The Key to success is focus on goals, not obstacles.
All said and done, Indian economy is full of opportunities, a 7% GDP growth rate for
the sixth biggest economy in the world is no small feat. We have all the key ingredients
needed for sustained growth compounding significant size, strong growth rate and
importantly a prolonged period of time during which this growth will sustain, driven by
our young demographics.
The year that passed by was a very challenging and eventful. Reforms introduced by the
Government will continue and we expect few more structural strengthening initiatives from
the government which may construe as Disruptions. However Disruptions pave way for
creation and offers new opportunities, we often forget that this opportunity will have its
fair share of challenges, uncertainty and risks. Often, these are very transitory, while
sometimes they may last for a long time. However, eventually things get ease out. In fact,
our hypothesis with India has been that a dislocation that lasts about four to five
quarters happens every four to five years. And we have seen that play out as well. An
analysis of the last 90-odd quarters showed around 10-12 significant ‘crises' in the
market. Despite these dislocations, the long-term growth trajectory for India continues to
hold steady. So while at any point of time, India might not be a good picture to watch, in
the long-term, it is definitely a great movie to see!
The second half of FY19 and the ensuing market dislocation must be seen in a similar
context. Eight months on, while borrowing costs continue to be higher than normal, the
borrowing tap is slowly hopping back to normalcy. We do expect the marginal slowdown and
elevated borrowing costs to continue for a quarter or two, consistent with our hypothesis
of four to five quarters of slowdown. In such a backdrop, our focus in the year was on
further reduction of debt and monetization of our assets, which we believe will lead to
eschewed growth in favour of building strength and stability
Long-Term Outlook
The current slowdown is nowhere a reflection of India's long-term potential, which
continues to be very optimistic. The greatest challenge during such a slow phase is not
just figuring out ways to ease the pain of the slowdown but also having the faith and
gumption to trust in the long-term.
We remain committed to creating long-term value for all our stakeholders, many thanks
for all your support, feedback and kind words.
Warm regards,
Rakeshkumar Wadhawan
Executive Chairman
HDIL