services, defence manufacturing, renewable energy, consumer brands, and even professional sports franchises. Cricket has officially entered India's corporate mainstream.

In a first, five IPL franchises have made it to the Hurun India 500, highlighting the transformation of sports teams into billion-dollar businesses, according to a report in the Business Standard.

What are the most Effective Advertising Campaigns in India?

Hindustan Unilever's Taj Mahal Tea, Tata Consumer Products, Tata Salt, and Chola Yields' Medimix Soap have topped the most creative brands in Kantar's Creative Effectiveness Awards for 2026. Kantar is a leading global marketing, data, and analytics company, and it says that the most effective advertising in India is deeply rooted in local realities and brought to life through compelling storytelling.

The strongest campaigns, it says, are built on familiar human truths, locally grounded insights, culturally resonant emotions, and real-life tensions. This year, 10 campaigns were recognised around four categories, Hindi-speaking markets, non-Hindi-speaking markets, digital, and Bharat Connect, which highlights advertising successfully connecting both urban and rural audiences. The report also said that creator content impact has increased by 77%, making it an influential touchpoint, though despite its rising influence, only 27% of creator content effectively links back to the brand, revealing a significant gap, the report says, between reach and effectiveness.

Kantar also says strong brand integration can nearly double the impact of creator content, significantly improving brand equity outcomes. I spoke with Soumya Mohanty, Managing Director, Chief Solutions Officer, South Asia for Kantar, and I began by asking her what this year's winning campaigns reflected.

INTERVIEW TRANSCRIPT

Soumya Mohanty: Creative Effectiveness Award is something that we do globally and in APAC and India and in India this is the fifth edition. So we have been doing it for quite a few years now. So what it means is that Kantar has a proprietary pre-testing framework called LINQ which we use to pre-test advertising.

So normally over the course of the year we test at least a thousand ads. This award celebrates the best of those. So that's what it is and the way we measure or judge ads, actually both the parameters are objective.

So there are two broad buckets. One is short-term sales effectiveness which means that is this ad something that's going to persuade you to buy the brand or the category depending on the category's purchase cycle and the second is long-term brand equity. Does this build branded memories in your mind that will the next time you want to think about the category lead you to considering the brand.

These are the broad measures on which advertising is getting judged and then we celebrate. I don't like the word awards but let's put it this way we celebrate the best of the best that we have tested.

Govindraj Ethiraj: If I look at the 10 ads that have won this year almost all of them or maybe nine of ten at least are maybe several decades old. Whether it's a Taj Mahal, Tata Salt, KitKat, Cadbury, Dettol, Lux, Wheel, McDowell. What does that suggest?

Soumya Mohanty: Well that suggests that they believe in the science of creativity not just the art of creativity. So they do tend to they have a discipline of creative excellence they tend to test their advertising more they tend to therefore they have a playbook of what tends to appeal what tends to work which newer brands obviously don't have to that extent and that's all that it suggests. So yeah legacy brands tend to dominate but we do have new brands and Medimix has featured for the first time, we have Dextro.

So we do have new brands coming in but mostly I guess you know new brands, startup brands, B2C brands seem to believe that they don't need the science. They don't need to understand what works through this process.

Govindraj Ethiraj: So you're saying that newer brands have not cracked the code as yet or?

Soumya Mohanty: We award those who have tested their advertising. If you have not tested your advertising you will not get awards. Every year we get about 20-25 percent new brands that start the journey of testing advertising because there's a generic belief that advertising cannot be tested.

You cannot put creativity through a scientific framework that leads to because link is a validated framework that leads to in-market performance. So there's a general belief. Some brands, large brands have belief in it.

They have for years believed in it. The smaller brands every year we get newer and newer brands and the general belief is I know what's going to work. So people don't test.

If you don't test you will not be a part of our list of awards. You may be a part of some other list of awards.

Govindraj Ethiraj: Okay so there could be brands who are spending let's say big money at IPL or World Cup right now who may not be part of your pre-test lineup?

Soumya Mohanty: IPL big money I think most of it would go through. So we have just over 1300 ads last year and a lot of it So most big ads thematic ads etc do go through but there are enough that don't test. There are enough where money is getting spent without any consumer feedback because our testing is consumer feedback based.

So there is a lot that happens without any consumer feedback.

Govindraj Ethiraj: Got it. So in general how are ads landing between let's say television, digital, broadly or print and where is the effectiveness the most right now?

Soumya Mohanty: I would say every channel has a role to play and that's in fact channel synergies is what we are seeing is increasing which means television has a certain role which is a lot more top of the funnel. Digital is still a lot more mid and bottom funnel. It's when they work in conjunction and print still has a role by the way.

People tend to believe it doesn't but print has a role in trust credibility and certain categories high involvement categories print still has a role to play. But TV and digital are not either and or. There are still audiences you are not going to fully reach through digital and there are audiences that are not fully engaged on digital either.

So it has to be synergistic. I think that is where things may be falling through the cracks.

Govindraj Ethiraj: Right and as you look ahead what would you think or how do you think brands are changing the message within the message? So let's say it's Taj Mahal, it's Tata Salt, KitKat and so on how have the creatives changed and how will they change or are they likely to change which also would reflect the way the brands are maturing or evolving?

Soumya Mohanty: So I think the big idea remains the same for all good solid brands which have built strong memory structures in the consumer's mind the big idea remains relatively consistent. What changes is how I adapt to the changing culture. How do I land?

If KitKat is about give me a break that the destination of break and what I'm taking break for has changed. It started with like physical labour but obviously that's not relevant so it's the stuff that they have done recently that is one thing that has evolved. The other thing is how do I render it across platforms?

So how do I create not just the big television ad but how do I take that idea and I create content snackable content online? How do I use influencers to land the same idea? KitKat did it by the way they showed influencers taking a break and the second big thing how they're evolving is I think keeping abreast of culture.

The wheel ad that has won in our thing which is about reels it's about the cultural aspirations of the social media influencers to create reels. Now that's a brand new idea but what the wheels roll in it still remains the same. I think they are evolving.

I would really love to see a lot more newer brands embracing this part of legacy brands which is how do I create strong branded memories.

Govindraj Ethiraj: Right I think you alluded to it what's the role of creators in all of this or the creator ecosystem?

Soumya Mohanty: I think they have a significant role because creators are what create what we call fast culture. The brand has to remain anchored on slow culture. I have to stand for something but creators will help you keep abreast of culture.

They create the memes, the virality etc. So there's huge role. The challenge is when I'm using so many creators how do I ensure what I'm landing as a message has got a connecting thread.

I don't think that code has been cracked. We are launching a science-backed solution for it but finally we can only tell people to sort of talk to consumers in a certain way. Beyond that it's about how the playbook is adopted by the advertising and marketing community.

Govindraj Ethiraj: Got it. Soumya thank you so much for joining me.

Soumya Mohanty: Thank you.