[PPT] - 1 Index of presentation SECTION 1: Sundaram Blue Chip Fund Slides PowerPoint Presentation

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SLIDE 2

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Index of presentation

➢ SECTION 1: Sundaram Blue Chip Fund – Slides 3 to 24 ➢ SECTION 2: Economy Update & Outlook – Slides 25 to 41 ➢ SECTION 3: Market Outlook – Slides 42 to 48

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WHY SUNDARAM BLUECHIP FUND?

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Large caps are the top 100 companies by market capitalization in India(SEBI definition).

Large caps are attractive for the following reasons.

Proven business models
Size matters – benefits of scale and competitive moats that come in from size
Stability across business cycles
Management bandwidth is wide and deep
Strong balance sheets aid ability to acquire capabilities and growth through M&A
High liquidity
Well-researched universe

Why are LARGECAPS attractive?

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How consistent is the return potential in LARGECAPS?

Nifty 50 Long Term Returns

Large caps have consistently compounded over long term (11% CAGR over 15 and 20 years)

The data is taken from Aug 2000 to Aug 2020 for Nifty 50

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NIFTY 50 TTM PE

5.0

10.0 15.0 20.0 25.0 30.0 03/2011 06/2011 09/2011 12/2011 03/2012 06/2012 09/2012 12/2012 03/2013 06/2013 09/2013 12/2013 03/2014 06/2014 09/2014 12/2014 03/2015 06/2015 09/2015 12/2015 03/2016 06/2016 09/2016 12/2016 03/2017 06/2017 09/2017 12/2017 03/2018 06/2018 09/2018 12/2018 03/2019 06/2019 09/2019 12/2019 03/2020 06/2020 TTM PE (Nifty Ex-Top10) Nifty TTM PE

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HOW IS VOLATILITY IN LARGECAPS?

Category Rolling returns 3 years 5 years 10 years Nifty 100 Nifty Mid Cap 100 Nifty Small Cap 100 Nifty 100 Nifty Mid Cap 100 Nifty Small Cap 100 Nifty 100 Nifty Mid Cap 100 Nifty Small Cap 100

Maximum 48% 50% 70% 25% 25% 30% 18% 20% 22% Average 13% 14% 12% 11% 13% 10% 11% 13% 10% Minimum

8%
14%
21%
2%
3%
10%

4% 4%

1%

* Latest inception date is Nifty Small Cap 100 Index on 01-01-2004; Total Observations: 3 years: 4,992; 5 years: 4,261; 10 years: 2,435

The upside of returns is higher in Midcap and Smallcap but with high volatility which is not the case with large caps
Stable returns is seen in large caps across horizons with relatively lower drawdowns
Data is taken from Jan 2004* to Aug 2020

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WHY STOCK PICKING MATTERS IN LARGECAPS?

CAGR 1 Year 2 Years 3 Years 5 Years 6 Years 7 Years

Bluechip Category Average

6.20 0.61 5.36 8.94 9.29 14.33

Large Cap Category Average

4.56 (0.39) 3.94 8.00 8.45 14.05

S&P BSE 100 TRI Returns

4.29 (0.99) 4.97 8.60 7.56 12.74 Excess Returns 1 Year 2 Years 3 Years 5 Years 6 Years 7 Years

Bluechip Category Vs Large Cap Avg

1.64 1.00 1.42 0.94 0.84 0.27

Bluechip Category Vs S&P BSE 100 TRI

1.91 1.60 0.39 0.34 1.73 1.59

Source: Value Research. The Bluechip Category refers to the funds with “Bluechip” in their name. Currently, there are 7 funds with the name Bluechip. The returns considered are of Direct Plans as of August 31, 2020

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WHY STOCK PICKING MATTERS IN LARGECAPS?

Nifty 50 returns vs consistent 30 stocks returns

234 80 105 130 155 180 205 230 255 280 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Nifty levels Consistent 30 stocks 282

Note: Data is taken from CY09 to CY19 for calculation purposes. Calculation methodology: 30 stocks that were consistently present in Nifty 50 between CY09 and CY19 are taken. Cumulative market cap performance of the stocks are rebased to 100 and compared with Nifty 50 levels rebased to 100. 30 stocks that are consistently present on Nifty 50 (for the past 10 years) have delivered higher returns compared to Nifty 50 index

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WHY STOCK PICKING MATTERS IN LARGECAPS?

Nifty 100 returns vs consistent 46 stocks returns Note: Data is taken from CY09 to CY19 for calculation purposes. Calculation methodology: 46 stocks that were consistently present in Nifty 100 between CY09 and CY19 are taken. Cumulative market cap performance of the stocks are rebased to 100 and compared with Nifty 100 levels rebased to 100. 46 stocks that are consistently present on Nifty 100 (for the past 10 years) have delivered higher returns compared to Nifty 100 index

50 75 100 125 150 175 200 225 250 275 300 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 NSE100 levels Consistent 46 stocks 240 289

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SOME EXAMPLES OF LARGE CAPS..

.. Which Have Compounded In The Long Term

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DILIGENT AND DISCIPLINED INVESTMENT PROCESS

Fund Mangers+ Economist Fund Mangers+ Economist

RESEARCH TEAM

External Research Published Information Company Visit Recommended List Idea Generation Fundamentals & Management Assessment Internal Investment Committee Norms Executive Committee APPROVED BUY LIST Sector and Stock Limits/ Issuer & Security Allocation Limits Fund Themes/ Fund Positioning

STOCK/ SECURITY SELECTION

Bottom-Up Stock Picking/ Asset Quality Evaluation & External Ratings T

p-Down

Approach

Best Trade Execution Risk Management

Fund Portfolio

Diversification Liquidity

Idea Flow & Research Approval

f Stocks/ Securities

Portfolio Construction

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FUND STRATEGY

Investing style – Diversified. There is likely to be 45-50 stocks Benchmark: NIFTY 100 TRI SEBI Category: Large cap Midcap contribution will be maximum at 20% Portfolio construction will be based on bottom-up fundamental stock picking blended with top-down sectoral and macro trends

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BEDROCK OF THE FUND

Sundaram Bluechip Fund (Large Cap Fund)

Diversified (No of Stocks, Concentration Risk, Sector Bands) Three pronged Bluechip Quality Framework

Blend of Growth and Value

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SECTOR SELECTION

DIVERSE PERFORMANCE ACROSS SECTORS

Source: Bloomberg; Calculation: In house; Data is based on CY

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

BSE Auto

2.7

56.9

204.2 37.6

20.4

40.3 7.3 52.0

0.6

9.4 32.1

22.1
11.3

BSE Bankex

61.1

52.2

83.9 33.4

31.6

56.7

9.4

65.0

9.9

7.3 39.1 5.3 20.7

BSE Capital goods

117.3

65.0

104.3 9.2

47.7

34.7

5.6

50.4

8.5
3.3

40.0

1.6
10.0

BSE Consumer Durables

94.6

72.5

97.8 67.9

16.9

46.1

24.6

66.2 24.0

6.3

101.9

8.8

20.9

BSE FMCG

25.1

21.2

46.6 27.8 2.4 45.6 10.4 19.2 2.2 3.3 31.5 10.6

3.6

BSE Healthcare

17.3

35.3

75.9 33.5

14.2

37.2 21.1 48.4 15.3

12.9

0.5

5.9
3.5

BSE IT

10.4
52.8

133.6 26.2

17.6

0.8 55.2 17.6 4.3

8.0

10.8 24.9 9.8

BSE Metals

121.5

74.0

233.7 1.1

47.2

19.1

10.0

7.9

31.2

36.7 47.8

20.7
11.9

BSE Oil & Gas

115.3

54.5

73.1 1.2

29.0

13.1 3.7 12.0

3.4

27.2 34.0

15.6

7.2

BSE Power

122.1

59.8

74.3

6.3
39.9

10.9

14.6

23.0

6.4

1.5 19.8

16.1
3.6

BSE Realty

82.1

69.5

25.9
51.8

53.4

32.1

8.5

13.6
6.0

106.4

31.1

26.8

BSE Utilities

153.0

56.0

71.4

5.8
34.3

10.2

13.7

20.4

4.0

10.2 29.7

14.9
7.3

BSE100

59.7

55.3

85.0 15.7

25.7

30.0 5.9 32.3

3.2

3.6 31.5 1.2 9.6

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KEY SECTOR CALLS OVER CY 17-19

Top Performers Bottom Performers

Over weight Under weight

2017 2018 2019

Healthcare
IT
IT
Financials
Metals
Healthcare
Financials
Consumer

Staples

Telecom
Metals
Financials
Consumer Staples
Consumer

Discretionary

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STOCK SELECTION STRATEGY

Centered around “3 pronged BLUECHIP QUALITY “ framework ” Quality of management

Capable and credible management teams

with strong corporate governance

Quality of business model

Strong competitive positioning & sustainable

competitive advantage

Strong process and systems which come

with scale and size

Strong franchise which has seen many

business cycles

Quality of financials

Attractive ROE/ROCE
Strong cash flow generation
Healthy balance sheets

It will be a blend of GROWTH & VALUE STOCKS

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BLUECHIP FUND- RISK-RETURN POSITIONING

Return Low Risk to High Risk Low Return to High Return Liquid Short Duration Medium Duration Conservative Hybrid Equity Savings Fund Equity Large Cap Equity Multi Cap Equity Mid Cap Equity Small Cap Thematic/Sectoral Aggressive Hybrid

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SUITABILITY TO INVESTORS

Capital appreciation over medium to long term with lower volatility

Need

Investment in equity and equity-related securities of large cap companies

Solution

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SELECT FOCUS VS BLUECHIP

Portfolio construction will be different on the following risk elements and metrics while both products will focus on the large cap market cap curve (80-100% in large caps) Fund/Category Select Focus/Focused Bluechip/Large cap

Number of stocks Portfolio style 30 stocks Concentrated ~45-50 stocks Diversified Risk-reward Concentration risk Relatively higher Risk is higher in Focus with top 10 stocks forming ~60% of the portfolio Diversification reduces volatility Risk is lower in Bluechip with top 10 stocks forming ~40-45%

f the portfolio

Extent of Underweight/ Overweight Investing style Focus will continue to take a few high conviction bets with larger overweight and underweight in stocks & sectors and sometimes being absent in certain benchmark sectors and stocks GARP bias Bluechip will be more diversified across sectors and stocks. Extent of overweight and underweight – in sector bands & stock bands will be narrower in Bluechip vs Focus – thus closer to benchmark, yet active and not too passive Blend of growth & value Benchmark Nifty 50 TRI Nifty 100 TRI

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TATA CONSUMER PRODUCTS – CASE STUDY

Profile

Tata Consumer Products is the second largest branded tea company in the world

with brands like Tata Tea (No.2 in India with 20% share) and Tetley (No.1 in Canada and No.3 in UK), largest salt company in India (30% share) with its Tata Salt brand, a growing presence in other branded staples through Tata Sampann, presence in US coffee through EOC and coffee plantations and exports through Tata Coffee, presence in water through Nourishco and cafes through Starbucks JV

Merger of salt/foods business has multiplied addressable market and improved

growth visibility in India. Appointment of a new CEO with a strong track record bodes well for execution and aggressive restructuring in international businesses Key Catalysts

Post the merger and resultant distribution expansion will drive higher penetration of

Tata Tea and Tata Salt and facilitate new brand launches

Strong growth opportunities for Tata Sampann in branded pulses and spices given

low penetration and distribution synergies; strong long-term prospects for Starbucks given limited competition

Margins can keep improving structurally with portfolio premiumization, exit from loss

making geographies and improved cost efficiencies and synergy benefits

Ongoing managerial transformation should bring about much sharper execution,

more efficient incremental capital allocation and better operating metrics in international businesses

50

100 150 200 250 300 350 400 Jan-17 Mar-17 May-17 Jul-17 Sep-17 Nov-17 Jan-18 Mar-18 May-18 Jul-18 Sep-18 Nov-18 Jan-19 Mar-19 May-19 Jul-19 Sep-19 Nov-19 Jan-20 Mar-20 May-20 Jul-20 Tata Consumer NSE100 INDEX

Price Performance – Tata Consumer Vs NIFTY 100

Curr Price/M Cap (Rs cr) TATA CONSUMERPRODUCTS 548 50468 Financial Summary : FY17 FY18 FY19 FY20 FY21E FY22E Revenue 6780 6815 7252 9637 10707 11588 EBITDA 791 839 786 1292 1561 1796 PAT 384 517 490 735 761 1080 EPS 6.1 8.2 7.8 8.0 8.3 11.7 EBITDA Margin % 11.7 12.3 10.8 13.4 14.6 15.5 ROCE % 9.7 9.7 8.8 8.9 8.3 9.4 RoE % 7.3 8.9 7.1 7.7 6.9 8.0 P/E (x) 90.0 66.9 70.5 68.7 66.3 46.7

CAGR 42.6% CAGR 7.1%

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BHARTI AIRTEL – CASE STUDY

Profile

Bharti Airtel is the second largest wireless operator by revenue in India. It offers its

services using 4G/3G/2G technology to ~280 mn customers. Bharti Airtel is also the largest Enterprise service provider in India catering to most of the large corporates. Other businesses of Bharti include Home broadband services, DTH services, Tower/fiber infrastructure services

Through its subsidiary Airtel Africa Plc, Bharti Airtel offers communication services to

14 African countries. Besides Voice/Data, Airtel Africa also provides financial services through its “Airtel Money” for money transfer, cash withdrawals, microloans, ecommerce etc Key Catalysts

Duopolistic structure of India wireless market whose size is estimated at Rs. >2.4 tn

p.a.

Potential increase in ARPU both organically (2G to 4G upgrades) and inorganically

(large tariff hikes)

Stabilizing capex resulting in high visibility of large positive FCF and corresponding

deleveraging of balance sheet

Proven track record of execution within the constraints of technology & balance

sheet Price Performance – Bharti Vs NIFTY 100

20

40 60 80 100 120 140 160 180 200 Jan-17 Mar-17 May-17 Jul-17 Sep-17 Nov-17 Jan-18 Mar-18 May-18 Jul-18 Sep-18 Nov-18 Jan-19 Mar-19 May-19 Jul-19 Sep-19 Nov-19 Jan-20 Mar-20 May-20 Jul-20 BHARTI NSE100 INDEX

Curr Price / M Cap (Rs cr) BHARTI AIRTEL 520 2.87tn Financial Summary : FY17 FY18 FY19 FY20 FY21E FY22E Revenue 8,26,388 8,13,359 8,75,388 9,99,100 11,23,293 8,26,388 EBITDA 3,00,791 2,64,427 3,65,724 4,46,370 5,28,469 3,00,791 PAT 10,990 10,333

3,13,608
99,198

30,141 10,990 EPS 2.0 1.9

57.4
18.2

5.5 2.0 EBITDA Margin % 36 33 42 45 47 36 ROCE % 6% 3% 4% 6% 9% 6% RoE % 1% 0% 3%

1%

2% 1% P/E (x) 273.2 290.6

9.6
30.3

99.6 273.2

CAGR 17.9% CAGR 7.1%

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SBI LIFE INSURANCE – CASE STUDY

Profile

SBI Life enjoys strong brand recall due to its parentage bank – SBI and the bank

has unparalleled banca network of +20,000 branches where penetration is much

lower. SBI Life hence has been able to center its products in line with customer base
f SBI which are more conservative and has large non-metro base. With this as

base, company has been successfully doing Return of Premium products, ULIP growth has been better than industry as product construct has been higher towards Debt (as non-metro customers are non-equity centric) and also has strong group product presence especially group credit life (as bank is largest retail player) making its products suite quite diverse compared to some of the peers. On back of same, SBI is 2nd largest player in industry and 1st amongst the private player having 23% market share. Key Catalysts

SBI Life Insurance has been a strong growth story since its parent (SBI) increased

its focus on cross-selling, four years ago. A key strength for SBI life is its strong and under-penetrated distribution network, in our view; we expect this to continue to drive strong growth and market share gains

Cost economics of SBI's bancassurance channel are superior to that of other large

bancassurance relationships, which should drive strong profitability

We expect sustained improvement in margins, driven by: a) cost efficiency, b)

continued improvement in individual persistency, and c) increased focus on individual protection business and annuity

Reasonable valuations with strong EV compounding. Visibility for medium-term VNB

CAGR of 20%+ and 16-17% operating RoEV Price Performance – SBILIFE Vs NIFTY 100

20

40 60 80 100 120 140 160 Sep-17 Nov-17 Jan-18 Mar-18 May-18 Jul-18 Sep-18 Nov-18 Jan-19 Mar-19 May-19 Jul-19 Sep-19 Nov-19 Jan-20 Mar-20 May-20 Jul-20 SBILIFE NSE100 INDEX Curr Price / M Cap (Rs cr) SBI LIFE 860 86000 Financial Summary: FY17 FY18 FY19 FY20 FY21E FY22E EV (Rs. bn) 190.7 224.0 262.7 301.7 347.6 402.1 P/EV Ratio 4.51 3.84 3.27 2.85 2.47 2.14 NBV 13.9 17.2 20.1 19.5 23.7 28.4 NB (x) 38.9 31.6 30.4 23.7 19.0 14.9 EVOP (Rs. bn) 29.6 33.2 45.8 41.5 48.9 58.0 P/EVOP Ratio 29.05 25.89 18.78 20.70 17.60 14.83 EPS (Rs.) 11.5 13.3 14.8 17.1 19.9 23.3 PE Ratio 74.76 64.82 58.30 50.23 43.12 36.89 BV / Share (Rs.) 65.3 75.8 87.4 102.0 118.9 138.7 P/ BV 13.17 11.35 9.84 8.43 7.23 6.20 Mcap / AUM (%) 0.75 0.62 0.54 0.45 0.38 0.32 Mcap (Rs. bn.) 860.0 860.0 860.0 860.0 860.0 860.0

CAGR 10.1% CAGR 3.6%

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FUND FACTS

Fund Sundaram Bluechip Fund

Scheme Type Open ended equity scheme investing in large cap stocks Investment Objective To generate capital appreciation by investing in large cap stocks Benchmark Nifty 100 TRI Index Fund Managers Rahul Baijal and Krishnakumar S Plans & Options Plans: Regular and direct Options: Growth, Dividend Minimum Application amount For both regular and direct plans, Rs.100/- and multiples of Re.1/- and for additional purchase of Rs.100/- & multiples of Re.1/- thereafter Exit Load

For redemption within 12 months from the date of allotment- 1%
For redemption on or after 12 months from the date of allotment- Nil

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SECTION 2 PRESENTATION ON ECONOMY

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India Hope is back

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COVID-19 has disrupted global growth and the pandemic’s widespread and emergency lock downs have taken its toll on

growth and earnings

We see a gradual global economic recovery from Q3CY20; vaccine success could quicken the pace amidst the significant

fiscal and monetary stimulus seen

India has opened up its economy with strong monetary support and a 10.5% GDP economic package; with focus on supply-

side and sustainable growth

Supply normalization would bring to fore the inherent consumption trends and the improvement in economic activity will help

alleviate financial system stress

Amidst the temporary income disruption created by the pandemic, we see rural India and the middle-income urbanite as

segments of strengths

COVID-19 has made the India manufacturing case stronger on the growing global need to de-risk
India remains in focus within the EM pack, as Indian businesses remain attractive amidst depressed earnings, and Indian

markets see many beaten down stocks with potential for bounce

Tempered Optimism

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On the path of a ‘V’ shaped recovery, EM to normalize well before DM

Global Real GDP direction

IMF revised lower its growth projection to (4.9)%contraction in 2020 with a subsequent pickup of 5.4% in 2021
Most of the damage from COVID-19 disruption is set to be contained in H1, with a recovery set in H2 2020
However, the pace and extent of the recovery continues to hinge on the infections curve and any possible second wave on infections

Source: IMF, Sundaram Asset Management

85 90 95 100 105 110 115 2019: Q1 2019: Q2 2019: Q3 2019: Q4 2020: Q1 2020: Q2 2020: Q3 2020: Q4 2021: Q1 2021: Q2 2021: Q3 2021: Q4 World Advanced Economies EM and developing economies ex-China China

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Global manufacturing has started the process of expansion

Quite contrary to the gloom and doom narrative heard from select segments, the global manufacturing PMIs have moved back into expansion mode
The PMI rebound appears to be a clear indication that this was a much shorter manufacturing recession than was expected by the markets

Source: Morgan Stanley, Sundaram Asset Management

% of economies with improving manufacturing PMIs vs. previous month

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Jul-06 Jul-08 Jul-10 Jul-12 Jul-14 Jul-16 Jul-18 Jul-20 Monthly 3MMA

Manufacturing PMI comparison

82% 76%

30 35 40 45 50 55 60 Jul-18 Dec-18 May-19 Oct-19 Mar-20 Aug-20 US China EU

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Post services normalization, China demand normalization underway

Sales of trucks and passenger cars have witnessed steady progress in China and other short frequency indicators have also seen a steady holding up of economic activity
On the services side almost all sectors have normalized on operating capacities. Demand normalization has currently improved to 80-90%

Source: Morgan Stanley, Sundaram Asset Management

China activity holding up across sectors China heavy truck sales and passenger car sales (%y/y)

20 40 60 80 100 120 140 160 180 200 20 40 60 80 100 120 140 160 180 200 08-Jan 05-Feb 04-Mar 01-Apr 29-Apr 27-May 24-Jun 22-Jul 19-Aug Property Sales Hotel Occupancy Auto Sales Domestic Flights Smartphone Sales Subway Passenger Box Office Cement Shipment Heavy Truck Sales Rebar Demand

60
40
20

20 40 60 80

85
65
45
25
5

15 Aug-19 Oct-19 Dec-19 Feb-20 Apr-20 Jun-20 Aug-20 Daily Average Passenger Car Sales (4-week average) Heavy Truck Sales (RS, Monthly)

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Short frequency indicators see green shoots globally

Source: Morgan Stanley, Sundaram Asset Management

Transit trends picking up for many other countries Driving trends at pre-COVID levels for these countries

50 100 150 200 250 2/18 3/3 3/17 3/31 4/14 4/28 5/12 5/26 6/9 6/23 7/7 7/21 8/4 8/18 9/1 United States Germany Italy Brazil Russia France

Global scheduled flights (‘000) US ISM new orders for manufacturing and services

Apple Mobility Trends Report–Driving (Jan 13=100), 7-day moving average 200 173 150 144 97 Apple Mobility Trends Report–Transit (Jan 13=100), 7-day moving average 179 133 106 83 55 51

77 82 87 92 97 102 2008 2020

Jun-08 Jun-20 Jun-20e: 101.6 Mar-11

Mo 2 4 6 8 10 12 14 16 18 20 22 24 28 30 32 20 30 40 50 60 70 80 90 3/4 3/18 4/1 4/15 4/29 5/13 5/27 6/10 6/24 7/8 7/22 8/5 8/19 40 80 120 160 2/18 3/3 3/17 3/31 4/14 4/28 5/12 5/26 6/9 6/23 7/7 7/21 8/4 8/18 United States Germany Italy Brazil France

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Short frequency indicators see signs of normalisation in India

Tractor sales, %y/y Two wheelers and passenger vehicles, %y/y Jeffries TV Ads Index Electricity consumption trend (%y/y)

100%
80%
60%
40%
20%

0% Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Two Wheelers, YoY Passenger Vehicles YoY

12% -16%

0%

3%
15%

1%

38%

5%

38%
84%

1% 15% 24%

100%
80%
60%
40%
20%

0% 20% 40% Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 50 70 90 110 130 01-Jan-20 08-Jan-20 15-Jan-20 22-Jan-20 29-Jan-20 05-Feb-20 12-Feb-20 19-Feb-20 26-Feb-20 04-Mar-20 11-Mar-20 18-Mar-20 25-Mar-20 01-Apr-20 08-Apr-20 15-Apr-20 22-Apr-20 29-Apr-20 06-May-20 13-May-20 20-May-20 27-May-20 03-Jun-20 10-Jun-20 17-Jun-20 24-Jun-20 01-Jul-20 08-Jul-20 15-Jul-20 22-Jul-20 29-Jul-20 05-Aug-20 12-Aug-20 19-Aug-20 26-Aug-20 Ad Insertions Index 7 per.Mov.Avg.(Ad Insertions Index)

Source: Jeffries, Morgan Stanley, Motilal Oswal, Sundaram Asset Management

Pre-lockdown March-3% Strict-lockdown-24% Unseasonal rains

16%

(35) (30) (25) (20) (15) (10) (5) 5 10 15 01-Feb-20 16-Feb-20 02-Mar-20 17-Mar-20 01-Apr-20 16-Apr-20 01-May-20 16-May-20 31-May-20 15-Jun-20 30-Jun-20 15-Jul-20 30-Jul-20

(%)

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Freight movement reflects continued recovery in July

Daily average freight carried by trains (% of level seen last year)

Freight movement in July has seen an appreciable recovery in multiple key segments, cement, steel, coal and fertilizers from their April levels
Jul'20 witnessed a 98% pickup in the daily average freight carried by trains compared to their levels seen in Jul'19
Similarly, steel is at 114%, coal at 84%, fertilizers at 115% and food grains at 169%

Source: Spark Capital, Sundaram Asset Management

120% 74% 9% 92% 119% 98% Cement 112% 88% 50% 85% 101% 114% Steel 101% 86% 66% 69% 77% 84% Coal 105% 71% 82% 98% 105% 115% Fertilizers 103% 86% 65% 79% 92% 95% Total Freight

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Unemployment drops to pre-COVID levels on business resumption

CMIE unemployment statistics have witnessed a sharp drop from their peak seen in the first week of May
From a pre-COVID average of 7.5%, headline unemployment surged to 27% and have seen a secular drop since
Urban unemployment has dropped to 9.6% (from 29%) and rural has dropped to 8.7% (from 26%) as of 16th August
Easing lockdowns, kharif sowing season and the MNREGA program are the likely drivers behind this move
Nomura’s business resumption index has also witnessed a sustained pickup, gradually nearing pre-Lockdown levels

Source: CMIE, Jeffries, Sundaram Asset Management

Jeffries economic activity indicator CMIE Unemployment statistics

5 10 15 20 25 30 35 30-Jun-19 21-Jul-19 11-Aug-19 01-Sep-19 22-Sep-19 13-Oct-19 03-Nov-19 24-Nov-19 15-Dec-19 05-Jan-20 26-Jan-20 16-Feb-20 08-Mar-20 29-Mar-20 19-Apr-20 10-May-20 31-May-20 21-Jun-20 12-Jul-20 02-Aug-20 23-Aug-20 India Urban Rural 50 60 70 80 90 100 110 01-Jan-20 06-Jan-20 11-Jan-20 16-Jan-20 21-Jan-20 26-Jan-20 31-Jan-20 05-Feb-20 10-Feb-20 15-Feb-20 20-Feb-20 25-Feb-20 01-Mar-20 06-Mar-20 11-Mar-20 16-Mar-20 21-Mar-20 26-Mar-20 31-Mar-20 05-Apr-20 10-Apr-20 15-Apr-20 20-Apr-20 25-Apr-20 30-Apr-20 05-May-20 10-May-20 15-May-20 20-May-20 25-May-20 30-May-20 04-Jun-20 09-Jun-20 14-Jun-20 19-Jun-20 24-Jun-20 29-Jun-20 04-Jul-20 09-Jul-20 14-Jul-20 19-Jul-20 24-Jul-20 29-Jul-20 03-Aug-20 08-Aug-20 13-Aug-20 18-Aug-20 23-Aug-20 28-Aug-20 Index Level (100 = Historical norms)

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Kharif sowing progressing well, better than last season

India has seen a sharp jump in its Kharif sowing that appears to have come on the back of an early start of the monsoon
The government's decision to give a heads up to the farmers through an early MSP announcement also appears to have helped, alongside .record Rabi procurement
Kharif sowing has witnessed robust progress and sowing so far, promises to be much better than the 2019 kharif sowing season

Source:Nirmal Bang, Sundaram Asset Management

Kharif sowing area as a % of normal area sown (Annual) Kharif sowing area as a % of normal area sown (this season)

(% of Actual area sown) (% of Actual area sown) 84 86 88 90 92 94 96 98 100 102 30-Aug-13 29-Aug-14 28-Aug-15 02-Sep-16 01-Sep-17 31-Aug-18 30-Aug-19 28-Aug-20 20 40 60 80 100 120 05-Jun-20 12-Jun-20 19-Jun-20 26-Jun-20 03-Jul-20 10-Jul-20 17-Jul-20 24-Jul-20 31-Jul-20 07-Aug-20 14-Aug-20 21-Aug-20 28-Aug-20

SLIDE 36

36

RBI’s resolution framework to ease borrowers’ debt burden

The RBI’s announcement of a resolution framework is in lieu of a third moratorium that the markets were expecting. Another moratorium would have only increased the opacity of the system The framework comes with key guiding principles that helps prevent the dilution of the exercise:

Upfront costs
Ensuring time discipline on implementation
Proposes an independent expert committee to oversee the entire process

This ensures that the banks and parties involved engage in a responsible manner with very little room to maneuver Broadly, the framework ensures three activities:

A third party in place recommending operational guidelines
An expert committee vetting the resolution plans for loans beyond a certain threshold
Close monitoring of post implementation progress

All of the above helps to increase credibility of the resolution exercise and make sure that the participants are responsible and accountable

SLIDE 37

37

We expect a ‘V’ shaped recovery for India, with positive Q4 growth

Source : Citi, Sundaram Asset Management

The recent market narrative around a growth contraction in FY21 are based on: a) observation of sizeable economic activity in hotspots b) delay in recovery on account of social

distancing c) labour challenges ahead d) limited fiscal power

Along side the sizeable guarantees announced, unlock 4 would be the key catalyst for increased trade activity
We expect more fiscal measures as the Indian economy normalizes and peg FY21 growth in the range of -6% to -7%

6.3 5.8 6.5 7.6 8.2 7.1 6.2 5.6 5.7 5.2 4.4 4.1 3.1

23.9
9.1
1.7

1.9

27
22
17
12
7
2

3 8 13 Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 Jun-19 Sep-19 Dec-19 Mar-20 Jun-20 Sep-20 Dec-20 Mar-21 Real GDP

Forecast

Real GDP trajectory (%y/y)

SLIDE 38

38

INDIA STRUCTURAL POSITIVES WELL IN PLACE

SLIDE 39

39

Crude price drop a blessing during tough times

Source: Citi, CMIE, Sundaram Asset Management

Quarterly CAD (%GDP) Average crude price movement

The drop in the price of crude has come as a blessing for India’s fiscal which is

under significant pressure

Like witnessed during the 2014 drop in crude prices, the government has raised

excise duty on fuel that will help mop 0.8-1% of GDP

Every $10 drop in the price of crude brings down India’s current account deficit

by 0.5% GDP

Do note here that despite the weak backdrop, FDI flows into India accounted for

3.3% of global FDI flows in 2019 Gross FDI flows at an all time high (Trailing 12M, USD Bn.)

50
30
10

10 30 50 20 40 60 80 100 120 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21E USD/barrel %y/y (RHS)

7.0
6.0
5.0
4.0
3.0
2.0
1.0

0.0 1.0 2.0 Mar-06 Sep-06 Mar-07 Sep-07 Mar-08 Sep-08 Mar-09 Sep-09 Mar-10 Sep-10 Mar-11 Sep-11 Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 Sep-15 Mar-16 Sep-16 Mar-17 Sep-17 Mar-18 Sep-18 Mar-19 Sep-19 Mar-20 10 20 30 40 50 60 70 80 Apr-96 Apr-97 Apr-98 Apr-99 Apr-00 Apr-01 Apr-02 Apr-03 Apr-04 Apr-05 Apr-06 Apr-07 Apr-08 Apr-09 Apr-10 Apr-11 Apr-12 Apr-13 Apr-14 Apr-15 Apr-16 Apr-17 Apr-18 Apr-19 Apr-20

SLIDE 40

40

Tax rates and improved EoDB rankings a big positive for India

India’s corporate tax rate is the lowest among its EM peers. With the domestic pull factors for FDI well in place, lower corporate tax rates would be an added positive
Further, India is the most improved in its Ease of Doing Business (EoDB) rankings among its EM peers

Source: UBS, Sundaram Asset Management

EoDB rankings change over the last five years (2015-20) Corporate tax rate (%)

35% 25% 17% 0% 5% 10% 15% 20% 25% 30% 35% 40% India (Old) India (new) India (new mfg firm) Singapore Poland Thailand Vietnam Camboodia Russia Taiwan Malaysia Indonesia Myanmar China South Korea South Africa Philippines Argentina Mexico Brazil

18 -13
4
1
1

1 1 2 2 4 5 23 25 26 47 52 79

40
20

20 40 60 80 100 Mexico Brazil Taiwan Singapore South Korea United States Japan Hongkong Philippines Bangladesh Malaysia Vietnam Thailand Russia Indonesia China India

SLIDE 41

41

India’s structural consumption boost for next 30+ years

India’s working age population will be growing faster than its dependent population, adding a structural boost for consumption
This bulge in working age population is here to stay for at least the next 30+ years until 2050
It was during this very phase that Japan, South Korea and Singapore reaped their growth benefits
COVID-19 appears to have pushed more companies into making relocation decisions, with surveys indicating 40% of companies planning to make a decision within the next six months

Source: UN, Sundaram Asset Management

India and China working age populations (Mn.)

200 400 600 800 1,000 1,200 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100 0% 10% 20% 30% 40% 50% 60% 70% Ramping up production with existing facilities outside mainland China Investing in new production facilities outside mainland China Both of the above Dec-2018 Mar-2020

SLIDE 42

42

SECTION 3 PRESENTATION ON MARKETS

SLIDE 43

43

Nifty Earnings growth

Nifty PAT growth (% y/y)

Source: Bloomberg, Sundaram Asset Management

30
20
10

10 20 30 Dec-14 Mar-15 June-15 Sep-15 Dec-15 Mar-16 June-16 Sep-16 Dec-16 Mar-17 June-17 Sep-17 Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 Jun-19 Sep-19 Dec-19 Mar-20 Jun-20 NIFTY NIFTY Ex-Financials 131 169 184 236 281 251 247 315 348 369 406 413 394 423 451 483 466 471 660 100 200 300 400 500 600 700 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21E FY22E

FY04-08: 21% CAGR FY08-18: 5% CAGR FY18-21E: 1.5% CAGR

SLIDE 44

44

Nifty Earnings and Valuations – A split perspective… still reasonable

Source: Bloomberg, Sundaram Asset Management

5.0

10.0 15.0 20.0 25.0 30.0 03-2011 11-2011 07-2012 03-2013 11-2013 07-2014 03-2015 11-2015 07-2016 03-2017 11-2017 07-2018 03-2019 11-2019 07-2020 TTM PE (Nifty Ex-Top10) Nifty TTM PE TTM PE (Nifty Ex-Top10, Avg) Nifty TTM PE, Avg

5.0

10.0 15.0 20.0 25.0 30.0 03-2011 11-2011 07-2012 03-2013 11-2013 07-2014 03-2015 11-2015 07-2016 03-2017 11-2017 07-2018 03-2019 11-2019 07-2020 Fwd PE (Nifty Ex-Top10) Nifty Fwd PE Fwd PE (Nifty Ex-Top10, Avg) Nifty Fwd PE, Avg

SLIDE 45

45

Relative valuations and performance

Source: Bloomberg, Sundaram Asset Management, Citi Research

1 2 3 4 5 6 7 1996 1999 2002 2005 2008 2011 2014 2017 2020 MSCI India PB LTA 1 2 3 4 5 6 7 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 MSCI India Mid Cap PB LTA

SLIDE 46

46

Relative valuations and performance

Source: Bloomberg, Forward P/E are on MSCI indices, Sundaram Asset Management, Citi Research

India’s premium over MSCI World and EM Key market returns in CY19% Key market returns in CY20% YTD Key markets (1 yr. Fwd. P/E)

0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% MSCI China MSCI BRIC MSCI Asia ex JP MSCI India MSCI EM Nasdaq Dow Jones MSCI Europe MSCI Japan MSCI AC World MSCI Brazil MSCI USA S&P 500

20.0

0.0 20.0 40.0 60.0 80.0 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Jan-18 Jul-18 Jan-19 Jul-19 Jan-20 Jul-20 India's P/E prem.wrt MSCI World India's P/E prem.wrt MSCI EM

40.0%
30.0%
20.0%
10.0%

0.0% 10.0% 20.0% 30.0% MSCI China MSCI BRIC MSCI Asia ex JP MSCI India MSCI EM Nasdaq Dow Jones MSCI Europe MSCI Japan MSCI AC World MSCI Brazil MSCI USA S&P 500 6.0 11.0 16.0 21.0 26.0 31.0 36.0 Jul-07 Jul-08 Jul-09 Jul-10 Jul-11 Jul-12 Jul-13 Jul-14 Jul-15 Jul-16 Jul-17 Jul-18 Jul-19 Jul-20 S&P 500 MSCI Europe Topix MSCI EM

SLIDE 47

47

Short term corrections, a buying opportunity – Stay Bullish

Source: Bloomberg, Sundaram Asset Management

BSE Mid-cap and Small-cap movement against the Sensex

500 1,000 1,500 2,000 2,500 3,000 Apr/20 Sep/20 Feb/20 Jul'04 Dec/20 May/20 Oct/20 Mar/20 Aug/20 Jan/20 Jun/20 Nov/20 Apr/20 Sep/20 Feb/20 Jul/20 Dec/20 May/20 Oct/20 Mar/20 Aug/20 Jan/20 Jun/20 Nov/20 Apr/20 Sep/20 Feb/20 Jul/20 Dec/20 May/20 Oct/20 Mar/20 Aug/20 Jan/20 Jun/20 Nov/20 Apr/20 Sep/20 Feb/20 Jul/20 Dec/20 May/20 Sensex Midcap Smallcap Phase 1 Phase 2 Phase 3 Phase 4 Phase 5 Begin End % Returns Begin End % Returns Begin End % Returns Begin End % Returns Begin End % Returns Apr-03 Jan-08 Jan-08 Oct-13 Oct-13 Dec-17 Dec-17 Mar-20 Mar-20 Aug-20 BSE Sensex 3,168 20,873 559 20,873 21,165 1 21,165 34,057 61 34,057 25,981

24

25,981 38,628 49 BSE Midcap Index 950 9,817 934 9,817 6,107

38

6,107 17,822 192 17,822 9,711

46

9,711 14,661 51 BSE Small Cap Index 885 13,516 1,427 13,516 5,896

56

5,896 19,231 226 19,231 8,873

54

8,873 14,991 69

SLIDE 48

48

2020 has largely been disrupted by the pandemic; however we expect an appreciable recovery in H2 on the back of large

monetary and fiscal stimulus

A supportive global backdrop would help improve the effectiveness of India’s monetary and fiscal response
Agriculture and rural India is likely to be shielded largely by the pandemic and the rural bias witnessed in government programs

would add a fillip to the same

Better ToT, price realisations, continued MSP support, Rabi harvests and agri reforms are added positives for rural India
RBI has been quick and frequent to provide the well needed liquidity to the system which would be a prerequisite before the start
f a growth recovery
Government has been deliberate in its fiscal measures, delivering maximum impact/outlay with minimal fiscal cost; rising on the

global trend of guarantees

The four labour codes subsuming the myriad existing laws are witnessing traction on the ground; with MP and UP in significant

move towards liberalization

More focus on power sector, land reforms and ease of doing business are set to attract more FDI flows
Basic driver of consumption is broadly intact; with the necessary easing of logistic restrictions, a consumption recovery would be

a quarter away

It is important to note here that we are still in the phase of supply disruptions; the leg of demand weakness has not set in
The fiscal package of the government announced is set to address this very stress build up in the system
Medical support through treatment with Anti Virals and a potential vaccine discovery could provide support and deliver upsides to

the recovery

Outlook & Expectations

Weak DXY Supportive global liquidity Risk-on as economies unlock

SLIDE 49

49 General Disclaimer: This document is issued by Sundaram Asset Management; an investment manager registered with the Securities and Exchange Board of India and is produced for information purposes only. It is not a prospectus, scheme information document, offer document, offer and solicitation, to name a few, to buy any securities or other

investment. Information and opinion contained in this document are published for the assistance of the recipient only; they are not to be relied upon as authoritative or taken as a

substitution for exercise of judgment by any recipient. They are subject to change without any notice and not intended to provide the sole basis of any evaluation of the instrument discussed or offer to buy. It is neither a solicitation to sell nor shall it form the basis of or be relied upon in connection with any contract or commitment whatsoever or be taken as investment advice. The information and opinions contained in this communication have been obtained from sources that Sundaram Asset Management believes to be reliable; no representation or warranty, express or implied, is made that such information is accurate or complete and it should not be relied upon as such. Sundaram Asset Management neither guarantees its accuracy and/or completeness nor does it guarantee to update the information from time to time. This communication is for private circulation only and for the exclusive and confidential use of the intended recipient(s) only. Any other distribution, use or reproduction of this communication in its entirety or any part thereof is unauthorized and strictly prohibited. By accepting this document you agree to be bound by the foregoing limitations. This communication is for general information only without regard to specific

bjectives, financial situations and needs of any particular person who may receive it and Sundaram Asset Management is not soliciting any action based on this document.

Sundaram Asset Management in the discharge of its functions, may use any of the data presented in this document for its decision-making purpose and is not bound to disclose the

same. Copies of the Statement of Additional Information, Scheme Information Document and application form with key information memorandum may be obtained from the offices of

Sundaram Mutual offices and its authorized distributors or downloaded from www.sundarammutual.com For scheme specific risk factors, asset allocation, load structure, fund facts and taxation aspects please refer scheme information documents available online and at branches/Investor Service Centres; also at www.sundarammutual.com. Statutory: Mutual Fund: Sundaram Mutual Fund is a trust under Indian Trusts Act, 1882. Liability for sponsors is limited to ₹ 1 lakh. Sponsors: Sundaram Finance. Investment Manager: Sundaram Asset Management Company. Trustee: Sundaram Trustee Company.

Disclaimer

Mutual Fund Investments are subject to market risks, read all scheme related documents carefully Private Circulation only

Past performance may or may not be sustained in the future