So What If Things Are Costlier? ??

NIFTY 50: 17,576 (+2%)

NIFTY 10Y Benchmark G-Sec Index: 2,011 (0%)

Greetings!

The week leading up to Diwali, coupled with various 2QFY23 results being released, has been filled with mild optimism, which comes as a breath of fresh air. In other news, as you may have already heard, Liz Truss resigned as Prime Minister and leader of the Conservative Party, making this the second PM to call “undibs” on the English economy this year. Let’s just head to the unrelated quiz.

Guess The Show: This show has aired throughout the premiership of all UK PMs since the beginning of the show in 1963, except for Liz Truss.

Scroll to the end of the newsletter for the answer!

What’s Up, Market?

Double Whammy? ??

Indian markets rose by 2% last week, despite the giant red flag with a “100% probability of a recession in the US next year” painted on it.

In 3 months, Indian markets rallied by 15% - can we consider this an UNO reverse on the market? Not yet

• Inflation is rising and inched higher to 7.4% in September 2022. This risk hasn't reduced being a risk for months now!
• Food inflation accounts for nearly 40% of the CPI basket, and this is what’s driving inflation higher. Prices of vegetables (+18%), spices (+17%), and cereals (12%) were all extremely high. This may put stress on consumption in the lower and middle-income groups.
• India’s IIP (Index for Industrial Production) declined by 0.8% in August 2022. Manufacturing was down 0.7% and could have taken a hit because of the reduction in export demand.
• A slowdown was seen in the production of primary goods, capital goods, consumer durables and consumer non-durables, making the contraction rather broad-based.

India seems to have faired better since we’ve grown a fair bit along with inflation. Yet, we stick to buying on dips due to current valuations.

?? To know more: https://www.rupeeting.com/post/double-whammy

Market Stories

Here's How Drinking More Pepsi Can Make You Money ??

A 350ml can of your favourite soft drink (or mixer) has 40g of sugar in it. For context, that’s more than 10 teaspoons! Not like anyone cares since people still drink it regardless. Wouldn’t you want to make some money off of it in the bargain?

Pepsi, Mountain Dew, Seven-Up, Mirinda Orange, Sting, Tropicana, Gatorade, Evervess and Aquafina bottled water - what’s common between these?

Varun Beverages Limited is responsible for these household names, a critical player in the beverage market and the largest PepsiCo franchisee (outside the USA).

In a simple and symbiotic relationship, Pepsi and VBL benefit from the growth of each other, wherein Pepsi owns the trademark, provides the concentrates of the drinks, and invests in R&D, while VBL takes care of manufacturing, selling and marketing.

Here is why we think VBL will do well:

• India’s per capita consumption of soft drinks is just a tenth of that in developed markets. As India moves higher on the development scale, more people will consume more packaged beverages
• VBL has taken into account the growing awareness of the harm that carbonated drinks can cause, and has seen much higher growth in non-carbonated drinks (juices and dairy products) than carbonated drinks
• VBL accounts for ~85% of PepsiCo’s beverage sales in India and is present in 27 states and 7 UTs. It sold 45 crore cases in India in 2021. FYI, 1 case is equal to 5.678 litres of beverage divided into 24 bottles of ~237 ml each. Do the math!
• Over the last 5 years, VBL’s sales volume has gone up at a 20% CAGR, and this has no reason to slow down going forward
• VBL has a distribution network of 3 million outlets and has built its vast network up over the last two decades

More evidence of why they are worth adding to your portfolio is available in the link below. In fact, we already added them to our Socially Responsible Investing portfolio in June 2022, and since then the stock is up 30%! Crack open a can and get cracking on your portfolio!

?? To know more: https://www.rupeeting.com/post/here-s-how-drinking-more-pepsi-can-make-you-money

Personal Finance

What Exactly Is a Credit Score? ??

You hear the word floating around a lot, but what is a credit score? It is an indication of a person’s creditworthiness, or ability to repay debt. It is usually expressed as a number based on the person’s repayment history and credit files across different loan types and credit institutions.

Unfortunately, this score also matters, just like our 10th boards did.

CIBIL is the most widely used rating in India, with a range of 300-900, 900 being exceptional.

How is it calculated?

• Payment history accounts for 35% of this score and measures your ability to pay bills on time. If you delay payments, it affects your score adversely
• Debt from loans and credit cards accounts for 30%. If you have large amounts in unpaid loans and use your credit card to the maximum limit, you get a lower score
• Duration of credit history accounts for 15% and showcases your track record of having debt and paying it off. This doesn’t mean you take up a loan or credit card just to have a longer track record
• The number of credit products accounts for 10%. Having a wide range of products (assuming you can pay them off on time) can improve your score
• Recent credit activity accounts for the final 10%, involving opening new accounts, applying for credit, making payments, applying for loans, and using the credit you already have

Now, how do you check your score?

1. Visit https: cibil.com
2. Click on ‘get your credit score’ or ‘check my CIBIL score.’
3. Pick the desired subscription plan.
4. Please fill in the details for identity proof.
5. Click on ‘Proceed to payment’ and process the payment.
6. Get the CIBIL score and report in your email.

Having a higher score can make you eligible for loans with lower interest, credit cards with higher limits and perks, and a number for you to flex to that teacher who didn’t believe in you since you failed that math test.

All you need to do is pay your bills and debt on time, don’t take up too many credit cards and loans, and you’re sorted!

?? To know more: https://www.rupeeting.com/post/what-exactly-is-a-credit-score

Chart of The Week

So What If Things Are Costlier? ??

Although we sound like that South Bombay friend from every college group, the numbers seem to indicate that Indian consumption hasn’t taken a back seat, even though inflation has been the main character lately.

• The consumer sentiment index (measures optimism of consumers in the market) rose by 7.1% in September 2022, just before the festive season, to a 30-month high!
• The latest CMIE Consumer Pyramids Household Survey found that the percentage of families who were likely to purchase consumer durables rose sharply to 16.2% in September 2022, from 10.9% in August 2022
• Consumer expectations increased in both urban and rural areas, although the raise in urban areas was significantly higher. In comparison to urban areas, people in rural India are much less bullish on their earning prospects for the coming year
• Consumers were much more likely to spend money on consumer durables. Almost a quarter of all families felt that now was a better time to acquire consumer durables than it had been the previous year. This is very promising for the ensuing festival season

Inflation or not, people are buying anyway!

?? To know more: https://www.rupeeting.com/post/so-what-if-things-are-costlier

Answer: Doctor Who

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