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ENAM ASSET MANAGEMENT
Portfolio Update Emerging India Portfolio (EIP)
June-2012
This document is provided for informational purposes and is not intended as an offer to sell or solicitation of an offer to buy securities or other instruments. Our services will be rendered strictly inaccordance with the SEBI (Portfolio Managers) Regulations, 1993. Please read the Disclosure Document prior to engaging our services. The information contained herein is based on our assumptionsand can be changed without any prior intimation. This information must not alone be taken as the basis for an investment decision. Please consult your financial, legal or tax advisors. Investment insecurities is risky and there is no assurance of returns or preservation of capital. Neither the firm, nor its directors, employees, agents or representatives shall be liable for any damages whether direct orindirect, incidental, special or consequential including lost capital, lost revenue or lost profits that may arise from or in connection with the use of this information. No part of this material may be copied orduplicated or redistributed without prior written consent.
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Agenda
1
2
3
4
Fundamental Equities Platform
The India Story
Market Cycles
5
Outlook
Emerging India Portfolio
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ENAM ASSET MANAGEMENT
ENAM Fundamental Equities Platform
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Enam / Asset Management / India Fundamental Equities Platform / EIP / - 4 -
Opportunity Longevity Management Value Accretive Discipline
Size andattractiveness
Addressability
Quality andsustainability ofgrowth
Risk mitigation
Sustainablecompetitiveadvantages and theirlead time
Predictability,adaptability, resilience
Entry barriers
Technology andprocesses
Access to naturalresources / markets
Costs, productivity
and efficiency
Brands anddistribution network
Replicability andscalability of businessmodel
Intellect + Integrity
Alignment ofobjectives
Orientation towardsminority
Adaptability andinnovation
Ambition tempered byreality
EVA Positive,duration andmagnitude
Free cash flows
Return on incrementalcapital
Improper capitalallocation can bedestructive
Incrementalimprovements can
generatedisproportionatereturns
Focus Avoiddistractions
Volatility is not athreat, its an
opportunity !
Correcting mistakesought to be a religion
Ignorance and denialdrive averaging
Being part of a herdnever helped anybody
Differentiate betweenvalue based / eventbased and hypebased buying
ENAM Fundamental Equities PlatformINVESTMENT PHILOSOPHY
Seek to identify high-quality businesses that are structurally well-positioned, have sustainablecompetitive advantages and strong execution capability for consistent long-term growth
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ENAM Fundamental Equities PlatformRESEARCH PROCESS
InvestmentUniverse
Research &
Analysis
Idea Generation
Portfolio Construction,Risk Management &Monitoring
S&P CNX 500,other select ideas
Over 250companies
40-50stocks
~25stocks
Research and investment process
Prospective Investment Universe BSE 500, CNX S&P 500
Selective coverage outside the above
Special cases, such as stocks with PIPEinvestments
Selection criteria Market cap > INR 10 Bn (~USD180 mn)
Key ratios
Qualitative aspects
Thematic views
ENAM Investment Universe Universe selection is a comprehensive and
ongoing feature of the investment process,done using sophisticated proprietary financialmodels
Over 250 companies thus selected arecovered using rigorous research process
Represents over 80% of market cap
Revised quarterly
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UNIVERSEDefining the playing
field
DETAILED FINANCIALANALYSIS
In-depth Analysis
UNIVERSE SELECTION IS ACOMPREHENSIVE & ON-GOINGFEATURE OF OURINVESTMENTPROCESS:
1) Quarterly review by theInvestment team
2) Process involvescomprehensive analysisbased on variouscriteria
Market Cap Key Ratios Qualitative aspects
Thematic views
IDEA GENERATION &PORTFOLIO CONSTRUCTION
High Conviction Investments
PORTFOLIO REVIEWTracking existing
investments
WE UNDERTAKE A VERYCOMPREHENSIVE BUT ASIMPLE MODEL FORFINANCIAL ANALYSIS.THIS INVOLVES:
1) Dissecting the P&L to arriveat real profits from Operations- This goes a long way todetermine the sustainablemargins
2) Balance Sheet Analysis toevaluate efficient utilization ofcapital
3) Close monitoring of key
drivers that may impact theoperating performance
TEAM HAS EXTENSIVEKNOWLEDGE OF COMPANIESAT GRASS ROOT LEVEL
OUR PROCESS INVOLVES:
1) Financial Analysis
2) Discussions amongstinternal and external analysts
3) Management meetings
4) Understanding of internaland external levers governingthe sustainability ofperformance
5) Meeting competitors toassess competitive strengths
6) Evaluating attractive entrylevels and potential returns
7) Strict adherence to riskmanagement guidelines
PORTFOLIO MONITORINGINVOLVES:
1) Closely monitoring domesticand global macro factors
2) Actively engaged with thecompany management
3) FORECAST SHEET Actslike an investment monitoringradar screen across our investeeCos and alternate opportunities
in the market
4) Track portfolio as per riskmanagement guidelines
5) Target valuations torebalance portfolio
ENAM Fundamental Equities PlatformINVESTMENT PROCESS
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Risk Management
The investment team strictly follows a well designed, dynamic and prudentrisk management policy to mitigate the inherent risk in equities
Comprehensive risk management comprises:
Flexibility to deploy the total portfolio in cash for downside protection
Diversification and liquidity management
Adherence to stringent exposure limits on sectors, business groups and individual companies
Regular monitoring to ensure compliance with risk management guidelines
No use of derivatives / leverage trades
Third party independent assurance of activities, processes and controls
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ENAM ASSET MANAGEMENT
The India Story Down But Not Out
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India Remains On The Economic Growth Path
Source: Bloomberg, IMF, Business Beacon, ENAM Research* 2012 Estimates
1990 2000 2010 2012
GDP USD Bn 313 461 1,380 1,750*
Average GDP Growth % 5.6 5.6 7.3 6.5*
Market Cap USD Bn 27 209 1,372 1,131
BSE Sensex Index 781 5,001 17,528 17,404
Global Trade
Import USD Bn 21 50 278 397*
Export USD Bn 17 37 176 286*
Foreign Exchange Reserves USD Bn 6 38 277 295
Population Mn 838 1,006 1,173 1,210*
Working Age Population % 58 61 64 65*
INR / USD INR 18.1 46.7 44.7 50.9
India took more than 60 years to cross a GDP of USD 1TrnBy end of this decade, Indias GDP may rise over USD 6 Trn
Data as of financial year ending 31st March, 2012
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Rapid Growth Across Key Industries
0
1000
2000
3000
4000
5000
6000
FY99 FY04 FY09 FY14(e)
332 861
1981
5138
Aggregate Profits of 100 most
profitable companies (INR bn.)
30% CAGR
Airline Industry GrowthTelecom Subscriber Growth
Software Exports (INR bn.)Growth 100 Most Profitable Companies
0
500
1,000
1,500
2,000
2,500
3,000
3,500
109
3,346
(Source: AAI, DGCA)Source: ENAM Research
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2000 2010 2020 (e)
1 US 9.6 US 14.6 China 23.2
2 Japan 4.7 China 5.7 US 23.0
3 Germany 1.9 Japan 5.4 Japan 6.8
4 UK 1.4 Germany 3.3 India 6.5
5 France 1.3 France 2.6 Germany 4.6
6 China 1.2 UK 2.3 Brazil 4.3
7 Italy 1.1 Italy 2.0 Russia 3.8
8 Canada 0.7 Brazil 2.0 UK 3.6
9 Brazil 0.6 Canada 1.6 France 3.6
10 Mexico 0.6 Russia 1.5 Canada 2.7
India 0.5 India 1.4
India To Emerge As One Of The Largest Economies
9.3
7.0
2.81.7 1.7 1.2 1.2
India
China
US
France
Germany
Japan
Italy
GDP of key countries (USD Trn) 2010-30 Estimated GDP growth (%)
Improvements in infrastructure, deregulation and education could allow India to grow rapidly for decades
Source: Standard Chartered, Citigroup
Source: ENAM, Bloomberg
India: Resilient to external shocks
GDP (Y-o-Y %)
(8.0)
(4.0)
0.0
4.0
8.0
12.0
16.0
Mar-98
Mar-99
Mar-00
Mar-01
Mar-02
Mar-03
Mar-04
Mar-05
Mar-06
Mar-07
Mar-08
Mar-09
Mar-10
Mar-11
M 1 2
USA GDP Brazil GDP China GDP India GDP
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PopulationMn
GDPUSD Bn
GDP / CapitaUSD (PPP)
Market CapUSD Bn
MKT / GDP
Developed
US 311 14,587 48,387 11,661 0.8
Canada 34 1,577 40,541 1,894 1.2
UK 62 2,249 36,090 3,034 1.3
Germany 82 3,281 37,897 1,239 0.4
France 66 2,560 35,156 1,412 0.6
Japan 128 5,459 34,740 3,502 0.6
Italy 61 2,051 30,464 460 0.2
Brazil 191 2,088 11,769 1,195 0.6
China 1,341 5,927 8,382 3,131 0.5
India* 1,210 1,750** 3,694** 1,131 0.7
Market Capitalization Will Reflect The Size And Growth
Source: Bloomberg, IMF, EAMC, as on 31 Dec 2011India Data as of 31 Mar 2012** 2012 Estimates
Market cap could grow
over USD 4 Trn by 2020
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Consumption J-Curve: Indiasalready sizeable domesticconsumption will take off in ~2015-20 as demographics result in thefigure of 50:40 for dependency :working pop, as it did for the US inthe 60s & China in the 90s
Savings: Favourable demographics,rising urbanization and higher incomelevels are likely to boost Indias
savings pool to ~USD 1.4 Trn by2020 (~todays GDP), of whichfinancial savings corpus is likely to be~USD 540 Bn
This will form the bulwark ofdiscretionary consumption and alsofund infra creation
A bulk of Indias savings come fromhouseholds rather than corporates,making it a stable source of funds
Infra & Capex: India is putting up amassive across-the board CoreInfra backbone with an overallinvestment of ~USD 1 Trn over thenext five years
Power, roads, ports, airports etc willbe the key segments that will
witness explosive growth
CONSUMPTIONSAVINGS
INFRASTRUCTURE
In sharp contrast to major economies which have long term issues to be addressed,Indias issues are more immediate term, with structural pillars in place
India - Long-term Pillars Of Growth
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Indian Households Are Wealthy
Source: ENAM Research
(USD/troy ounce)
0
300
600
900
1200
1500
1800
2100
Jan-0
1
Jan-0
2
Jan-0
3
Jan-0
4
Jan-0
5
Jan-0
6
Jan-0
7
Jan-0
8
Jan-0
9
Jan-1
0
Jan-1
1
c
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
FY01
FY02
FY03
FY04
FY05
FY06
FY07
FY08
FY09
FY10
FY11
(USD trn)
Source: RBI
Source: Bloomberg, ENAM Research
Gold: 19,000 tons (approx.) = ~ $1 trn
GDP growth, savings and investment rate Urban housing stock ~$ 5 trn
Indians holding ~$ 1 trn in Deposits
Indian citizens have witnessed a generational wealth effect
C i
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ConsumptionMULTIPLE SECTORS SET FOR HIGH GROWTH
712
17
26 2932 39 41
48
8086 93
0
25
50
75
100
In
dia
Ch
ina
Thailand
Ko
rea
Malaysia
Singap
ore
Taiwan
HK
Germ
any
U
SA
UK
Denm
ark
(%)
Source: ENAM Research
Industry Units 2010 2020(e) CAGR(%)
Organized Retail US$ bn 24 266 27
Home Mortgage US$ bn 91 646 22
Air Conditioners mn p.a. 3 18 20
Digital Pay TV mn subs 24 116 17
Refrigerators mn p.a. 6 25 16
Packed Foods US$ bn 22 89 15
Two-Wheelers mn p.a. 9 35 14
HPC Products US$ bn 10 34 13
2010: Low penetration (mortgages as a % of GDP) Consumption boom across categories
Consistent economic growth to be followed by consumption boom
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Infrastructure Opportunity Is Equally Large
Unique opportunity to own annuity assets in a reflating economy
India is visibly under-invested in infrastructure
USD 1 Trn investment required by 2017 of which over 50% expected from private sector
Infrastructure spend is barely 5% of GDP (incl. Energy, Telecom, Power, Transport) vs. approx. 12% inChina
Government plans to increase infrastructure spend to 11% of GDP in FY17
Sectoral Funding Break-Up
11th Plan 12th Plan
TotalUSD Bn
% of totalinvt.
TotalUSD Bn
% of totalinvt.
Electricity 165 32% 310 30%
Roads & Bridges 70 14% 170 17%
Telecom 88 17% 138 13%
Railways 50 10% 108 11%
Irrigation 63 12% 108 11%
Water Supply & Sanitation 28 5% 113 11%
Ports 10 2% 45 4%
Airports 10 2% 23 2%
Storage 3 0.4% 10 1%
Oil & Gas Pipeline 33 6% 5 1%Total Infra Investment 513 100% 1,025 100%
155 178 203 230 260
9.9%
10.3%
10.7%
9.0% 9.5%
0
50
100
150
200
250
300
2012-13 2013-14 2014-15 2015-16 2016-17
8.0%
8.5%
9.0%
9.5%
10.0%
10.5%
11.0%
Total Infra Investment (USD Bn)Infra Investment as % of GDP
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Indians & Corporates Are OK But Not The Government
Household Savings: $230bn
Low leverage
Wealth effect:
Property
Stocks
Gold
Corporate profits ~$80bn
High RoE
Competitiveness
Low leverage
Earnings slowing, but not at
precipice unlike developed
world
On B/S:
Interest: $60 bn
Subsidies: ~$35bn
Gross Dom savings = $340bn Corporates Fiscal Def = ~$100bn
Households Steady India Inc. Resilient Government Under Stress
Telecom: Spectrum auction
Coal auctions
Disinvestment of PSUs
Land bank unlocking (ie land etc) Railways, LIC etc
Higher Tax/ GDP collections GST, DTC
NELP VIII/ KG Basin Gas profit share
Asset sales & Collections
WAY OUT
The deficit of the government can be funded with proactive asset sales
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Governments hidden weapons in a fight for liquidity
Source: ENAM Research
Iron Ore - Reserves % Disinvestment from PSU (USD Bn)
Government Debt as % of GDP
But Government Is Not Bankrupt
Government Has a Large Asset Bank which can be Unlocked
Prime Land in CitiesAbundant Natural Resources: Coal (fourth-largest reserves in the world), Iron ore,
Manganese, Mica, Bauxite, Titanium ore, Chromite, Natural gas, Diamonds,
Petroleum, Limestone and Thorium (world's largest along Kerala's shores)
Investments in Public Sector Companies and Undertakings Disinvestments
Official Gold Reserves 615 Tonnes ~ $36Bn
Indias tax incidence is the lowest among its EM peers Increase leads to
additional revenue
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ENAM ASSET MANAGEMENT
Outlook
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Positives Building Up
Inflation Cooling Off Will Lead to Further Interest Rate Cuts
Source: Bloomberg
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
10.0
(2.0)
-
2.0
4.0
6.0
8.0
10.0
12.0
May-0
6
Aug-0
6
Nov-0
6
Feb-0
7
May-0
7
Aug-0
7
Nov-0
7
Feb-0
8
May-0
8
Aug-0
8
Nov-0
8
Feb-0
9
May-0
9
Aug-0
9
Nov-0
9
Feb-1
0
May-1
0
Aug-1
0
Nov-1
0
Feb-1
1
May-1
1
Aug-1
1
Nov-1
1
Feb-1
2
May-1
2
India WPI (RHS) Repo Rate
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Positives Building Up
CAD, ex-Gold is Not Worrisome
o/w Oil imports 132 146 159
o/w Non oil imports 389 389 389
Trade balance/GDP (%) (9) (10) (10)
o/w Software 52 54 58
o/w Remittances 68 70 72
FDI 20 23 25
FII 12 12 14
Banking capital 12 15 16
NRI deposits 5 8 8
ECBs+supplier's credit etc 24 23 21
Rupee debt service (1) (1) (1)
Other capital account items 5 6 6
% of GDP 4 4 4
CAD Likely to Shrink in FY 13
INR depreciation is a positive for exports
Reduction of gold imports by ~25% YoY, can shave off ~USD 12 bn
from the import bill (at current gold prices)
USD 10/bbl correction in oil prices will shave off ~USD 14 bn from
the import bill
Crude oil + Gold account for ~44% of total imports. Any correction in the quantum of these could reduce thestrain on CAD significantly
Source: ENAM Research
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250
300
350
400
450
500
550
600
May-06
Aug-06
Nov-06
Feb-07
May-07
Aug-07
Nov-07
Feb-08
May-08
Aug-08
Nov-08
Feb-09
May-09
Aug-09
Nov-09
Feb-10
May-10
Aug-10
Nov-10
Feb-11
May-11
Aug-11
Nov-11
Feb-12
May-12
CRB Comm Index
Positives Building Up
Commodities Showing Signs of Softening
Source: Bloomberg
World Oil Demand (mbpd)
Global slowdown leads to softening of commodity prices
46.3
42.5
46.4
44.5
45.5
43.2
40
41
42
43
44
45
46
47
OECD Non-OECD
Mar-11
Feb-12
Mar-12
34.8
51
37.4
51
37.5
51
0
10
20
30
40
50
60
OPEC Non-OPEC
Mar-11
Feb-12
Mar-12
World Oil Supply (mbpd)
Valuations At Multi Year Lows
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Valuations At Multi-Year LowsOFFERS GOLDEN OPPORTUNITY TO PARTICIPATE IN THE INDIASTORY
Markets at Attractive Levels Long Term Story of India is Intact
Source: Bloomberg
P/E 17:@ 41,508(26.9% CAGR)
P/E 15:@ 36,625(23.0% CAGR)
P/E 13:@ 31,685(18.6% CAGR)
SensexFY16E
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Disparity Across Sectors
Wide Disparity across sectorsSeveral sectors at historic lows
May 2012P/E 11.80
Industry
FY-13
Fwd. P/E
FMCG 26
Food Beverage & Tobacco 22
Pharma & Bio-Technology 19
Software Services 15
Telecommunication 12
Capital Goods 11
Automobiles & Components 9
Energy 9
Value Investing
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Value InvestingDIFFERENT PHASES OF A MARKET CYCLE
Source: Marc Faber, ENAM
Leading stocks fall sharply, followedby pull back as Left outers jump in& earnings still growing
Leadership narrows Profits OK, but P/E falls Sharp, swift, short-lived no-reason
rallies
Easy & cheap Liquidity
Value buying
Catalysts: Regulatory,
Commodities
Asset & Cost inflation
Capex/ IPO/ Credit cycle
revives
Boom spreads, initially
earnings driven (phase 2),
later multiples-driven (ph 3)
P/E expansion, Easy credit
New Themes and Valuation Paradigms
Virility Symbols (Towers, diversification/ M&A)
Capex > near-future requirements Retail & IPO euphoria
Shock/ Leaders in trouble
Earnings crack
Tight money
demand & EPS fall Easy credit to
revive growth
Value OutperformsGrowth
Growth OutperformsValue
Value and Growth onpar
Value OutperformsGrowth
We are here
Value and Growth Investment styles change leadership during different phases of market cycles
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Investor Psychology Cycle
Source: ENAM
Bull markets are born on pessimism, grown on skepticism, mature on optimism and die on euphoria. The time
of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell.
Sir John Templeton
CONVICTION
REINFORCEMENT
OPTIMISM
EUPHORIA
PANIC
FATIGUEDEXIT
HOPE
FEAR
DENIAL
DESPAIR
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Challenges remain
Political uncertainty and regional differences
Governance and Corruption
Fiscal situation
High Interest rates
Crude oil prices
Shortage of skilled manpower (NREGA)
Uncertainty in EU & Reversal of Globalisation
Geopolitical Risk
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Key Reforms - Not Now But Not Never
A positive surprise on Reforms could spur growth, inward flows , currency & markets
UID
Size of Govt. staff
Subsidy reforms:
Fuel & Fertilizers
Land Acquisition Act
SEB reforms
GST
Education
Energy
Mining
Organized Retail
Infrastructure
Curbing Expenditure EfficiencyAttracting Foreign
Investment in
Reforms
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India still remains one of the fastest growing economies in the world and a very
favourable long-term investment destination
Indias problems are more internal than external
Inflation should ease due to softening of commodity prices
Interest rates are still high but expect RBI to steadily reduce the same
While urban India is witnessing some challenges, rural India continues to boom
There could be positive surprises on the political front
Market valuations witnessing huge disparity across sectors which offer immense
opportunity
With a few favourable changes market could cross its previous peak by March 2013
ENAM OUTLOOK : 2012-13
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ENAM ASSET MANAGEMENT
Market Cycles
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The First Market Cycle Of Our Generation: 88 - 91
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
Apr-88 Apr-89 Apr-90 Apr-91
Source: Bloomberg; ENAM Research
4 PMs in 4 years!, India forced to liberalize in 91
BoP crisis as CAD rose to ~3%. India forced to pledge gold. INR depreciated by 11% pa from 88 to 91
to reach Rs 20
High teen Primary & Fuel inflation
Thus, market interest rates at >20%
The bull market of 1991-92 was against the backdrop of the Gulf war, liberalisation (incl. INR devaluation
from Rs 20 to 29), culminating in the market scam
S I R ll 1996 99
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Sensex In Rollercoaster: 1996 - 99
Source: Bloomberg; ENAM Research
2,500
3,000
3,500
4,000
4,500
5,000
5,500
6,000
Apr-96 Apr-97 Apr-98
Source: Bloomberg; ENAM Research
Coalition politics at its worst: 3 PMs in 3 yrs SE Asian crisis & Russian debt default vitiate global flows
Depreciates sharply from Rs 36 to 42 as international sanctions imposed post Indias
Subdued (4-5%)
Thus, PLR fell from 16.5% in 96 to 13% by 99
: Jumps sharply from ~4% in 96 to >6% of GDP by 99
S Th SADIM* T h 2000 03
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Sensex: The SADIM* Touch: 2000 - 03
2,000
3,000
4,000
5,000
6,000
7,000
8,000
Jan-00 Jan-01 Jan-02 Jan-03
Source: Bloomberg; ENAM Research
Finally, a stable govt!
Orderly depreciation from ~44 to 47 through 2003
Remained ~6% despite two in 2001-03. Fuel prices jumped 20% as
global oil prices nearly doubled to $28/ bbl
PLRs dropped to of ~10% as policy rates fell,
(except PSUs & HDFC gp)
S Th MIDAS T h 2004 07
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Sensex: The MIDAS Touch: 2004 - 07
1,000
6,000
11,000
16,000
21,000
Apr-04 Apr-05 Apr-06 Apr-07
Source: Bloomberg; ENAM Research;
PM: Dr. Manmohan Singh
Surprise victory of Congress
Cheap Liquidity and housing bubble in Western Economies
Strengthening of rupee from 44 to 39.80
Dropped below ~5%. Global oil prices nearly doubled to $80/ bbl
Jan-08
S Fi i l C i i 2008 12
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Sensex: Financial Crisis: 2008 - 12
1,000
6,000
11,000
16,000
21,000
Mar-08 Mar-09 Mar-10 Mar-11 Mar-12
Source: Bloomberg; ENAM Research
PM: Dr. Manmohan Singh
Congress retains the house in the second term with a coalitiongovernment
Lehman Crisis, American Housing bubble crash, EU Crisis
Global uncertainty and strengthening of US $ pulled INR down to 55 from 44
Double digit inflation and high interest rates
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Portfolio Strategy
This document is provided for informational purposes and is not intended as an offer to sell or solicitation of an offer to buy securities or other instruments. The information contained herein is based onour assumptions and can be changed without any prior intimation. This information must not alone be taken as the basis for an investment decision. Please consult your financial, legal or tax advisors. Investment in securities is risky and there is no assurance of returns or preservation of capital. Neither the firm, nor its directors, employees, agents or representatives shall be liable for any damageswhether direct or indirect, incidental, special or consequential including lost capital, lost revenue or lost profits that may arise from or in connection with the use of this information. No part of this materialmay be copied or duplicated or redistributed without prior written consent.
Our Investment Strategy
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Our Investment Strategy
Adopt a conservative approach
Focus on risk adjusted returns
Invest in businesses driven by Free Cash Flows, Secular growth, Consumption and
increasing Globalisation
Long-term profit trend-line is very important
Conservative promoters with sound business models
Identify stocks with a high probability of re-rating
Monitor macro dynamics, respond quickly to the new environment and fine tune the
investment strategy accordingly
2012 - 2013
Portfolio Positioning
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EMERGING INDIA PORTFOLIO (EIP)
Portfolio Breakdown (%)
38.6
31.7
21.7
2.82.6
2.5
Consumption
Global
Secular Growth
Infrastructure
Diversified& Others
Cash
Portfolio Summary
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Portfolio Summary
2012 2013
Domestic macro issues, more than global issues, are impacting our markets
We now see signs of the economy bottoming out
Our investment strategy has been designed to reduce volatility in the portfolio
The focus of our strategy is to minimize earnings cyclicality with a greater focus on
risk-adjusted returns to improve the overall performance of the portfolio
Current portfolio positions include growth and value stocks across sectors, offering
superior returns
All portfolio positions undergo a strict evaluation process and constant monitoring
Objective is to deliver superior returns on a risk adjusted basis
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Portfolio performance
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06 Oct-10 31 May-12Portfolio Value- Unit NAV (Representative) 100.0 84.1*
Portfolio: EIP
CAGR: Portfolio return (9.8)
Index: S&P CNX 500 5,091.1 3,913.1CAGR Index return (14.6)
Index: BSE Midcap 8,426.5 5,907.9CAGR Index return (19.2)
Alpha vs. S&P CNX 500CAGR 4.8
Alpha vs. BSE MidcapCAGR 9.3
Portfolio performance
* Source: Anand Rathi PWM
Portfolio performance since inception
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Portfolio performance since inception
99.8
96.1 96.6
89.6
84.1
97.1
90.9
86.9
82.8
76.9
92.6
81.6
82.1
74.7
70.1
60
65
70
75
80
85
90
95
100
105
EIP Aggr NAV CNX500 BSE Midcap
Emerging India Portfolio
(Performance Since Inception)
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