BRST E Years BRST rillion Dollar T Opportunity Strategy April - - PowerPoint PPT Presentation

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Sep 05, 2022 379 likes •550 views

BRST E Years BRST rillion Dollar T Opportunity Strategy April 2020 N XT of GDP Growth Indias Next Trillion Dollar Your key to BRSTBRST BRST BRST BRST b e r a t i l n e C g About the Strategy 1 NTDOP is a multi-cap

SLIDE 1

BRST

BRSTBRST

Your key to

India’s Next Trillion Dollar

f GDP Growth

N XT

E Opportunity Strategy T rillion Dollar r a b t e i l n e g C Years April 2020

SLIDE 2 About the Strategy 1 NTDOP is a multi-cap strategy investing across market capitalization Investing in businesses that benefit from the Next Trillion Dollar GDP growth of India 12+ years track record with consistent outperformance vis-à-vis benchmark across market cycles (10 out 12 calendar years) Concentrated portfolio of 25 stocks with 16 companies held for over 5 years: a truly ‘Buy and Hold’ strategy Investment Manager Motilal Oswal AMC is the pioneer of PMS business in India with over 16 years of track record One of the co-founders, Mr. Raamdeo Agrawal is one of the most honored and trusted names in the investing world It has a unique positioning of being “Equity only AMC” with defined “Investment Philosophy” Trusted by over 42,000 HNI investors and with around Rs. 12,000 Crs of assets as on 31st March 2020 Index agnostic: ~87% away from benchmark Nifty 500

SLIDE 3 2 186 193 201 218 212 233 249 279 297 296 321 270 288 279 327 360 393 416 421 459 468 485 515 608 709 820 940 1217 1199 1342 1676 1823 1828 1857 2039 2104 2290 2653 2726 2972 3258 3577 3924 4306 4729 500 1000 1500 2000 2500 India GDP (current $ bn) 3000 3500 4000 4500 5000 FY 1980 FY 1981 FY 1982 FY 1983 FY 1984 FY 1985 FY 1986 FY 1987 FY 1988 FY 1989 FY 1990 FY 1991 FY 1992 FY 1993 FY 1994 FY 1995 FY 1996 FY 1997 FY 1998 FY 1999 FY 2000 FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020E FY 2021E FY 2022E FY 2023E FY 2024E 1st US$ tn 2nd US$ tn 3rd US$ tn 4th US$ tn Nearing 5th US$ tn According to World Bank data, India has now become the world’s sixth-largest economy India is one of the fastest growing among major economies Source: statisticstimes.com Past performance may or may not sustain and does not guarantee future performance Note - Above forward looking statements are based on external current views and assumptions and involve known and unknown risks and uncertainties that could affect actual results. Investments are subject to market risk. The above graph is used for illustration purpose only and should not used for development or implementation of an investment strategy. India’s GDP Growth Opportunity

SLIDE 4 Rising Discretionary Spending Discretionary spending is expected to increase disproportionately going forward Discretionary spending will rise from 52% in 2005 to 70% in 2025 56 42 34 25 5 6 5 5 14 12 12 10 2 3 3 3 4 8 9 11 11 17 19 20 1 2 3 6 3 5 6 9 4 7 9 13 1995 2005 2015 2025 E Food, beverages & Tobacco Housing & Utilities Personal Products & Services Transportation Communication Education & Recreation Health Care DISCRETIONARY ITEMS Share of Avg. Household consumption % thousand, INR Necessities Discretionary Items Source: data.gov.in & Motilal Oswal Financial Services Ltd Per Capita Income (In Rs. Thousand) 10,000 30,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 100,000 CAGR of 11.6% CAGR of 9.5% CAGR of 10.5% 110,000 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 3 Above forward-looking graphs/statements are based on external current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results.

SLIDE 5 Consumption

Banks
Capital Markets
Insurance
NBFCs

Banking and Financial Services Government Spending

Power
Cement
Capital Goods
Construction
Engineering

Some Themes that Benefit from GDP Growth These are illustrative in nature and can change from time to time based on the outlook of the portfolio manager.

Consumer Discretionary
Retailing
Consumer Durables
Passenger Vehicles
Utility Services

SLIDE 6 Benefits of Multicap Large Cap Leaders in respective sectors Stability and less volatile Mid Cap High growth Potential of tomorrow’s large caps Small Cap Emerging businesses Offer potential to scale 5

SLIDE 7 Investing in Multicaps Reduces Extremes Large Cap [8.1%] CY2014 CY2015 CY2016 CY2017 CY2018 CY2013 Multicap [6.1%] Mid Cap [-4.0%] Small Cap [-9.7%] Small Cap [71.1%] Mid Cap [56.9%] Multicap [37.4%] Large Cap [33.3%] Mid Cap [8.7%] Small Cap [7.7%] Multicap [-0.2%] Large Cap [-2.7%] Mid Cap [9.3%] Multicap [5.4%] Large Cap [4.7%] Small Cap [2.7%] Small Cap [60.8%] Mid Cap [49.9%] Multicap [35.0%] Large Cap [31.6%] Large Cap [3.7%] Multicap [0.8%] Mid Cap [-12.5%] Small Cap [-22.8%] Large Cap [12.2%] Multicap [10.4%] Mid Cap [-2.1%] Small Cap [-5.9%] Performance Top Bottom Diversification offers flexibility to invest across sectors/ themes and may perform well in different market conditions with relatively low risk Multicap Index – S&P BSE 200 TRI ; Large Cap – S&P BSE Large Cap TRI; Mid Cap - S&P BSE Mid Cap TRI; Small Cap - S&P BSE Small Cap TRI. Source: ICRA MFI Explorer. Performance shown above is CAGR (%) and is for the Calendar Year. The above graph is used to explain the concept and is for illustration purpose only and should not used for development or implementation of an investment strategy. Past performance may or may not be sustained in future. 6 CY 2019

SLIDE 8 Our Investment Philosophy At Motilal Oswal Asset Management Company (MOAMC), our investment philosophy is centered on 'Buy Right: Sit Tight‘ principle. Buy Right ‘Q’uality denotes quality of the business and management ‘G’rowth denotes growth in earnings and sustained RoE ‘L’ongevity denotes longevity of the competitive advantage or economic moat of the business ‘P’rice denotes our approach of buying a good business for a fair price rather than buying a fair business for a good price QGLP Sit Tight Buy and Hold: We are strictly buy and hold investors and believe that picking the right business needs skill and holding onto these businesses to enable our investors to benefit from the entire growth cycle needs even more skill. Focus: Our portfolios are high conviction portfolios with 25 to 30 stocks being our ideal

number. We believe in adequate

diversification but over-diversification results in diluting returns for our investors and adding market risk 7

SLIDE 9 Please Note: The given stocks are part of portfolio of a model client of NTDOP Strategy as on 31st March 2020. The stocks forming part of the existing portfolio under NTDOP Strategy may or may not be bought for new client. Past performance may or may not be sustained in future and should not be used as a basis for comparison with

ther investments. The Company mentioned above is only for the purpose of explaining the concept and should not be construed as recommendations from MOAMC.

Wealth Creators - Buy and Hold Strategy Nov-10 Mar-13 Nov-12 May-11 2,923 3,026 10,053 5,922 Market Cap Rs. Crores 31-Mar-20 Stock Initial Purchase Date Market Cap

Rs. Crores

(Purchase Date) CAGR (%) Source: MOAMC Internal Analysis Bajaj Finance City Union Bank GSK Consumer Healthcare IPCA Laboratories 1,33,322 9,515 41,952 17,591 50% 18% 17% 16% 8 Absolute Growth 45.6X 3.1X 4.2X 3.0X The average holding period for stocks held under NTDOP Strategy is

ver 6 years 9 months

Holding Period Since Inception (10+ Years) >5 Years > 2 Years but <5 Years <2 Years

No. of Scrips

2 14 7 2 Buy and Hold strategy with > 60% stocks held for more than 5 years (Page Industries held since inception) and 10% of stocks held for 10+ years resulting in wealth creation for investors

SLIDE 10 Portfolio Allocation Scrip Name % Holding 13.8 10.1 8.4 6.2 5.8 4.9 4.5 4.3 3.9 3.9 Kotak Mahindra Bank Voltas Page Industries IpcaLaboratories ICICI Bank GlaxosmithklineConsumer Healthcare Max Financial Services L&T Technology Services City Union Bank Eicher Motors Sectoral Allocation Top 10 Holdings Market Capitalization Please Note: Data as on 31st March 2020. The stocks mentioned are a part of existing NTDOP Strategy clients and may or may not be bought for new clients. Past performance may or may not be sustained in future and should not be used as a basis for comparison with other investments. The strategy may or may not have any future holdings in these stocks and should not be construed as recommendations from MOAMC. 9 Large Cap Mid Cap Small Cap 45.4% 51.8% 2.5% Weighted Average Market Cap Rs. 65,758 Crs 1.8 1.9 2.0 2.4 2.7 4.5 4.6 8.1 8.7 9.9 10.1 18.1 25.0 Chemicals Engineering & Electricals NBFC Logisc Services Diversified Insurance Oil and Gas Infotech Auto & Auto Ancillaries Pharmaceucals Consumer Discreonary FMCG Banks

SLIDE 11 Performance Snapshot *Strategy Inception Date: 11th December 2007. Please Note: The Above strategy returns are of a Model Client as on 31st March 2020. Returns of individual clients may differ depending on time of entry in the Strategy. Past performance may or may not be sustained in future and should not be used as a basis for comparison with other investments. Returns below 1 year are absolute and above 1 year are annualized. Strategy returns shown above are post fees & expenses. 10 NTDOP Strategy has delivered a CAGR of 12.6% vs. Niy 500 returns of 2.6%, an

utperformance of 9.9%

(CAGR) since incepon (5th December 2007) NTDOP Strategy Nifty 500

25.4
11.7
4.8

4.5 4.0 16.6 15.5 12.6

27.6
11.4
4.4

2.1 0.1 6.7 5.0 2.6 1 Year 2 Years 3 Years 4 Years 5 Years 7 Years 10 Years Since Incepon

SLIDE 12 Performance Snapshot *Strategy Inception Date: 11th December 2007. Please Note: The Above strategy returns are of a Model Client as on 31st March 2020. Returns of individual clients may differ depending on time of entry in the Strategy. Past performance may or may not be sustained in future and should not be used as a basis for comparison with other investments. Returns below 1 year are absolute and above 1 year are annualized. Strategy returns shown above are post fees & expenses. 11

Rs. 1 crore invested in NTDOP

Strategy at inception is worth Rs. 4.3 cr as on 31st March 2020. For the same period Rs. 1 cr invested in Nifty 500 Index is now worth

Rs. 1.4 cr.

NTDOP Strategy Niy 500 20 40 60 Dec-07 Jul-08 Feb-09 Sep-09 Apr-10 Nov-10 Jun-11 Jan-12 Aug-12 Mar-13 Oct-13 May-14 Dec-14 Jul-15 Feb-16 Sep-16 Apr-17 Nov-17 Jun-18 Jan-19 Aug-19 Mar-20 4.3X 1.4X

SLIDE 13 Performance - Rolling Returns Please Note: The Above strategy returns are of a Model Client as on 31st December 2019. Returns of individual clients may differ depending on time of entry in the strategy. Past performance may

r may not be sustained in future and should not be used as a basis for comparison with other investments. Strategy returns shown above are post fees & expenses. Returns above 1 year are

annualized. The data shows rolling returns of the NTDOP Strategy over various time frames. It is worth noting that on 1 year rolling basis, the returns are in a very wide range. The best return made by the Strategy is 141% and the worst return is -57%. As we increase the time horizon, the

utcomes narrow significantly from the

average. For instance, if we consider the 5 year time frame, historically the best return (CAGR) is 37%, least return is 9% and average return is 27%. It may also be noteworthy that the negative returns above 2 years rolling periods are zero, barring 4 years rolling returns which is only 1%. 12 Total number of time periods: 1year: 3,675; 2years: 3,291; 3years: 2,926; 4years: 2,561; 5years: 2,195; 6years: 1,830; 7years: 1,465; 8years: 1100; 9years: 735; 10years: 495; 1 2 3 4 5 6 7 8 9 Investment tenor (in years) 16 1 1 10 141% 73% 50% 44% 37% 43%

9% 10% 36% 37% 34% 30% 17% 17% 17% 19%

100%
50%

0% 50% 100% 150% 200% % of times returns were negative Average returns NTDOP Strategy

SLIDE 14 Fund Manager Manish has been managing the Strategy since inception and also serves as the Director of the Motilal Oswal India Fund, Mauritius. He has over 25 years of experience in equity research and fund management, with over 14 years with Motilal Oswal PMS. He has been the guiding pillar in the PMS investment process and has been managing various PMS strategies and AIFs at MOAMC. Manish holds various post graduate degrees including an MBA in Finance, FCA, Company Secretaryship (CS) and Cost & Works Accountancy (CWA). Manish Sonthalia 13

SLIDE 15 Disclaimer: This presentation has been prepared and issued on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this document is for general purposes only and not a complete disclosure of every material fact and terms and conditions. The information / data herein alone is not sufficient and shouldn’t be used for the development or implementation of an investment strategy. It should not be construed as investment advice to any party. All opinions, figures, charts/graphs, estimates and data included in this presentation are as on date and are subject to change without notice. While utmost care has been exercised while preparing this document, Motilal Oswal Asset Management Company Limited does not warrant the completeness or accuracy of the information and disclaims all liabilities, losses and damages arising out of the use of this information. The statements contained herein may include statements of future expectations and other forward-looking statements that are based on our current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. Readers shall be fully responsible /liable for any decision taken on the basis of this presentation. No part of this document may be duplicated in whole or in part in any form and/or redistributed without prior written consent of the Motilal Oswal Asset Management Company Limited. Readers should before investing in the Strategy make their own investigation and seek appropriate professional advice. • Investments in Securities are subject to market and other risks and there is no assurance or guarantee that the objectives of any of the strategies of the Portfolio Management Services will be achieved. • Clients under Portfolio Management Services are not being offered any guaranteed/assured returns. • Past performance of the Portfolio Manager does not indicate the future performance of any of the strategies. • The name of the Strategies do not in any manner indicate their prospects or return. • The strategy may not be suited to all categories of investors. • The material is based upon information that we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied upon as such. • Neither Motilal Oswal Asset Management Company Ltd. (MOAMC), nor any person connected with it, accepts any liability arising from the use of this material. The recipient of this material should rely on their investigations and take their own professional advice. • Opinions, if any, expressed are our opinions as of the date of appearing on this material only. While we endeavor to update on a reasonable basis the information discussed in this material, there may be regulatory, compliance, or other reasons that prevent us from doing so. • The Portfolio Manager is not responsible for any loss or shortfall resulting from the operation of the

strategy. • Recipient shall understand that the aforementioned statements cannot disclose all the risks and characteristics. The recipient is requested to take into consideration all the

risk factors including their financial condition, suitability to risk return, etc. and take professional advice before investing. As with any investment in securities, the Value of the portfolio under management may go up or down depending on the various factors and forces affecting the capital market. Disclosure Document shall be obtained and read carefully before executing the PMS agreement. • Prospective investors and others are cautioned that any forward - looking statements are not predictions and may be subject to change without notice. • For tax consequences, each investor is advised to consult his / her own professional tax advisor. • This document is not for public distribution and has been furnished solely for information and must not be reproduced or redistributed to any other person. Persons into whose possession this document may come are required to observe these

restrictions. No part of this material may be duplicated in any form and/or redistributed without ’MOAMCs prior written consent. • Distribution Restrictions – This material should not

be circulated in countries where restrictions exist on soliciting business from potential clients residing in such countries. Recipients of this material should inform themselves about and observe any such restrictions. Recipients shall be solely liable for any liability incurred by them in this regard and will indemnify MOAMC for any liability it may incur in this respect. Disclaimer Custodian: Deutsche Bank A.G. | Auditor: Aneel Lasod & Associates | Depository: Central Depositary Services Ltd Portfolio Manager: Motilal Oswal Asset Management Company Ltd. (MOAMC) | SEBI Registration No. : INP 000000670 THINK EQUITY THINK MOTILAL OSWAL For any PMS queries please call us on +91 81086 22222 / 022-4054 8002 (press 2 for PMS)

r write to pmsquery@motilaloswal.com or visit www.motilaloswalmf.com