Chief Economist & Political Strategist, CrossASEAN Research

Prasenjit K. Basu

Chief Economist & Political Strategist

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Macroeconomics

<ul>
<li>The RBI forecast 4.4%YoY inflation in Jan-Mar'25, but a 15.7%MoM decline in vegetable prices in Jan'25 enabled headline CPI inflation to ease to 4.3%YoY. </li>
<li>Our forecast of 4.1%YoY inflation for Jan-Mar'25 remains on track. With food inflation set to recede, we expect CPI inflation below 4%YoY in Apr-Sep'25, enabling 75bp of further rate cuts. </li>
<li>If the SW Monsoon in Jun-Sep'25 is normal or better, another 25bp rate cut is likely in Dec'25, taking the repo rate to 5.25% by the end of 2025. </li>
</ul>


The RBI forecast 4.4%YoY inflation in Jan-Mar'25, but a 15.7%MoM decline in vegetable prices in Jan'25 enabled headline CPI inflation to ease to 4.3%YoY. 
Our forecast of 4.1%YoY inflation for Jan-Mar'25 remains on track. With food inflation set to recede, we expect CPI inflation below 4%YoY in Apr-Sep'25, enabling 75bp of further rate cuts. 
If the SW Monsoon in Jun-Sep'25 is normal or better, another 25bp rate cut is likely in Dec'25, taking the repo rate to 5.25% by the end of 2025. 


India: Our View About Inflation Vindicated in Jan'25, Paving Path to Faster Rate Cuts

<ul>
<li>RBI cut its policy rate by 25bp on 7th Feb'25. With inflation set to moderate substantially over the rest of CY25, we expect another 75bp of rate cuts by Aug'25. </li>
<li>Delhi election results on 8th Feb'25 saw resounding BJP victory after 27 years. Urban governance, a major focus of Budget'25, will be bolstered in Delhi and Mumbai, India's largest cities. </li>
<li>With the policy rate at 5.5% by Aug'25, and substantial income tax cuts boosting PCE, real GDP should return to 8% growth in FY26 (Apr'25-Mar'26). EPS growth will benefit too. </li>
</ul>


RBI cut its policy rate by 25bp on 7th Feb'25. With inflation set to moderate substantially over the rest of CY25, we expect another 75bp of rate cuts by Aug'25. 
Delhi election results on 8th Feb'25 saw resounding BJP victory after 27 years. Urban governance, a major focus of Budget'25, will be bolstered in Delhi and Mumbai, India's largest cities. 
With the policy rate at 5.5% by Aug'25, and substantial income tax cuts boosting PCE, real GDP should return to 8% growth in FY26 (Apr'25-Mar'26). EPS growth will benefit too. 


India: RBI to Cut 75bp More, and BJP Delhi Win to Spur 8% RGDP Growth Post Tax Cuts

<ul>
<li>Substantial reduction of tax rates for all income-tax payers will provide a robust boost to private consumption (PCE) in FY26, while reduction/rationalisation of customs duties boosts FDI and exports, medium-term. </li>
<li>Commitment to reduce public debt to 47% of GDP by FY31, and taking FY26 fiscal deficit to 4.4% of GDP, likely to be met comfortably, as nominal GDP outperforms assumptions. </li>
<li>Major support to labour-intensive exports (including tourism), and incentives for states to improve urban governance and power distribution, are forward-looking measures, as are bolsters for battery manufacturing. </li>
</ul>


Substantial reduction of tax rates for all income-tax payers will provide a robust boost to private consumption (PCE) in FY26, while reduction/rationalisation of customs duties boosts FDI and exports, medium-term. 
Commitment to reduce public debt to 47% of GDP by FY31, and taking FY26 fiscal deficit to 4.4% of GDP, likely to be met comfortably, as nominal GDP outperforms assumptions. 
Major support to labour-intensive exports (including tourism), and incentives for states to improve urban governance and power distribution, are forward-looking measures, as are bolsters for battery manufacturing. 


India: A Budget to Revive PCE, Labour-Intensive Exports & Urban Governance

<ul>
<li>In Apr-Dec'24 (3/4th of FY25), the fiscal deficit was only 56% of the FY25 target, and its 12mma was 4.9% of GDP. Seasonality should bring it to 4.7% by end-FY25.</li>
<li>PIT, CGST and customs revenue grew 11-22%YoY in CY24. Corporate taxes declined, falling 8.33%YoY in Q2FY25, but recovering to grow 3.34%YoY in Q3FY25. The worst is over for EPS growth. </li>
<li>The 4qma of the CAD was 0.6% of GDP in Sep'24; a surplus in Dec'24 likely cut the Q3FY25 deficit further. Seasonality should ensure a FY25 surplus (0.2% of GDP). </li>
</ul>


In Apr-Dec'24 (3/4th of FY25), the fiscal deficit was only 56% of the FY25 target, and its 12mma was 4.9% of GDP. Seasonality should bring it to 4.7% by end-FY25.
PIT, CGST and customs revenue grew 11-22%YoY in CY24. Corporate taxes declined, falling 8.33%YoY in Q2FY25, but recovering to grow 3.34%YoY in Q3FY25. The worst is over for EPS growth. 
The 4qma of the CAD was 0.6% of GDP in Sep'24; a surplus in Dec'24 likely cut the Q3FY25 deficit further. Seasonality should ensure a FY25 surplus (0.2% of GDP). 


India Twin Deficit Watch: CA Surplus, and a Lower-Than-Estimated Fiscal Deficit

<ul>
<li>The real policy rate is +1.28% (using CPI; +4.13% using WPI). High real rates are a hindrance to the real economy, especially with core inflation below 4%YoY for 13 months.</li>
<li>F&amp;B inflation moderated to 7.69%YoY in Dec'24 (from 9.69%YoY in Oct'24), as vegetable inflation eased to 26.6%YoY (from 42.2%YoY). All other key food and non-food inflation categories abated. </li>
<li>Bountiful winter and spring crops should dampen inflation further, allowing the first rate cut in 2 years (Feb'25), and 25bp rate cuts at each of the next 2 MPC meetings. </li>
</ul>


The real policy rate is +1.28% (using CPI; +4.13% using WPI). High real rates are a hindrance to the real economy, especially with core inflation below 4%YoY for 13 months.
F&amp;B inflation moderated to 7.69%YoY in Dec'24 (from 9.69%YoY in Oct'24), as vegetable inflation eased to 26.6%YoY (from 42.2%YoY). All other key food and non-food inflation categories abated. 
Bountiful winter and spring crops should dampen inflation further, allowing the first rate cut in 2 years (Feb'25), and 25bp rate cuts at each of the next 2 MPC meetings. 


India: Still on Track for Rate Cuts to Begin in Feb'25; Continue at Next 2 MPC Meetings

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India Treasury (INDIA GOVT)

India: Our View About Inflation Vindicated in Jan'25, Paving Path to Faster Rate Cuts

Jan'25 inflation in line with our forecast but already lower than RBI forecast for Jan-Mar'25 quarter. We expect up to 100bp of further rate cuts...

Prasenjit K. Basu

India: RBI to Cut 75bp More, and BJP Delhi Win to Spur 8% RGDP Growth Post Tax Cuts

RBI's 25bp cut likely to be followed by 75bp more by Aug'25 as inflation recedes. Delhi election to boost urban governance, and income tax cuts...

Prasenjit K. Basu

India: A Budget to Revive PCE, Labour-Intensive Exports & Urban Governance

Tax rate reduction and customs duty rationalization will boost PCE in FY26, FDI & exports medium-term. Measures to reduce public debt, support...

Prasenjit K. Basu

India Twin Deficit Watch: CA Surplus, and a Lower-Than-Estimated Fiscal Deficit

Fiscal deficit on track to be below FY25 target, revenue growth robust in PIT, CGST and customs. CAD likely to turn into surplus for FY25. EPS...

Prasenjit K. Basu

India: Still on Track for Rate Cuts to Begin in Feb'25; Continue at Next 2 MPC Meetings

High real policy rates are hindering the economy. But with core inflation low and the bountiful winter harvest, food inflation should ease...

Prasenjit K. Basu

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

India: Our View About Inflation Vindicated in Jan'25, Paving Path to Faster Rate Cuts

Jan'25 inflation in line with our forecast but already lower than ​RBI forecast for Jan-Mar'25 quarter. We expect up to 100bp of further rate cuts...

Prasenjit K. Basu

India: RBI to Cut 75bp More, and BJP Delhi Win to Spur 8% RGDP Growth Post Tax Cuts

​RBI's 25bp cut likely to be followed by 75bp more by Aug'25 as inflation recedes. Delhi election to boost urban governance, and income tax cuts...

Prasenjit K. Basu

India: A Budget to Revive PCE, Labour-Intensive Exports & Urban Governance

​Tax rate reduction and customs duty rationalization will boost PCE in FY26, FDI & exports medium-term. Measures to reduce public debt, support...

Prasenjit K. Basu

India Twin Deficit Watch: CA Surplus, and a Lower-Than-Estimated Fiscal Deficit

​Fiscal deficit on track to be below FY25 target, revenue growth robust in PIT, CGST and customs. CAD likely to turn into surplus for FY25. EPS...

Prasenjit K. Basu

India: Still on Track for Rate Cuts to Begin in Feb'25; Continue at Next 2 MPC Meetings

​High real policy rates are hindering the economy. But with core inflation low and the bountiful winter harvest, food inflation should ease...

Prasenjit K. Basu

Jan'25 inflation in line with our forecast but already lower than RBI forecast for Jan-Mar'25 quarter. We expect up to 100bp of further rate cuts...

RBI's 25bp cut likely to be followed by 75bp more by Aug'25 as inflation recedes. Delhi election to boost urban governance, and income tax cuts...

Tax rate reduction and customs duty rationalization will boost PCE in FY26, FDI & exports medium-term. Measures to reduce public debt, support...

Fiscal deficit on track to be below FY25 target, revenue growth robust in PIT, CGST and customs. CAD likely to turn into surplus for FY25. EPS...

High real policy rates are hindering the economy. But with core inflation low and the bountiful winter harvest, food inflation should ease...