Deepinder Dhillon

Money-Manager looking @ global equity, tech & econ trends

[Deepinder Dhillon @dpdhillon]

@CourtsideFilms @jagmeett_singhh Willing to start a gofundme to send Jagmeet to Olajuwon 2 month 1x1 coaching camp. DM me if anyone interested.

[Deepinder Dhillon @dpdhillon]

@NDTVProfitIndia you mean up?

[Deepinder Dhillon @dpdhillon]

@Kyunghoon_Kim_ Let's do AI, Semiconductors & DRAM! 🤖🇰🇷🇮🇳

[Deepinder Dhillon @dpdhillon]

@grok @SnowballHustle @TankerTrackers @grok so did the blockade fail?

[Deepinder Dhillon @dpdhillon]

@grok @SnowballHustle @TankerTrackers So did the blockade fail?

[Deepinder Dhillon @dpdhillon]

Below are the structural factors behind India’s relative underperformance and FII outflow:

1. Slower nominal GDP growth is constraining revenue momentum

Nominal GDP has slowed to ~8-9%, insufficient for a market still viewed through a high-growth lens. Top-line momentum remains tepid, highlighting the need for globally competitive national champions in autos, batteries, capital goods, semiconductors, hardware, and Internet platforms. India must also adopt a more entrepreneurial industrial policy framework—one designed to nurture innovation, scale, and risk-taking—to foster these champions and integrate them into global supply chains.

2. Deteriorating return metrics are eroding India’s historical advantage

Indian corporates once enjoyed best-in-class returns on equity (ROE) near 15%, far above the 6–8% regional average. But this structural advantage is fading. As margins peak and competition intensifies, ROEs are normalizing toward regional levels (10–12%), converging with Korea, Taiwan, and China. Without productivity and capital efficiency gains, India risks losing its reputation for superior corporate profitability.

3. Dependence on foreign ecosystems drains capital and value creation

India has effectively outsourced manufacturing to China and North Asia, and its digital economy to the United States. This structural dependence causes a steady outflow of capital and profit as critical value chains—both physical and digital—are anchored abroad. India’s major global competitors are capturing a greater share of value from Indian demand than domestic firms themselves.

4. Chronic underperformance relative to potential output

India’s actual GDP likely trails potential by roughly 2 percentage points annually due to weak total factor productivity (TFP) growth. If this gap persists, structural unemployment will rise, and the demographic dividend could morph into a demographic curse. Key productivity drivers—power sector reform, agricultural modernization, dedicated freight corridors, and improved efficiency in direct benefit transfers—require sharper execution and sustained institutional focus.

5. Insufficient investment is constraining scale and competitiveness

India’s combined private and public capital expenditure stands near USD 600 billion—less than the annual CAPEX of just four or five U.S. hyperscalers, which totals around USD 650 billion. This imbalance illustrates India’s underinvestment in scale, technology, and industrial capacity. India needs greater private investment and foreign direct investment (FDI), supported by a predictable policy and regulatory environment that encourages long-term capital formation and industry creation. Despite having 16% of the global workforce, India accounts for only 2.5% of global manufacturing output—a striking signal of industrial inefficiency.

6. AI-era dynamics favor hardware and manufacturing—India’s weak spots

The global technology value chain is shifting from software-driven ecosystems toward hardware and manufacturing dominance in the age of AI. India, still heavily concentrated in IT services, risks being marginalized as computation, design, and fabrication become the new centers of economic gravity. Building competitive domestic hardware and AI infrastructure is essential for long-term relevance.

7. Limited access to foreign capital restricts asset growth and LTCG/STCG restricts returns

Market access remain challenging. India could benefit from a calibrated return to previous Participatory Note (P-Note) and Offshore Derivative Instrument (ODI) regimes to attract wider pools of foreign capital and enhance secondary market liquidity.

Nifty’s annual USD returns average barely 8%. Knock off 20% for capital gains, and you’re left with roughly 6.5%—before transaction friction. Simply put, India’s equity returns are too low to justify the trouble through FPI route with LTCG and STCG.

[Deepinder Dhillon @dpdhillon]

Over the past five years, FII and FDI flows have been dismal. At best, LTCG and STCG taxes yield around $6–$7 billion annually—but that comes at the cost of losing over $60–$70 billion in potential FPI and FDI.

Nifty’s annual USD returns average barely 8%. Knock off 20% for volatility and costs, and you’re left with roughly 6.5%—before transaction friction. Simply put, India’s equity returns are too low to justify the trouble with LTCG and STCG.

Market access remain challenging. India could benefit from a calibrated return to previous tax efficient Participatory Note (P-Note) and Offshore Derivative Instrument (ODI) regimes to attract wider pools of foreign capital.

[Deepinder Dhillon @dpdhillon]

Below are the structural factors behind India’s relative underperformance:

1. Slower nominal GDP growth is constraining revenue momentum

Nominal GDP has slowed to 8–10%, insufficient for a market still viewed through a high-growth lens. Top-line momentum remains tepid, highlighting the need for globally competitive national champions in autos, batteries, capital goods, semiconductors, hardware, and Internet platforms. India must also adopt a more entrepreneurial industrial policy framework—one designed to nurture innovation, scale, and risk-taking—to foster these champions and integrate them into global supply chains.

2. Deteriorating return metrics are eroding India’s historical advantage

Indian corporates once enjoyed best-in-class returns on equity (ROE) near 15%, far above the 6–8% regional average. But this structural advantage is fading. As margins peak and competition intensifies, ROEs are normalizing toward regional levels (10–12%), converging with Korea, Taiwan, and China. Without productivity and capital efficiency gains, India risks losing its reputation for superior corporate profitability.

3. Dependence on foreign ecosystems drains capital and value creation

India has effectively outsourced manufacturing to China and North Asia, and its digital economy to the United States. This structural dependence causes a steady outflow of capital and profit as critical value chains—both physical and digital—are anchored abroad. India’s major global competitors are capturing a greater share of value from Indian demand than domestic firms themselves.

4. Chronic underperformance relative to potential output

India’s actual GDP likely trails potential by roughly 2 percentage points annually due to weak total factor productivity (TFP) growth. If this gap persists, structural unemployment will rise, and the demographic dividend could morph into a demographic curse. Key productivity drivers—power sector reform, agricultural modernization, dedicated freight corridors, and improved efficiency in direct benefit transfers—require sharper execution and sustained institutional focus.

5. Insufficient investment is constraining scale and competitiveness

India’s combined private and public capital expenditure stands near USD 600 billion—less than the annual CAPEX of just four or five U.S. hyperscalers, which totals around USD 650 billion. This imbalance illustrates India’s underinvestment in scale, technology, and industrial capacity. India needs greater private investment and foreign direct investment (FDI), supported by a predictable policy and regulatory environment that encourages long-term capital formation and industry creation. Despite having 16% of the global workforce, India accounts for only 2.5% of global manufacturing output—a striking signal of industrial inefficiency.

6. AI-era dynamics favor hardware and manufacturing—India’s weak spots

The global technology value chain is shifting from software-driven ecosystems toward hardware and manufacturing dominance in the age of AI. India, still heavily concentrated in IT services, risks being marginalized as computation, design, and fabrication become the new centers of economic gravity. Building competitive domestic hardware and AI infrastructure is essential for long-term relevance.

7. Limited access to foreign capital restricts growth

Market depth and access remain challenges. India could benefit from a calibrated return to previous Participatory Note (P-Note) and Offshore Derivative Instrument (ODI) regimes to attract wider pools of foreign capital and enhance secondary market liquidity.

[Deepinder Dhillon @dpdhillon]

Below are the structural factors behind India’s relative underperformance:

1. Slower nominal GDP growth is constraining revenue momentum

Nominal GDP has slowed to 8–10%, insufficient for a market still viewed through a high-growth lens. Top-line momentum remains tepid, highlighting the need for globally competitive national champions in autos, batteries, capital goods, semiconductors, hardware, and Internet platforms. India must also adopt a more entrepreneurial industrial policy framework—one designed to nurture innovation, scale, and risk-taking—to foster these champions and integrate them into global supply chains.

2. Deteriorating return metrics are eroding India’s historical advantage

Indian corporates once enjoyed best-in-class returns on equity (ROE) near 15%, far above the 6–8% regional average. But this structural advantage is fading. As margins peak and competition intensifies, ROEs are normalizing toward regional levels (10–12%), converging with Korea, Taiwan, and China. Without productivity and capital efficiency gains, India risks losing its reputation for superior corporate profitability.

3. Dependence on foreign ecosystems drains capital and value creation

India has effectively outsourced manufacturing to China and North Asia, and its digital economy to the United States. This structural dependence causes a steady outflow of capital and profit as critical value chains—both physical and digital—are anchored abroad. India’s major global competitors are capturing a greater share of value from Indian demand than domestic firms themselves.

4. Chronic underperformance relative to potential output

India’s actual GDP likely trails potential by roughly 2 percentage points annually due to weak total factor productivity (TFP) growth. If this gap persists, structural unemployment will rise, and the demographic dividend could morph into a demographic curse. Key productivity drivers—power sector reform, agricultural modernization, dedicated freight corridors, and improved efficiency in direct benefit transfers—require sharper execution and sustained institutional focus.

5. Insufficient investment is constraining scale and competitiveness

India’s combined private and public capital expenditure stands near USD 600 billion—less than the annual CAPEX of just four or five U.S. hyperscalers, which totals around USD 650 billion. This imbalance illustrates India’s underinvestment in scale, technology, and industrial capacity. India needs greater private investment and foreign direct investment (FDI), supported by a predictable policy and regulatory environment that encourages long-term capital formation and industry creation. Despite having 16% of the global workforce, India accounts for only 2.5% of global manufacturing output—a striking signal of industrial inefficiency.

6. AI-era dynamics favor hardware and manufacturing—India’s weak spots

The global technology value chain is shifting from software-driven ecosystems toward hardware and manufacturing dominance in the age of AI. India, still heavily concentrated in IT services, risks being marginalized as computation, design, and fabrication become the new centers of economic gravity. Building competitive domestic hardware and AI infrastructure is essential for long-term relevance.

7. Limited access to foreign capital restricts growth

Market depth and access remain challenges. India could benefit from a calibrated return to previous Participatory Note (P-Note) and Offshore Derivative Instrument (ODI) regimes to attract wider pools of foreign capital and enhance secondary market liquidity.

[Deepinder Dhillon @dpdhillon]

@financialjuice

[Deepinder Dhillon @dpdhillon]

@saxena_puru What’s the downside though, they’re like 4x P/E? Do the Mag7 cut CAPEX by 30-40%, hence cancelling orders with memory makers?

[Deepinder Dhillon @dpdhillon]

@TheIntelFrog @grok how many troops are the above?

[Deepinder Dhillon @dpdhillon]

@Tushar15 @grok please fact check?

[Deepinder Dhillon @dpdhillon]

The Red Sea Port has a capacity of 4.5m b/d. 1m b/d was pre-war utilisation of the East/West pipeline, this will likely ramp up a further 3.5m b/d to reach 4.5m b/d over next few days. 2m b/d was already being routed for domestic use. An incremental 0.5m b/d will flow through Fajaira Port.

Roughly 4m b/d re-routing possible. Still missing about 12m+ b/d.

[Deepinder Dhillon @dpdhillon]

@grok @NYYTKM @JavierBlas @TMTLongShort but pre war, 1 mb/d was already flowing from East/West for exports, similarly 1.3 mb/d was already flowing through Fajairah. So incremental only extra 4m can flow no?

[Deepinder Dhillon @dpdhillon]

@grok @NYYTKM @JavierBlas @TMTLongShort I see, so the East-West/Yanbu and Fujairah pipelines can theoretically only re-route ~4mb/d (3-3.5m + ~0.5m) of crude from Hormuz. So We're still missing ~11mmb/d crude + 5mb/d distillates.

[Deepinder Dhillon @dpdhillon]

@grok @NYYTKM @JavierBlas @TMTLongShort so when people quote the 20m bpd figure from Hormuz, how much of htis was exported from Fujairah and/or East-West pipeline?

[Deepinder Dhillon @dpdhillon]

@grok @NYYTKM @JavierBlas @TMTLongShort How much was UAE shipping through Hormuz pre-war and conversely sending through Fujairah pre-war? What capacity is Fujairah running at now, how much extra can they divert through Fujairah?

[Deepinder Dhillon @dpdhillon]

@grok @NYYTKM @JavierBlas @TMTLongShort So there is capacity to raise exports by another 2m bpd?

[Deepinder Dhillon @dpdhillon]

@grok @NYYTKM @JavierBlas @TMTLongShort how much spare capacity is there at via East-West Pipeline to Yanbu?