Published on June 7, 2025

It’s all relative

Following this, investors would be tempted to think ‘is the correction over?’ While there has been a severe timewise correction in stocks, unfortunately by one metric they are in their most expensive zone in the last 10 years! This may continue to weigh on shareholder returns.Companies to followNot just TCS, but for its major contemporaries as well — Infosys, Wipro and HCLTech — the period FY24-27 will rank amongst their worst three-year period in terms of growth. In this context, with bond yields globally on the rise and providing attractive yields, it might make FPIs look past these stocks.

The charts compare the bond-equity yield spread for the IT stocks from the perspective of a foreign investor, which is the stock’s earnings yield minus the US 10-year bond yield, for the last 10 years. By this measure although stock valuations (barring HCLTech) have corrected significantly from highs, the irony is that on a relative basis they are hovering around their most expensive levels in the last 10 years.

Hunger for growth

Take TCS – its PE today is bang where it was 10 years back, yet when compared to other investible options from an FPI perspective it is unattractive versus 10 years back. Not only this, equally on the unfavourable side is its growth prospects today. In FY2015, TCS delivered constant currency (CC) revenue growth of 17 per cent — that alone on its own sufficiently justified a 25x PE, leaving apart the attractive bond-equity yield spread. To the contrary, its CC revenue growth in FY25 was just 4.2 per cent.The period since GFC triggered the phase of global investor’s hunger for yields as interest rates in developed markets dropped to near zero or even negative levels. Compared to a 10-year government bonds yielding 0 to 2 per cent, even stocks with PE of 30 times or earnings yield (1/PE) of 3.3 per cent (generally viewed expensive in the pre GFC era) suddenly appeared attractive. As long as the earnings yield was above the government bond yield, and it also came with decent and consistent earnings growth, such stocks found strong favour. IT stocks neatly fitted into this spot.As compared to hunger for yields in the era of low interest rates, global investors are now hungry for growth. High payout ratios — like those seen in IT majors that distribute most of their profits to shareholders instead of reinvesting for growth in new businesses — worked well earlier, but may now put pressure on these companies.Investors will be willing to buy stocks/indices with low or negative bond-equity yield spread if the growth prospects are bright, but currently that is missing for IT majors.

The cabin isn’t bad, either. A 12.9-inch touchscreen infotainment system is the centrepiece, but it’s programmed to be more than just a large screen on the centre console. Essential features like ESC can be accessed through quick-toggle menus, and while it gives you enough screen real estate for Android Auto and Apple CarPlay, it has permanently placed icons, ensuring you don’t struggle with menus. Both volume sliders and temperature controls are touch-sensitive sliders below the screen. The front cloth seats, albeit a great homage to the first GTI, can feel a bit too tight for some drivers, and with the front seat set according to my height, the rear legroom was substantially reduced. 

You won’t be bothered about any of that the moment you set out for your drive. We had access to the NATRAX test centre near Indore for this drive — including the 11.3 km high-speed circuit — and the GTI showed its true colours. The car epitomises flexibility; you can hoon it around a racetrack, and, without making any mechanical changes, drive it to work like nothing happened, and the car will quite obediently follow your lead. The sleek exterior design draws your attention quickly and is also well-proportioned, but not without great hints of aggression, making the car’s purpose quite evident. There are four exterior colours to choose from, its 18-inch alloy wheels are standard, and there’s no dearth of ‘GTI’ badges. An illuminated strip joins the two headlights, making the Golf GTI ever so slightly more dramatic when it gets dark outside. This is further complemented by an illuminated VW logo, while the trademark red strip across the front, the five-pod fog lights, and the fang-like elements on the lower grille work in tandem to ensure that the GTI’s is a face you wouldn’t forget. 
The 12.9-inch touchscreen is the centerpiece — more than just a big display, it’s smartly integrated for enhanced functionality
| Photo Credit: Kaizad Adil Darukhanawala 

Start the car in sport mode, and the exhaust has a mild rumble (which isn’t too intrusive), but as revs climb, the engine noise becomes more characterful, and it even emits pops without needing a ‘pops and bangs’ tune from your friendly tuner. The chassis, too, is remarkable, again signifying the Golf GTI’s flexibility. It doesn’t get adaptive dampers, but despite that, the ride is comfortable. In the handling department, the Golf scores quite well. Its nose is eager to follow your steering input although the steering itself feels a bit numb. You can fully deactivate the car’s stability control, but I found that ESC Sport allowed me to push the car without intervening. My only gripe is that while the automatic gearbox is quick to shift, both by itself or when you operate it using the paddle shifters, a car like this deserves to be specced with a manual gearbox. 

Balanced dynamics

© Motoring WorldNearly a decade ago, Volkswagen India did the unthinkable. It brought to our market a car that seemed impractical, had fewer doors, and was about four times as expensive as the one it was based on. Despite that, it found many takers, quickly helping it attain a legendary status — so much so that used examples show nearly no signs of depreciation, even a decade later. That was the Volkswagen Polo GTI, and now, nine years later, Volkswagen has brought out another GTI; this time, a more powerful and definitely more focussed one. It is the Mk 8.5 Golf GTI, a front-wheel drive hatchback whose badge is considered synonymous with ‘hot hatch’. We take it out for a drive to understand what the fuss is aboutPublished on June 6, 2025 I’ve always adored the Golf GTI, and I’m certain there are many out there who share the same sentiment. Priced at ₹53 lakh, ex-showroom, the Golf GTI isn’t going to be within everyone’s reach, but you know what, if you’ve wanted one badly (and have the means), you would have booked it already. The first lot of 150 cars coming to India is sold out already, which proves my point.