Food Delivery And Quick Commerce Flavour Of The Year: Ankur Rudra Of JP Morgan
"Quick commerce is significantly disruptive digitization change in consumer behaviour," said Rudra.
Ankur Rudra, Head of JP Morgan's APAC Telecoms team and lead analyst for India TMT, said that one of the positive surprises in the IT sector this year was the spending in the banking space on tech.
"Investment banking and corporate banking space have seen a year over year improvement in tech spending," Rudra told NDTV Profit on the sidelines of JP Morgan's India Investor Summit.
Rudra said that he sees more confidence in recovery of spending in the financial services space, especially in the US. However, beyond US, trends in the sector are mixed.
According to him, the second biggest sector is the telecommunications and media space. "This sector has not seen much of recovery yet. Parts of healthcare, travel and autos however have been doing well," said Rudra.
The analyst also said that the industry is now in the ninth quarter of slowdown in discretionary spending, adding that JP Morgan expects rate cuts this year and next year and hence, there could be room for pickup in discretionary spending.
Talking about engineering, research and development (ERnD) space, he says that this is a big and fragmented segment and is underpenetrated. "The growth for small companies does not come at the cost of big companies and there's room for growth for all," stated Rudra, adding that auto focused ERnD companies have been consistently doing well. However, companies which are more diversified have struggled to an extent.
On The Internet Space
Rudra believes that "food delivery and quick commerce has been the flavor of the year".
He likes companies that have established market leadership, proved profitability and business model.
"Quick commerce is significantly disruptive digitization change in consumer behaviour. There is generational change in quick commerce. Indian growth potential for many of consumer internet businesses is becoming better."
On The Telecom Space
The analyst said he had never assumed the AGR case in favor of telecom companies. He added that the government has been very supportive to telecom companies.
Talking about the subscriber churn, Rudra stated that it hit the players who took a tariff hike -- Airtel, Jio and Vodafone. While, those who did not go for a tariff hike, such as BSNL, benefited from it, he said.
He believes that the quality of network by private telco companies is very high compared to the public players.
According to Rudra, India is in a "tariff repair cycle" and a tariff hike could come in late next year.
The analyst likes India telcos because he believes that the capex intensity is now behind for most companies and with tariff hikes, revenue and Ebitda will keep rising.
