Discover the true value , before the world does. Presenting HDFC - - PowerPoint PPT Presentation

September, 2018

Presenting HDFC Capital Builder Value Fund

Please refer page 24 for product labelling

Discover the true value, before the world does.

(An open ended equity scheme following a value investment strategy)

The Scheme’s approach is opportunity dependent, primarily buying value stocks. Focus on undervalued stocks that are trading below intrinsic value, as measured require a contrarian view. The Scheme may own good businesses going through Seeks to buy companies with strong track record. As a result, Avoids companies where management quality is poor and there is history of corporate governance issues. Overall preference is to buy companies with good cash flows and strong management and own them for an

Investment philosophy and approach

For complete scheme related details kindly refer Key Information Memorandum / Scheme Information Document

2

HDFC CAPITAL BUILDER VALUE FUND

A Value Investment Strategy

No Market cap bias No Sector bias Value Bias

HDFC Mutual Fund/AMC is not guaranteeing returns on investments made in this scheme. The current investment strategy is subject to change depending on the market conditions.

3

GUIDING PRINCIPLES FOR PORTFOLIO CREATION

Focus on buying value stocks Ensuring consistency of risk adjusted returns

4

HDFC CAPITAL BUILDER VALUE FUND

Being a multj-cap fund benchmarked to the NIFTY 500 there is an atuempt to have good representatjon across market capitalizatjons based on opportunity and risk-reward . Well diversified across sectors-with a bias towards aturactjve companies in each sector (Refer page 6). The Scheme will generally maintain a minimum of 50% of the equity portgolio in stocks where Trailing P/E (Price/Earnings)

• r trailing P/B (Price /Book Value) Ratjo is less than Median P/E or P/B of stocks in the NIFTY 500 Index (Refer page 4).

What has worked ?

• (Refer page 9)
• as a value fund w.e.f. May 23, 2018.

Value biased

What has worked in the past (value bias) to continue going forward

4

HDFC CAPITAL BUILDER VALUE FUND

50%

90.00 80.00 70.00 60.00 50.00 40.00 30.00 20.00 10.00 0.00 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Mar-18

Inception Date - February 01, 1994

The Scheme has maintained exposure to at least 13 out of 18 sectors in the benchmark (NIFTY 500 TRI) over last 4 fiscal years. Outperformance generated over benchmark (Refer page 9)

Risk management through wide sectoral diversification

Source: Bloomberg - Sector classification as per IISL Stocks/sectors referred above are illustrative and are not recommended by HDFC Mutual Fund/AMC. The Fund may or may not have any present

• r future positions in these stocks/sectors.

The above statements / analysis should not be construed as an investment advice or a research report or a recommendation to buy or sell any security covered under the respective sector/s .The same has been prepared on the basis of information which is already available in publicly accessible media.

5

Effective diversification across wide array of sectors to manage risk

SECTOR SEP .14 DEC.14 MAR.15 JUN.15 SEP .15 DEC.15 MAR.16 JUN.16 SEP .16 DEC.16 MAR.17 JUN.17 SEP .17 DEC.17 MAR.18 JUN.18 Financial Services 27.4 30.9 28.4 27.2 28.2 24.3 22.9 25.1 27.0 27.8 28.0 29.4 30.2 29.7 31.3 31.9 Energy 11.4 11.5 12.1 12.1 11.6 13.3 11.3 9.6 9.8 9.1 10.9 10.1 11.0 12.0 14.2 15.3 Consumer Goods 8.4 7.5 7.1 7.4 7.7 9.0 9.6 7.3 7.9 7.6 10.1 11.1 9.3 9.5 9.4 10.2 IT 15.0 13.9 11.4 11.3 11.7 10.9 9.7 11.3 8.9 9.4 8.4 8.6 7.5 6.8 7.5 9.7 Pharma 9.5 8.9 9.0 9.5 9.9 9.3 6.8 8.2 9.1 9.1 6.8 7.9 8.0 7.3 6.6 6.9 Construction 5.5 6.5 8.2 9.3 8.6 10.1 9.2 9.3 10.0 10.5 10.6 10.7 10.3 10.3 8.1 5.6 Industrial Manufacturing 3.9 3.8 3.1 2.8 3.6 4.1 2.2 2.0 1.5 1.7 1.8 1.7 2.7 2.9 2.9 3.1 Metals 1.0

• 0.9

1.6 1.4 1.4 1.2 1.8 0.9 1.2 1.3 3.3 6.3 5.7 5.2 5.0 Services 1.2 1.2 1.1 1.0 1.2 1.6 2.4 3.4 4.2 4.0 4.7 4.4 4.5 5.4 5.0 3.9 Media & Entertainment 2.0 1.6 1.7 2.5 3.2 4.5 4.3 4.4 4.5 4.0 3.6 3.6 3.3 3.6 2.7 2.1 Chemicals 5.7 5.0 5.6 5.4 2.6 2.6 2.1 1.8 1.7 1.9 1.9 1.9 2.0 2.0 1.6 2.2 Cement & Cement Products 1.5 2.0 3.9 4.0 3.7 5.4 4.2 4.7 3.7 3.5

• 0.8

0.9 1.6 1.9 Automobile 5.5 5.5 6.2 4.9 4.4 5.9 6.2 6.7 6.1 6.0 5.5 5.2 4.6 3.1 2.7 1.9 Telecom 2.2 1.8 1.4 1.3 2.2 2.8 3.3 4.4 4.2 4.0 3.7 2.6 0.6 0.2 1.1

• HDFC CAPITAL BUILDER VALUE FUND

Heat Map :- Sector Overweight/ Underweight vis-à-vis benchmark.

Diversification similar to the benchmark

Source: Bloomberg - Sector classification as per IISL Stocks/sectors referred above are illustrative and are not recommended by HDFC Mutual Fund/AMC. The Fund may or may not have any present or future positions in these stocks/sectors. The above statements / analysis should not be construed as an investment advice or a research report or a recommendation to buy or sell any security covered under the respective sector/s .The same has been prepared on the basis of information which is already available in publicly accessible media.

6

Sectors Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 Jun-18 +/- +/- +/- +/- +/- +/- +/- +/- +/- +/- +/- +/- +/- +/- +/- +/- Average Energy

• 0.04

1.18 2.68 2.17 2.32 2.89 0.61

• 0.64
• 0.90
• 2.38
• 0.58
• 0.87
• 0.75
• 0.02

2.56 4.23 0.55 Media & Entertainment 1.07 0.59 0.75 1.54 2.22 3.41 3.28 3.30 3.34 2.92 2.42 2.50 2.25 2.51 1.60 1.13 2.25 Industrial Manufacturing 0.90 0.52

• 0.35
• 0.59

0.35 0.89

• 0.75
• 0.97
• 1.39
• 1.24
• 1.23
• 1.23
• 0.04

0.08 0.24 0.60

• 0.32

Services

• 0.95
• 1.06
• 1.22
• 0.84
• 1.06
• 0.29

0.60 1.64 2.23 2.17 2.65 2.53 2.61 3.40 3.07 2.17 1.03 Construction 0.86 1.94 3.31 4.35 4.20 5.94 5.17 4.97 5.93 6.50 6.45 6.42 6.04 5.87 3.58 1.57 4.77 Pharma 2.51 2.36 1.60 1.48 1.11 1.14

• 0.82

0.94 1.97 2.22 0.56 2.35 2.88 2.26 1.91 2.08 1.63 Chemicals 5.11 4.33 4.96 4.77 1.92 1.87 1.47 1.14 1.03 1.22 1.06 1.06 1.04 0.96 0.54 1.21 2.17 Metals

• 3.16
• 3.71
• 2.70
• 2.02
• 1.37
• 1.47
• 1.78
• 1.25
• 2.29
• 2.29
• 2.27
• 0.44

1.99 1.39 1.04 1.07

• 1.36

Paper

• 0.03
• 0.03 -0.02
• 0.03
• 0.03
• 0.05
• 0.04
• 0.05
• 0.05
• 0.05
• 0.04
• 0.04
• 0.04
• 0.04
• 0.03
• 0.02
• 0.04

Healthcare Services

• 0.26
• 0.25 -0.30
• 0.29
• 0.32
• 0.33
• 0.31
• 0.28
• 0.31
• 0.32
• 0.34
• 0.39
• 0.35
• 0.37
• 0.26
• 0.26
• 0.31

Cement & Cement Products

• 1.28
• 0.62 1.14

1.33 1.10 2.69 1.23 1.46 0.37 0.58

• 3.03
• 2.39
• 1.65
• 1.54
• 0.68
• 0.59
• 0.09

Textiles

• 0.51
• 0.54 -0.47
• 0.58
• 0.59
• 0.72
• 0.67
• 0.70
• 0.67
• 0.70
• 0.68
• 0.65
• 0.66
• 0.75
• 0.69
• 0.68
• 0.64

Fertilisers & Pesticides

• 0.68
• 0.64 -0.67
• 0.73
• 0.65
• 0.64
• 0.68
• 0.80
• 0.82
• 0.97
• 0.95
• 1.02
• 0.95
• 0.93
• 0.90

0.00

• 0.80

Financial Services 1.63 1.91 0.50

• 0.66

0.87

• 2.69
• 3.32
• 1.99
• 1.65
• 0.22
• 1.37
• 1.32
• 1.39
• 0.28
• 1.43
• 0.43
• 0.76

Telecom

• 0.39
• 0.50 -1.00
• 1.41
• 0.12

0.38 1.06 2.35 2.53 2.23 1.96 0.71

• 1.25
• 1.89
• 0.72
• 1.61

0.26 IT 2.03 1.73

• 1.24
• 0.39
• 1.58
• 1.62
• 3.95
• 0.93
• 1.57
• 1.60
• 1.39
• 0.46
• 1.19
• 2.16
• 2.37
• 0.77
• 1.11

Consumer Goods

• 3.22
• 3.76
• 4.31
• 4.04
• 4.18
• 3.19
• 2.71
• 5.24
• 4.09
• 4.36
• 2.12
• 1.85
• 2.92
• 2.68
• 3.16
• 2.62
• 3.46

Automobile

• 3.60
• 3.43
• 2.64
• 4.06
• 4.18
• 3.21
• 3.07
• 2.85
• 4.16
• 3.92
• 3.87
• 4.45
• 4.85
• 6.37
• 6.36
• 6.70
• 4.07

Sectoral presence similar to benchmark, coupled with bottom up stock picking has generated consistent alpha over the years (Refer page 9)

HDFC CAPITAL BUILDER VALUE FUND

Average Top 10 Holding (%) since March 2015 = 41% Average Number of stocks since March 2015 = 56

Risk Management through portfolio diversification

7

HDFC CAPITAL BUILDER VALUE FUND

Top 10 Holding (%) Number of stocks

Low portfolio concentration

Consistent approach to diversification

A Consistent Performer*

Source: ICRA Online. # Includes Multi-Cap, Value, Focused, Dividend Yield, Contra and Large & Mid Cap Funds as per SEBI categorization. Data as on 31st August 2018. Category median refers to the mid-point of the range of CAGR returns for each day of observation for the Schemes under the category. * Past performance may or may not be sustained in the future. The study cited above is for general information and illustrative purposes to explain the concept of consistent performance and should not be construed as an investment advice on minimum returns or guarantee of returns. Due to personal nature of investments and financial planning, investors are advised to consult their financial advisor. For complete performance details refer page 22.

8

HDFC CAPITAL BUILDER VALUE FUND

• 3 year and 5 year CAGR rolling returns on a daily basis

analysed for the past 5 years for each day falling during the period 31st August 2013 to 31st August 2018

• Category median 3 and 5 year CAGR observed for each

day over the said 5 year period amountjng 1230 number

• f observatjons
• HDFC Capital Builder Value Fund outperformed the category

median in 99% instances for 5 year investment horizon.

Why look at Consistency?

will top the chart in the next one year may not be possible.

• While choosing funds, one needs forward looking analysis that does not focus only on funds with strong recent performance.
• Consistent funds may not be the highest in terms of quantum of returns delivered, but would have delivered above median returns during

HDFC Capital Builder Value Fund No of Funds in Category No of Observations % mes > Median Average CAGR of Fund 1230 observations 3 Year Rolling Returns 68 1230 98% 17.3% 5 Year Rolling Returns 63 1230 99% 17.5% Average CAGR of median returns over 1230 observaons 16.2% 15.7%

Internal study of Peer set#

HDFC Capital Builder Value Fund - Growth Category Median

Returns are for Regular Plan Growth Optjon. Benchmark - NIFTY 500 TRI. As on March 28 th 2018 *Scheme taken over from Zurich India Mutual Fund (Close of business hours - June 19, 2003). Past performance may or may not be sustained in the future. HDFC AMC is not guaranteeing returns on any investments made in this Scheme. For complete performance details refer page 22.

^Outperformance in 19 out of 24 financial years with consistent outperformance in last 11 years*

Consistent^ Alpha generation and dividend declaration

14 Year Dividend Track Record 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Dividend per unit (Rs) 5.0 5.0 5.0 3.0 3.5 2.0 2.3 2.5 2.5 2.5 2.5 3.0 2.8 3.0 3.5 NAV (Record Date) 19.5 22.6 26.6 26.4 30.9 12.9 24.0 24.8 22.6 22.4 21.8 31.4 23.4 28.8 31.8 Dividend Yield (%) 25.6 22.1 18.8 11.4 11.3 15.5 9.4 10.1 11.1 11.2 11.5 9.6 11.7 10.4 11.0

Date Mar-95 Mar-96Mar-97Mar-98Mar-99Mar-00Mar-01Mar-02Mar-03Mar-04Mar-05 Mar-06Mar-07Mar-08Mar-09Mar-10Mar-11Mar-12Mar-13Mar-14Mar-15Mar-16Mar-17Mar-18 HDFC Capital Builder Value Fund (A) 15.2%

• 29.7% -23.0% 23.7%

65.6% 7.9%

• 21.8%

8.0%

• 9.5% 129.1% 56.3%

68.3% 0.2% 26.0%

• 38.7%108.6%

14.9%

• 5.5%

6.9% 23.4% 43.2%

• 2.5% 27.8% 14.57%

Benchmark (B)

• 15.2%
• 13.8%
• 9.8%

13.3% 6.0% 74.5%

• 43.0%

2.8%

• 9.6% 107.8%

21.6% 64.2% 8.1% 21.6%

• 40.0%

88.0% 7.3%

• 8.7%

5.1% 17.7% 33.6%

• 7.5% 23.9% 12.87%

Outperformance (A – B) 30.4%

• 15.8%
• 13.2%

10.4% 59.6% -66.5% 21.2% 5.2% 0.0% 21.3% 34.7% 4.2%

• 7.9%

4.3% 1.4% 20.6% 7.7% 3.2% 1.8% 5.7% 9.6% 5.0% 3.9% 1.7%

All dividends are on face value of Rs. 10 per Unit. After payment of the dividend, the per Unit NAV falls to the extent of the payout and statutory levy, if any. There is no assurance or guarantee to unit holders as to rate/quantum of dividend distribution nor that the dividends will be paid regularly. Dividend payout is subject to availability of distributable surplus. Please log on to www.hdfcfund.com for Record Date-wise listing of dividends declared. As TRI data is not available since inception of the scheme, benchmark performance is calculated using composite CAGR of NIFTY 500 PRI values from Feb 01, 94 to Dec 31, 94 and TRI values since Jan 01, 95.

9

HDFC CAPITAL BUILDER VALUE FUND

Returns CAGR(%) 1 Year 3 Years

5 Years

10 Years 15 Years More than 20 45 42 37 53 47 More than 15 52 54 55 76 89 More than 10 62 69 75 95 100 More than 0 72 85 100 100 More than -10 80 94 More than -20 88 99

Consistently delivering positive returns over long term horizon

Example: Over a 5 year horizon, investment in HDFC Capital Builder Value Fund has always yielded positjve returns. Further, in 75% instances, investors have earned returns exceeding 10% and so on

% of instances across return ranges

As on August 31st 2018. Daily Rolling returns since inception date of the scheme (1st Feb’94) Past performance may or may not be sustained in the future. HDFC AMC is not guaranteeing returns on any investments made in this scheme. For complete performance details refer page 22.

10

HDFC CAPITAL BUILDER VALUE FUND

P1- Mid 90s Crash:-01-Feb-94 to 22-Nov-96 P8- Eurozone debt crisis:-09-Nov-10 to 30-Jan-12 P2- Tech Bubble peak:-22-Nov-96 to 11-Feb-00, P9-Policy paralysis:-30-Jan-12 to 31-Aug-13 P3- Tech bubble meltdown -11-Feb-00 to 21-Sep-01, P10-Oil Price correction:-31-Aug-13 to 31-Mar-15 P4- US Fed monetary policy easing:-21-Sep-01 to 14-Jan-04, P11-ECB easing and global growth stabilisation: 31-Mar-15 to 31-Jan-18 P5- India discovery/Emerging market rally:-14-Jan-04 to 08-Jan-08, P12-Since Jan ’18:-31-Jan-18 to 31-Aug-18 P6- Global Financial Crisis Lows:-08-Jan-08 to 09-Mar-09, P7- Post Crisis Recovery:-09-Mar-09 to 09-Nov-10,

Resilient performance across market volatility periods*

P1 P2 P3 P4 P5 P6 P7 P8 P9 P10 P11 P12 HDFC Capital Builder Value Fund

• 17%

35%

• 30%

59% 45%

• 57%

94%

• 18%

5% 50% 17%

• 2%

NIFTY 500 TRI #

• 19%

16%

• 46%

65% 38%

• 58%

81%

• 19%

4% 37% 14% 0% NIFTY 50 TRI ##

• 12%

12%

• 35%

47% 36%

• 53%

73%

• 15%

6% 31% 11% 4%

• 80%
• 60%
• 40%
• 20%

0% 20% 40% 60% 80% 100% 120%

HDFC Capital Builder Value Fund NIFTY 500 TRI # NIFTY 50 TRI ##

Outperformed NIFTY 500 Underperformed NIFTY 500

Outperformed Benchmark index (NIFTY 500) in 10 out of 12 periods.

*Data since scheme inception date (1st Feb 1994). # NIFTY 500-As TRI data is not available since inception of the scheme, benchmark performance is calculated using composite CAGR of NIFTY 500 PRI values from Feb 01, 94 to Dec 31, 94 and TRI values since Jan 01, 95. ## NIFTY 50 - As TRI data is not available since inception of the scheme, additional benchmark performance is calculated using composite CAGR of NIFTY 50 PRI values from Feb 01, 94 to June 29, 99 and TRI values since June 30, 99. Returns are compounded and annualized for more than one year period. Past performance may or may not be sustained in future. Scheme returns are for Regular Plan-Growth Option. For complete performance details refer page 22. Source:- Publicly available information.

11

HDFC CAPITAL BUILDER VALUE FUND

P/E Expansion (NIFTY 500)

Blended Forward P/E Average since Aug’05 = 14.6

Source: Bloomberg (Data available since 01st August 2005) Data as on September 25th, 2018 HDFC AMC/MF is not guaranteeing/offering/communicating any indicative yield on investments made in the schemes.

12

Market P/E has witnessed expansion over the past 4 fiscal years on account

• f stronger macro economic fundamentals and favorable global cues.

HDFC CAPITAL BUILDER VALUE FUND

• 5.0

10.0 15.0 20.0 25.0 Sep-05 Jan-06 May-06 Sep-06 Jan-07 May-07 Sep-07 Jan-08 May-08 Sep-08 Jan-09 May-09 Sep-09 Jan-10 May-10 Sep-10 Jan-11 May-11 Sep-11 Jan-12 May-12 Sep-12 Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Jan-16 May-16 Sep-16 Jan-17 May-17 Sep-17 Jan-18 May-18 Sep-18 NIFTY 500 Blended Forward P/E Average

Earnings Yield Minus 10 Year G-Sec

Earnings Yield minus 10 year G-sec is below long term averages

Source: Bloomberg . Calculation reflects the difference between the estimated earnings yield and the prevailing 10 year G-Sec benchmark. For the purpose of estimating the earnings yield, the estimated forward P/E of the NIFTY 500 Index has been used. Data as on September 25th, 2018 HDFC AMC/MF is not guaranteeing/offering/communicating any indicative yield on investments made in the schemes.

13

The gap between earnings yields and 10 year G Sec yield is near all time lows. Hence, the near term risk reward seems unfavourable. However, long term prospects remain unchanged.

HDFC CAPITAL BUILDER VALUE FUND

Cheap Expensive

Earnings Yield-10 Year G-Sec Average

• 3.25
• 3.00
• 2.75
• 2.50
• 2.25
• 2.00
• 1.75
• 1.50
• 1.25
• 1.00
• 0.75
• 0.50
• 0.25

0.00 0.25 0.50 0.75 1.00 1.25 1.50 1.75 2.00 Sep-06 Sep-07 Sep-08 Sep-09 Sep-10 Sep-11 Sep-12 Sep-13 Sep-14 Sep-15 Sep-16 Sep-17 Sep-18

Changing Macros

Source: Bloomberg ** Brent Crude Price per barrel Source: BIS Monthly REER (61 countries) Source: Bloomberg

14

HDFC CAPITAL BUILDER VALUE FUND

1 2 3 4 5 6 7 8 9 Aug-05 Aug-06 Aug-07 Aug-08 Aug-09 Aug-10 Aug-11 Aug-12 Aug-13 Aug-14 Aug-15 Aug-16 Aug-17 Aug-18 Million barrels per day

140 $ ** 49 $ ** 98 $ ** 57 $ ** 78$ 56$ 111 $ ** 5 6 7 8 9 10

10 Year G Sec Yield

80 85 90 95 100 105 110 Aug-05 Aug-06 Aug-07 Aug-08 Aug-09 Aug-10 Aug-11 Aug-12 Aug-13 Aug-14 Aug-15 Aug-16 Aug-17 Aug-18

INR- Real Effecve Exchange Rate (REER) Approaching fair value OPEC spare capacity is low – Oil price vulnerable to spikes INR approaching fair value, adjustment mostly done. 10 Year G Sec Yield range is 6% - 8.5%. Deviation from range has been short lived.

2 3 1

OPEC Spare Capacity-Low for comfort

1 2 3

Indian Economy : Strong fundamentals, improving growth outlook

Source: CEIC, Kotak Institutional Equities; Economic Survey, E-Estimates Source: RBI

15

HDFC CAPITAL BUILDER VALUE FUND

8.6% 13.5% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% Apr-17 Aug-17 Dec-17 Apr-18 Aug-18

Deposit growth % Credit growth %

GDP at market price (% YoY) Centre's fiscal deficit (% GDP) Current Account Deficit (CAD) (% GDP) Net FDI (% of GDP) Consumer Price Inflation (CPI) (Average) India 10 year Gsec Yield % (at yearend) Improving macros 5.5 4.8 4.7 1.1 9.9 7.9 FY13 6.4 4.4 1.7 1.2 9.4 8.8 FY14 7.5 4.1 1.3 1.5 6 7.8 FY15 8 3.9 1.1 1.7 4.9 7.6 FY16 7.1 3.7 0.7 1.6 4.5 6.8 FY17 6.7 3.5 1.9 1.2 3.6 7.6 FY18 7.5 3.5 2.8 1.2 4.4 7.8

• Current

FY19E GST is stabilising, impact of GST and demonetisation on growth is now behind RBI expects GDP growth of 7.4% and 7.7% in FY19 and FY20 respectively vs 6.6% in FY18

1 2 2 1

Capacity utilization is improving Credit growth in double digits continues to outpace deposit growth

Mar 15 76.00 75.00 74.00 73.00 72.00 71.00 70.00 Sep 15 Sep 16 Sep 17 Mar 17 Mar 18 Mar 16

India’s External situation – Stable, despite some deterioration

Source: CMIE, CEIC, Kotak Institutional Equities estimates * As on 15th September, 2018, Forex cover = Forex Reserve / Average Monthly Imports in past 12 months

16

HDFC CAPITAL BUILDER VALUE FUND

Situation 5 years back Outlier year Current situation Comment % GDP FY12 FY13 FY14 FY17 FY18 FY19E Current account deficit

• 4.3%
• 4.8%
• 1.7%
• 0.7%
• 1.9%
• 2.8%

CAD widening but significantly lower than FY13 Net Oil imports / Crude ($/barrel) 5.4% / 114 5.6% / 110 5.5% / 108 2.4% / 49 2.7% / 58 3.6% / 72.5 Oil imports much lower than around 5.5% in FY12

• FY14

Gold imports 3.1% 2.9% 1.5% 1.2% 1.3% 1.2% Gold imports continue to moderate Non-oil-non-gold exports 13.7% 13.2% 13.6% 10.7% 10.3% 10.5% Non oil non gold exports have declined Non-oil-non-gold Trade Deficit

• 2.1%
• 2.4%
• 1.1%
• 1.6%
• 2.3%
• 2.3%

Net FDI flows / (US$ bn) 1.2%/ 22 1.1% / 20 1.2% / 22 1.6% / 36 1.2%/ 30 1.2% / 32 FDI flows continue to remain strong FII flows / (US$ bn) 0.9%/ 17 1.5%/ 27 0.3% / 5 0.3%/ 8 0.8%/ 22

• 0.4% /
• 10

Balance of payment

• 0.7%

0.2% 0.8% 0.9% 1.7%

• 1.0%

* BoP adjusted for NRI deposits & Banking capital was around - 1% in FY14 Forex reserves (US$ bn) 294 292 304 370 424 400* Forex cover at 9.7 months is higher than 6.7 months in 2013 FY17 was an outlier year External situation is stable and better than in FY12 / FY13 Oil prices / FII flows (Debt and Equity) are key variables

Stable macro, improving micro (NIFTY 50 EPS)

Source: Kotak Institutional Equities Source: Bloomberg

17

HDFC CAPITAL BUILDER VALUE FUND

FY13 FY14 FY15 FY16 FY17 FY18 NIFTY 50 EPS CAGR 13 -18 FY19E FY20E NIFTY 50 EPS CAGR 18-20E NIFTY 50 EPS 377 410 398 384 439 448 3.5 524 668 22.1 Growth % 8.8

• 2.9
• 3.5

14.4 2.0 16.9 27.5

Last 5 years were characterized by improving macro and weak micro Next few years should be characterized by stable macro and improving micro India’s basket for crude ended July at USD 74 vs FY18 average of USD 56, this is likely to result in some deterioration in current account deficit, inflation etc. However, growth is expected to improve. RBI expects GDP growth of 7.4% and 7.7% in FY19 and FY20 respectively vs 6.6% in FY18 US interest rates, geo political developments, rising crude oil prices, global capital flows are key variables Stable Macro Micro : The worst is behind, strong improvement ahead

Data as on 31 August 2018 @Since inception (Feb 01,1994), ^ Assuming Rs 10,000 invested systematically on the first business day of every month over a period of time. Past performance may or may not be sustained in the future. The performance of the Scheme is benchmarked to the Total Return Index (TRI) Variant of the Indices. # NIFTY 500-As TRI data is not available since inception of the scheme, benchmark performance is calculated using composite CAGR of NIFTY 500 PRI values from Feb 01, 94 to Dec 31, 94 and TRI values since Jan 01, 95. ## NIFTY 50 - As TRI data is not available since inception of the scheme, additional benchmark performance is calculated using composite CAGR of NIFTY 50 PRI values from Feb 01, 94 to June 29, 99 and TRI values since June 30, 99. CAGR returns are computed after accounting for the cash flow by using XIRR method (investment internal rate of return) for Regular Plan - Growth Option. Load is not taken into consideration for computation of performance. Different Plans viz. Regular Plan and Direct Plan have a different expense

• structure. The above investment simulation is for illustrative purposes only. The HDFC AMC / mutual fund is not guaranteeing or promising or forecasting any returns.

A SIP of Rs 10,000@ in HDFC Capital Builder Value Fund= Rs 4.59 cr^ today

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Total Amount Invested (Rs.)

2,950,000 1,800,000 1,200,000 600,000 360,000 120,000

Market Value as on Aug 31, 2018 (Rs.)

45,895,788.45 7,641,615.87 3,036,493.27 935,939.73 471,041.90 127,704.20

Returns (Annualised)(%)

18.54 17.46 17.67 17.83 18.27 12.12

Benchmark Returns (Annualised)(%)#

15.08 14.41 14.88 16.61 18.94 18.07

Additional Benchmark Returns (Annualised)(%)# #

13.84 13.99 13.91 15.43 19.37 24.02

SIP Investments Since Inception 15 year SIP 10 year SIP 5 year SIP 3 year SIP 1 year SIP

HDFC CAPITAL BUILDER VALUE FUND

Portfolio Composition As on August 31, 2018

* Average AUM for the Month ended August 31, 2018 ** Risk Free Rate 6.45% (Source FIMMDA, MIBOR) For complete portfolio details please visit www.hdfcfund.com

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Top 10 Equity And Equity Related Holdings 41.29% Total Equity & Equity Related Holdings 95.20% Cash, Cash Equivalents And Net Current Assets 4.80% Average Assets Under Management (Rs. In Crore)* 3,708.97 Standard Deviation** 4.506% Beta** 1.062 Sharpe Ratio** 0.182

Particulars % To Net Assets HDFC CAPITAL BUILDER VALUE FUND

Scheme Facts

For further details, refer Scheme Information Document and Key Information Memorandum and addenda thereto available on www.hdfcfund.com and at Investor Service Centres of HDFC Mutual Fund. $ Dedicated fund manager for overseas investments Mr. Rakesh Vyas.

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Type of Scheme An open ended equity scheme following a value investment strategy. To achieve capital appreciatjon/income in the long term by primarily investjng in undervalued stocks. There is no assurance that the investment objectjve of the Scheme will be realized. Inception Date (Date of allotment) February 01, 1994 Investment Objective Fund Manager $

• Mr. Miten Lathia

Plans Direct Plan Regular Plan Benchmark Index NIFTY 500 TRI Sub-Options and Reinvestment facility. Minimum Application Amount (Under Each Plan/Option) Load Structure Entry Load: Not Applicable. Upfront commission shall be paid directly by the investor to the ARN Holder (AMFI registered Distributor) based on the investors’ assessment of various factors including the service rendered by the ARN Holder. Exit Load: In respect of each purchase / switch-in of Units, an Exit Load of 1.00% is payable if Units are redeemed /switched-out within 1 year from the date of allotment.

HDFC CAPITAL BUILDER VALUE FUND

Asset Allocation Pattern

Under normal circumstances, the asset allocation (% of net assets) of the Scheme’s portfolio will be as follows, with effect from May 23, 2018: The Scheme may invest in the schemes of Mutual Funds in accordance with the applicable extant SEBI (Mutual Funds) Regulations as amended from time to time. The Scheme may invest up to 35% of its net assets in foreign securities. The Scheme may invest upto 100% of its net assets in Derivatives.

Types of Instruments Total Assets (%) Risk Profile

Equity and Equity related instruments 65-100 High Debt Securities (including securitised debt) and money market instruments 0-35 Low to Medium Units issued by REITs and InvITs 0-10 Medium to High Non-convertible preference shares 0-10 Low to Medium

For complete asset allocation pattern table, refer Scheme Information Document and Key Information Memorandum and addenda thereto available on www.hdfcfund.com and at Investor Service Centres of HDFC Mutual Fund

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HDFC CAPITAL BUILDER VALUE FUND

The above scheme has been managed by Miten Lathia, the fund manager since Mar 20, 17. (The scheme was co-managed by Miten Lathia with Chirag Setalvad from May 10, 12 to March 19, 17) The performance of the Scheme is benchmarked to the Total Return Index (TRI) Variant of the Indices. Past performance may or may not be sustained in the future. The above returns are of Regular Plan – Growth Option. Returns greater than 1 year period are compounded annualized (CAGR). Load is not taken into consideration for computation of performance. #NIFTY 500- As TRI data is not available since inception of the scheme, benchmark performance is calculated using composite CAGR of NIFTY500 PRI values from Feb 01, 94 to Dec 31, 94 and TRI values since Jan 01, 95. ## NIFTY 50 -As TRI data is not available since inception of the scheme, additional benchmark performance is calculated using composite CAGR of NIFTY 50 PRI values from Feb 01, 94 to June 29, 99 and TRI values since June 30, 99. Different Plans viz. Regular Plan and Direct Plan have a different expense structure. The expenses of the Direct Plan under the Scheme will be lower to the extent of the distribution expenses / commission charged in the Regular Plan. Returns as on 31st August, 2018.

Scheme Performance Summary

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Value of Rs 10,000 invested Scheme Returns (%) Benchmark Returns (%)

#

Addional Benchmark Returns (%) ## Scheme Benchmark (Rs)# Addional Benchmark (Rs)##

Last 1 year 16.40 16.33 19.40 11,640 11,633 11,940 Last 3 years 16.20 15.84 15.08 15,698 15,553 15,246 Last 5 years 23.93 20.42 17.82 29,270 25,351 22,726 Since inception (Feb 01, 1994) 14.96 11.30 10.78 308,145 139,093 124,080

HDFC CAPITAL BUILDER VALUE FUND

Past performance may or may not be sustained in the future. The performance of the Scheme is benchmarked to the Total Return Index (TRI) Variant of the Indices. The above returns are of Regular Plan - Growth Option. Load is not taken into consideration for computation of performance. Returns as on 31st August 2018. Different Plans viz. Regular Plan and Direct Plan have a different expense structure. The expenses of the Direct Plan under the Scheme will be lower to the extent of the distribution expenses/ commission charged in the Regular Plan.

Other scheme(s) managed by the fund manager

Scheme Managing scheme since Cumulative Performance 1 year 3 year 5 year CAGR (in %) CAGR (in %) Miten Lathia manages 2 schemes

HDFC Dynamic PE Ratio Fund of Funds (Equity Assets)

28-Jun-14 5.72 10.88 10.46

NIFTY 50 Hybrid Composite Debt 65:35 Index (Benchmark Index)

12.85 12.33 14.77 23

HDFC CAPITAL BUILDER VALUE FUND

Product Labelling

24

HDFC CAPITAL BUILDER VALUE FUND

*Investors should consult their financial advisers if in doubt about whether the product is suitable for them. This product is suitable for investors who are seeking*:

To generate long-term capital appreciation / income in the long term Investment primarily in undervalued stocks

RISKOMETER

Disclaimer

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MUTUAL FUND INVESTMENTS ARE SUBJECT TO MARKET RISKS, READ ALL SCHEME RELATED DOCUMENTS CAREFULLY.

The presentation dated 28th September , 2018 has been prepared by HDFC Asset Management Company Limited (HDFC AMC) based

• ninternal data, publicly available information and other sources believed to be reliable. Any calculations made are

approximations,meant as guidelines only, which you must confirm before relying on them. The information given is for general purposes only. Past performance may or may not be sustained in future. The statements are given in summary form and do not purport to becomplete. The views / information provided do not have regard to specific investment objectives, financial situation and theparticular needs of any specific person who may receive this information. The information/ data herein are not investment advice and alone are not sufficient and should not be used for the development or implementation of an investment strategy. The statements contained herein are based on our current views 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. Stocks/Sectors referred herein are illustrative and not recommended by HDFC Mutual Fund / AMC. The Fund may or may not have any present or future positions in these sectors. HDFC Mutual Fund/AMC is not guaranteeing returns on any investments. The data/statistics are given on the basis of information which is already available in publicly accessible media to explain general market trends in the securities market. The same should not be construed as any research report/research recommendation to buy or sell any security covered under the respective sector/s. Neither the AMC and HDFC Mutual Fund nor any person connected with them, accepts any liability arising from the use of this document. The recipient(s) before acting on any information herein should make his/her/their own investigation and seek appropriate professional advice and shall alone be fully responsible / liable for any decision taken on the basis of information contained herein.

HDFC CAPITAL BUILDER VALUE FUND

Thank you

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HDFC CAPITAL BUILDER VALUE FUND