EQ Saturday Sapience #61

Equity Intelligence 6th April 2024

Contract Manufacturing is Indian Pharma’s new growth pill, AI may not lead to superexponential growth in some scenarios but will lead to higher growth persistently, China has built substantial overcapacities in green technologies and automobiles threatening Chinese and global economy with the not so good consequences, Solar panel prices globally have plummeted and it is India’s moment to not get hung up on local production of modules and instead ramp up renewable capacities. 

  • Domestic contract development and manufacturing organisations are raking it in, thanks to India’s emergence as a Pharma R&D hub and China’s supply chain issues. Schemes like PLI and bulk drugs parks can reduce dependence on China by 25-30% in four to five years. Self-reliance in bulk drugs is crucial for building CDMO capabilities… Read more
  • How AI could explode the economy… And how it could fizzle… Even if you don’t think human-level AI is possible or likely in the near term, the picture could still be interesting. There are many scenarios in which AI does not lead to an “explosion” in growth, or to superexponential growth, but does lead to growth being persistently higher for some time — and more widely spread… Read more
  • Overcapacity in China has been an ongoing theme for more than fifteen years: From steel and cement it has now morphed to green technologies and automobiles. It would be in Beijing's own interest to tackle the problem… Read more
  • Solar panel prices have never been lower, and they are expected to stay there for a couple of years. This is India’s moment to regain some lost momentum on power-capacity addition instead of being hung up on local production of modules. But its inexplicable desire to have the best of both worlds will always keep its ambitious energy goals out of its reach. Read more
  • “Uncertainty actually is the friend of the buyer of long-term values.” – Warren Buffet