India Inflation Update –January 2023

20 Feb 2023

The January CPI inflation print came in at 6.52%, which is higher than Citi analysts' estimate of 6.2% and the consensus of 6%. The CPI upside surprise was led by higher-than-expected growth in food inflation. Vegetable prices continue to fall, but not as much as historical trends. CPI ex-vegetables increased by 50 basis points to 7.8% year on year in January 2023. This is the highest growth since mid-2014. Given that cereal and core inflation remain sticky, Citi analysts revise their headline inflation forecast up by 60 bps to 6.2% for 4QFY23 and 5.1% for FY24 (+20 bps). CPI print at 6.52% in January, and 6.4 to 6.5% likely in February 2023, raises the prospect of a 25-bps rate hike at the April MPC meeting. 

Continue Reading

RBI monetary policy Feb 2023

13 Feb 2023

In Feb 2023 the RBI MPC hiked repo rate by 25 BPS, keeping the “withdrawal of accommodation” stance unchanged. Given the RBI's forecast that headline CPI May not likely fall below 5% for the entire fiscal year 2024 (higher than Citi analysts' forecast), Citi's base case expectation is another 25-basis point rate hike in April 2023. ; 10-year bond yields are likely to be contained around 7.40% -45%

Continue Reading

India Equity Strategy

06 Feb 2023

47 companies have reported earnings so far, with EBITDA and earnings at 8% and 4%, respectively, which is better than the estimates. Autos have fared better than the estimate and a modest beast across most other sectors. The earnings of 27 Nifty companies are up 13% year over year, 8% higher than the consensus. While the valuations have cooled off, they remain near +1 SD above long-term averages. Citi analysts retain their Dec’23 Nifty target of 18300.

Continue Reading

Budget FY2024: Delivers a pro- growth road map anchored on Policy Continuity, Fiscal prudence and pump up in Capex

02 Feb 2023

Indian Finance Minister Nirmala Sitharaman presented the Union Budget for fiscal year 2023-24 on 1st February 2023.The FY24 Budget delivers strongly on Fiscal consolidation (deficit at 5.9% of GDP in FY24BE vs 6.4% in FY23RE), refraining from populism in a pre-election year and a continued emphasis on Capex.

Continue Reading

Unexpected Turnaround in States Fiscal Health – Boon or Bane?

30 Jan 2023

Lower than expected spending and borrowing by state governments have confused the market in FY 23, and Citi analysts now estimate the FY 23 state fiscal deficit at 2.3% of GDP, as opposed to the budgeted estimate of 3.4%

Continue Reading

India Equity Strategy: 3Q Preview: Weak Growth; Mild Margin Recovery

16 Jan 2023

Citi analysts expect overall 3Q earnings growth of 6% YoY. Earnings in commodity sectors are expected to be low, but this should be offset by strong financial sector growth. Given softening input prices, Citi analysts expect an improvement in gross margin, but the impact on EBDITA margin will be lower on account of weak growth and higher operational expenses. Earnings revision risks are skewed to the downside, and the valuations remain relatively high (now at a 5-year average on an absolute basis). We keep our Dec’23 Nifty target at 18300.

Continue Reading

The November CPI Surprise, Creates a Difficult Monetary Policy Dilemma

19 Dec 2022

In November, India's headline CPI was down to 5.88% YY as against the consensus of 6.4%. The fall in inflation is largely attributed to a fall in vegetable prices. The core inflation broadly remained stable at 6% YY. Citi analysts revised the 3QFY23 and 4QFY23 headline inflation forecasts to 6.2% YY (vs. 6.6% earlier) and 5.6% YY (vs. 5.9% earlier). Given the disappointing the IP no at (-4%) YOY in Oct’22, MPC may be forced to review the growth-inflation trade off, in our base case we expect 25 BPS hike in Feb 2023, with neutral stance.

Continue Reading

India’s Q2FY23 GDP – Moderating Growth

13 Dec 2022

India’s Real GDP grew by 6.3%YY in 2QFY23 vs. 13.5% in 1QFY23. The fall in YoY growth was largely attributed to base effects. Nominal GDP growth remained high at 16.2%YY as deflator, which is used to measure inflation was still close to double digits (9.5%) in 2QFY23.

Continue Reading

India’s Labour Markets – Urban Rural Demand Divergent Trends

06 Dec 2022

Citi analysts reviewed India’s wages and employment data for 2QFY23 revealing divergence between the two datasets. Wage cost growth for listed companies in 2QFY23 continued to suggest favorable urban demand dynamics while real wage growth remained in negative territory.

Continue Reading

2QFY23: Earning update

06 Dec 2022

BSE 100 2Q’23 earnings declined 6% on a YOY basis with an estimated Nifty EPS for FY 23 down by 5%since June 23. Despite lowers estimates on FY23 EPS, FY 24 estimate EPS remains largely unchanged. EX commodities EBITDA/Earnings were up 16% and 32% YOY. In first half of FY 23 witnessed retails outflow as well as moderation in DMF inflows.

Continue Reading

Economic Update - A Positive Surprise on BOP

17 Oct 2022

As per Citi analyst's view, the current account deficit (CAD) at 5.4% and the balance of payment (BOP) deficit at $38 billion may have peaked out in 2 QFY 23. Better than expected software exports, a sharp jump in net banking capital, lower oil prices, and favorable year-end seasonality led to better than expected CAD and BOP. Citi analysts expect $ 9-10 billion deficit in each of 3Q/4QFY23 and revise their BOP deficit forecast to $ 52 billion vs $ 73 billion earlier. Citi analysts also revised their CAD forecast to 3.6% of GDP versus 3.9% earlier.

Continue Reading

RBI Policy Update ‘Sept 2022

03 Oct 2022

In line with the recent trend of tightening rates by global central banks, the RBI announced the fourth consecutive rate hike in a row on 30th Sep’22 amid surging inflation and slowing global growth. The MPC’s rate decision and macro forecast were on expected lines. The policy stance and aggressive global monetary tightening has led Citi analysts to revise the peak repo rate forecast to 6.5% (vs 6.0% earlier). They expect a likely 35bps hike in December and 25bps hike in February 2023. With RBI not concerned on near term liquidity tightness, the monetary policy could pivot in 2H2023 accounting for a drop in the CPI (below 6%).

Continue Reading

RBI MPC Preview Sep'22 Update: 50 Bps with a Neutral Stance Expected

27 Sep 2022

Citi Analysts expect a 50bps repo rate hike to 5.9% and a change in stance to “Neutral” as their base case in the upcoming Sep MPC. They expect RBI to maintain the inflation view of 6.7% with risk titled to the upside (on account of rising food prices). Accounting for repeated supply-side shocks and an increasingly hawkish global central banks, MPC may take the policy rates closer to neutral, before turning more data dependent. Whether it will be a 35bps or a 50bps rate hike will be a function of members differing on the efficacy of front-loaded pace of tightening. Key Points appended below:

Continue Reading

An Inline August CPI Inflation likely to Temper RBI Stance

22 Sep 2022

India Headline CPI rose by 29bps to 7.0%YY in Aug-22, largely led by uptick in CPI Food & Bev. ex vegetable. With increasing divergence within the food basket evidenced by subdued vegetables prices and elevated cereals prices, August witnessed the sharpest MoM jump in rice and wheat prices (since 2014). Citi analysts retain CPI forecast of 6.7% FY23 for average and expect 4QFY23 inflation at ~5.9%YY. With CPI prints largely in line with RBI forecast, they believe the central bank may temper the pace of policy normalization in September by opting for a 35bps rate hike coupled with no change in MPC stance.

Continue Reading

Lower than expected Q1 GDP print, leads to revision of FY 23 GDP Forecast

19 Sep 2022

Compared to Citi's view (18%) and the consensus (15.3%), real GDP increased by 13.5%YY in the first quarter of FY23. Citi Analyst have revised our FY23 real GDP prediction downward to 6.7%YY (from 8.0% previously) due to a much worse 1Q print. Continued contact-based service openings, a slight reduction in margin pressure, a gradual relaxation of the net exports drag, and an improvement in non-subsidy linked government expenditure could assist growth in rest of FY23.

Continue Reading

An Erratic Monsoon poses Risk to Inflation

07 Sep 2022

India is experiencing an erratic monsoon season leading to disruption in sowing of crucial summer crops. Citi analysts highlight that rising pressure on cereal pressure poses a ~15-20bps upside risk to the baseline 2HFY23 CPI inflation forecast (~6.2%YY).They expect headline inflation in August to be likely close to 7%YY with the risk titled to the upside (10bps)

Continue Reading

Q1 FY 23 Earnings Update: In Line but Waning; NIFTY target revised to 17k admist rich valuations

01 Sep 2022

1Q FY 23 BSE-100 earnings came in largely in line with estimates at 8% y-o-y top-line growth. Citi FY23E NIFTY EPS growth is estimated at ~10% YoY.While NIFTY is up ~11% in the last 1m, valuations are high both on absolute(>19x PE) and relative basis(compared to EM/DM and bond yields).

Continue Reading

RBI MPC Aug'22 Preview:Where will the MPC Tilt - a Hike of 35bps or 50bps?

04 Aug 2022

The August MPC is happening in the backdrop of tightening liquidity and elevated inflation. Citi analysts believe that MPC may likely opt for a ~35bps hike at the August meet. The central bank may continue with “withdrawal of accommodation” stance with emphasis on data-dependence rather than explicit forward guidance.

Continue Reading

Indian Industry AUM Trends : June 2022

28 July 2022

Citi analysts highlight that Ex-SIP Gross Equity Inflows have declined further in June 2022.Overall, Income and liquid fund outflows are high at Rs2.2tn in 1HCY22 compared to Rs889bn of inflows over Oct ‘20-Oct ’21. NFO pipeline, post regulatory ban on new launches for few months remains robust, while Incremental flow quantum and associated distributor payouts continue to be monitored.

Continue Reading

Mid Cap-Large Cap Play off

19 July 2022

Mid-caps have outperformed large-caps significantly over 2020 and 2021, as better-than-expected earnings growth for corporates + easy liquidity (strong FII and DMF inflows) environment benefited Indian equities. Given the outlook & risk reward Citi analysts prefer large caps to SMID in general, at this stage.

Continue Reading

India Equity Strategy: Markets on the Run?

29 June 2022

With NIFTY valuations over a 15yr period above long-term valuations, Citi analysts suggest remaining selective despite risk reward improving. They have lowered the Jun'23 NIFTY target to 16.5k based on 16.5x multiple (17.5x earlier) considering the impact of rate hikes on cost of equity.

Continue Reading

RBI Shifts Gears to Tame Inflation: Commences Monetary Tightening

05 May 2022

In a Surprise Move, the MPC held an off-cycle meeting to re-assess the evolving growth-inflation dynamics and decided to hike policy rates by 40bps from 4% to 4.4% The CRR was also hiked by 50bps to 4.5% of NDTL which will result in a liquidity withdrawal of 87,000 crores. Citi analysts expect 10Y yields to move towards 8% mark in FY23.

Continue Reading

Understanding India’s Credit Growth Dynamics

02 May 2022

The total credit expansion in FY22 has been ~INR 9.7trn (~INR 6trn in FY21). As a sign of cautious optimism, Citi analysts highlight that bank credit growth has moved up to 8.6% in March 2022 however the credit to GDP ratio has been declining in FY22.

Continue Reading

A Trade Data Face off? Prices Spike and Volume Wanes

21 April 2022

India’s nominal trade growth got a boost from volume growth even while prices remained elevated for most of FY22.However, Citi analysts highlight that as volumes moderate, price spike may become the prime driver of nominal imports even as contribution of volume growth towards nominal export is falling.They expect FY23 current account deficit at 2.8% of GDP (vs 2.5% earlier) and BoP deficit of USD18bn in FY23 (vs USD 7bn earlier)

Continue Reading

4Q Earnings Preview: Financials to Drive Growth; Margin Pressures Mount

12 April 2022

India Inc is set to declare the March 2022 Quarterly earnings over the next few weeks. Our Analysts expect Citi Universe 4Q earnings growth at ~12% YoY, largely driven by financials. Margin pressures are evident everywhere with sectors like autos, pharma and IT to be impacted the most.

Continue Reading

RBI MPC April'22 Preview: A Dovish Nudge to Manage Hawkish Risks

07 April 2022

The RBI is expected to unveil its policy decisions on April 8th,2022. Citi analysts expect RBI to modify the forward guidance by altering the relative weights of growth and inflation, rather than an outright change in stance to “neutral”.

Continue Reading

Reopening of the Economy Drives Urban-Rural Divergence Deeper

31 March 2022

The Reopening Led Recovery has Intensified the Urban-Rural Divergence with Broad recovery index rising 4.1%MoM in Feb-22 and Rural consumption index still ~6% below pre-Covid. Citi analysts highlight that Despite Omicron, India could avoid GDP contraction in 4QFY22.

Continue Reading

Growth Drivers for FY 23: Re-evaluating India’s Macro Scenarios

24 March 2022

Citi analysts have revaluated India Macro Scenarios amidst Commodity Price Inflation. They have revised FY23 headline CPI inflation forecast upwards by 70bps to 5.7%YY and expect real GDP growth in FY23 at 7.5%YY (vs 8.0% earlier).

Continue Reading

Oil & Geopolitics: Implication for Indian Equities

08 Mar 2022

With the escalation of tensions between Russia and Ukraine, oil prices rallied above $100. What is the Implication of Geopolitical Uncertainty and Higher Oil Prices on Indian Equities?

Continue Reading

January 2022 Inflation Print: A Peak before Expected Moderation

22 Feb 2022

January CPI at 6% has likely hit a near-term peak led by unfavourable base effects (led by vegetables) and may moderate over the next 4-5months.Citi analysts maintain their view of delayed normalization of monetary policy by RBI and push back their first repo rate hike view to at least October from August earlier.

Continue Reading

A Benign RBI with a Dovish Tilt and Patient Policy Stance: RBI Monetary Policy Feb 2022 Announcements

11 Feb 2022

The MPC in its Feb policy review kept the benchmark interest rate unchanged at 4% and decided to continue with the accommodative stance signallingits continued support to economic growth for as long as required. The real GDP Growth forecast for FY23 is estimated to be at 7.8% with retail inflation expected to peak in Q4 FY22 to 5.7%. Citi analysts expect 10y bond yield to push towards 7.25% in the months ahead

Continue Reading

Budget FY2023: Anchored on Policy Continuity a Pro-Growth Road Map with “Gati” & “Shakti” through increased capex

01 Feb 2022

Indian Finance Minister Nirmala Sitharaman presented the Annual Budget for fiscal year 2022-23 on 1 February, 2022. The budget presented in a paperless form for the second time, focused on developing world-class physical infrastructure, a more vibrant digital ecosystem and aspirational goals of a green India.

Continue Reading

An Equity Perspective: Union Budget FY23 – Seesaw of Risk & Opportunity.

31 Jan 2022

The Finance Minister will present her second post-pandemic budget on February 1, 2022. Our Economists expect infrastructure push to remain the key theme of the FY23 Union Budget. Markets are factoring in continued strong earnings momentum and absolute/relative valuations are elevated. Our Dec'22 NIFTY target is 17.5k

Continue Reading

Union Budget – Part 2: What is it and Why is it Important?

27 Jan 2022

In today’s episode, we talk about the Union Budget - it's constituents and why it is important

Listen to Part 1 Listen to Part 2

3Q Earnings Preview & Market Outlook

19 Jan 2022

Citi analysts expect ~24% YoY growth for Citi Universe earnings in 3Q with Volatile Sectors expected to drive growth. Markets are factoring in continued strong earnings momentum & elevated absolute/relative valuations Citi analysts suggest watching out for the upcoming budget, state elections, RBI's stance, and global cues such as USD and Fed commentaries.

Continue Reading

Q1 2022 Wealth Management Strategy

18 JAN 2022

The identification of the COVID-19 Omicron variant in November initially rocked the financial markets. While there is uncertainty ahead, it is likely that the arrival of Omicron may extend the distortions of the economy associated with COVID-19, such as a rise in goods spending at the expense of services. However, Citi analysts believe that with greater international coordination, industry experience and government preparation, a significant new variant is unlikely to send the world economy into a new recession.

Read the Report Watch the Video

Outlook 2022 - The expansion will endure: Seeking sustained returns

12 JAN 2022

The economic recovery and bull market are maturing, with moderate growth expected ahead. Citi analysts believe it is important for portfolios to evolve to provide exposure to more defensive sectors, quality firms and dividend growth strategies. In Outlook 2022, we highlight asset classes and regions that may lead the way in 2022 and beyond.

Read the Report Watch the Video

What should Investors Focus on in CY2022

17 Dec 2021

Indian Equity Markets are at ~70% premium to Emerging Markets. Given the risk the new covid variant adds at this stage - what trends justify the premium Indian equity markets command. Citi analysts highlight a few key drivers for Indian Markets in CY2022.

Continue Reading

Volatile Markets : Key Risks and Economic Recovery

01 Dec 2021

The recent market volatility highlights some risks such as elevated valuations, volatile FII flows, less supportive global backdrop and high oil prices etc. Citi analysts maintain their view of limited upside and Dec'22 NIFTY target of 17,500.

Continue Reading

Citi Wealth Insights Podcast - Index Funds

17 September 2021

In Today’s Podcast we talk about Index Funds and their importance for Investors.

Click to play

Budget FY2020: An Overview

08 JULY 2019

Balanced between growth priorities and fiscal discipline, the budget provides impetus to the financial system while making a big push on affordable housing and manufacturing. The increase in FDI limits for multiple sectors and focus on ease of doing business should benefit businesses in the medium term.

Continue Reading

Interim Budget FY2020

Gaurav Kulshreshtha | 01 FEBRUARY 2019

India Finance Minister presented the Interim Budget for fiscal year 2019-20 today. This pre-election budget aimed at reducing financial burden on the poor, while also introducing some tax relief measures for middle-income groups.

Continue Reading



Outlook 2022 - The expansion will endure: Seeking sustained returns

Q1 2022 Wealth Management strategy

Q4 2021 Wealth Management Strategy

Q3 2021 Wealth Management Strategy

2021 MID YEAR OUTLOOK Traveling to the post-COVID world: New portfolios for a new economy

U.S. Presidential Elections and U.S. / China Relations - Outlook for the Global Economy and Investment Markets

2020 Mid Year Outlook: Investment Opportunities and Challenges in a Post COVID-19 Recovery

Opportunities Amid Ongoing US-China Trade Tensions

Unstoppable Trends: Digital Disruption

Unstoppable Trends: The Rise of Asia