HDFC Securities held its annual ‘The Big Review’ in Mumbai on 19 December, offering insights into 2024 and the outlook for the year ahead. 

The roundtable featured HDFC Securities senior leadership including Dhiraj Relli, managing director and chief executive officer; Sandeep Bharadwaj, chief operating and digital officer; Deepak Jasani, head of retail research; Devarsh Vakil, deputy head of retail research; Unmesh Sharma, head of institutional equities and Varun Lohchab, head of institutional research. 

These C-suite leaders shared insights on key topics such as market growth, inflation, customer trends, GDP projections for India, adoption of Generative AI and global economies. 

Some noteworthy findings from the roundtable discussions were that India’s macroeconomic outlook for FY25 and FY26 highlights GDP growth of 6.4% (RBI estimate: 6.6%), driven by rural demand supported by favourable monsoons and government spending. Meanwhile, urban demand and private capex remain subdued. 

Inflation is projected to moderate, with the Consumer Price Index (CPI) at 4.8% in FY25 and 4-4.2% by FY28, aided by stable food prices and strong crop output. 

However, the findings cited that urban consumption will face challenges from inflation and restrictions on unsecured retail lending, but rural consumption will recover due to strong agricultural performance and a better labour market. 

Government capex will be muted in H1FY25. It is expected to rise in H2FY25, with the FY26 Union Budget emphasising fiscal prudence and private investments.

The RBI’s shift to a neutral stance in H2CY24 may lead to a rate cut in February 2025 if inflation stays below 6%. 

Furthermore, earnings growth in FY26 will likely normalise to 10%, driven by BFSI, industrials, cement, energy, and IT, while large-cap indices are expected to outperform mid- and small-cap indices. Preferred sectors include large banks, pharma, IT, consumer durables, real estate, and cement, while the senior leaders warned to remain cautious on automobiles, staples, oil and gas when it comes to earnings growth. 

During the event, we spoke with Bharadwaj to delve into the company’s 2024 marketing strategy review, its approach to safeguarding customer privacy while offering personalised solutions, and its efforts to capture the attention of Gen Z consumers, among other topics.

Edited excerpts: 

How has the year 2024 been for HDFC Securities? What marketing techniques worked in scaling the business? 

The overall market has performed well over the past few years, with consistent growth in investor participation. We've observed a steady rise in new demat accounts and active engagement in mutual funds and Exchange Traded Funds (ETFs). Personally, these segments remain highly appealing to the investor class. It's crucial to continue offering opportunities for investors to build long-term portfolios, especially considering that more than 40% of investors are under 30 years old. This indicates they are at the beginning of their investment journey, and such products play a vital role in keeping them invested for the long term.

Mutual funds and ETFs, particularly, are very effective as they are non-emotional products. Unlike equities, where daily stock movements can be tempting, these products encourage a more disciplined approach, which has been working well.

Any growth and market challenges that occurred this year? 

For us, in regards to gaining market share, we haven’t had many challenges but consistent growth. Over the past two years, we’ve made significant strides as an organisation. We've invested heavily in new platforms and technology, and a major milestone was the launch of HDFC Sky last year, through which we have acquired over 15 lakh customers—a remarkable achievement for us. I am pleased to share that everything has been progressing well so far. Additionally, we entered the ultra-high net worth (HNI) segment with the launch of HDFC Tru. At the same time, we revamped our existing app, Invest Right, to better serve our long-standing customers. As an organisation, we now effectively cater to the entire investment pyramid, spanning from ultra-HNI clients to retail investors—a gap we have successfully bridged.

For us, we remain highly aggressive in our approach. Despite the introduction of numerous regulations in the country, their impact on us has been minimal—whether in areas like "True to Label" or derivatives.

Our growth will continue to focus on incremental opportunities in cash markets, where we are already leaders. We are also expanding our presence in derivatives and exploring new spaces for investment. Overall, we are very optimistic and excited about the future.

HDFC Tru was rolled out in October 2024. How is that working out, and what impact has it had? 

HDFC Tru is still in its early days and it's too soon to talk about its uptake. This offering is niche and requires a tailored approach to engage ultra-HNI customers. We are focused on building our systems, processes, and teams to serve this segment effectively. That said, the response so far has been encouraging, and we've achieved a strong initial Assets Under Management to begin with. We're optimistic about receiving a positive reception from the ultra-HNI segment. Additionally, being closely aligned with HDFC Bank gives us the advantage of strong participation and support in delivering these specialised services.

With growing concerns around data privacy and regulations like the Digital Personal Data Protection Act (DPDP Act) and the General Data Protection Regulation (GDPR), how do you ensure a balance between personalised services and safeguarding customer data?

The DPDP is still in the process of being fully integrated. We are working on building systems to capture comprehensive customer data, enabling us to offer more personalised solutions and provide the specific information customers are seeking. As mentioned during my presentation, hyper-personalisation is the way forward. Execution has now become digitised, shifting the focus from execution to decision-making. To empower customers in making informed decisions, we need to leverage their data effectively, ensuring that our approach enhances their ability to take control of their financial choices. 

What role do AI and machine learning play in delivering personalised investment recommendations, and how do they impact customer loyalty?

AI and ML have been instrumental for a while in building customer personas and leveraging research. However, with the advent of generative AI, we’re seeing a significant shift toward hyper-personalisation. It enables businesses to connect more closely with customers, transforming experiences from being monotonous to highly tailored. This spans customer service, product innovation, self-service, and content dissemination, making interactions more engaging and impactful. For example, entertainment and e-commerce apps already excel at personalisation, and with generative AI, we can bring a similar level of excitement and customisation to finance. The challenge—and opportunity—lies in making finance not just functional but also entertaining through hyper-personalisation powered by AI and ML.

How is HDFC Securities positioning itself to attract millennial and Gen Z investors?

We recently introduced the 'youth plan', specifically designed for individuals under the age of 25 who are in the early stages of building their investment careers. This is a critical time when they often make mistakes, so we created a one-year learning program comprising 12 monthly modules. Each month, participants receive guidance and hands-on support to enhance their understanding of investing. At the end of the 12 months, they are awarded a certificate, marking their progress and learning journey. This program is offered at a one-time fee of just INR 499, with free trading and investing included. We aim to equip young investors with the knowledge and tools they need to confidently embark on their investment journey.

Lastly, any manifestations for HDFC Securities for the year 2025…

At HDFC Securities, our primary objective as an organisation is to achieve a substantial incremental market share. When you consider that nearly 20% of customers hold an HDFC Bank account—essentially every fifth customer—we see a significant opportunity to leverage this base. By capitalising on HDFC Sky, we can further enhance our position and turn this into a win-win situation. Our focus is on expanding the reach of our products, especially given our substantial investments in technology and the digital space. Now is the time to reap those benefits and strengthen our connection with customers.