[PPT] - ENAM December 2019 Manish Chokhani (Director) Strictly Private PowerPoint Presentation

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Strictly Private & Confidential

India’s Breakout Moment: Target US$ 5 trillion

December 2019

Manish Chokhani (Director)

Salil Gupta (Analyst)

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 India- the “Sone ki Chidiya” missed the industrial revolution and its share of global GDP went from >30% to <3%, accompanied with loss of its sovereignty.  Since the economic reforms of 1991, GDP has expanded >10x and Market Cap >30x  India is now among the world’s top 5 economies. Its agricultural and industrial base makes it a leading producer of most commodities.  It is recognized as the last major emerging market that, within the coming decade, has the opportunity to catapult to the 3rd ranked economy in the world.  The Indian government has implemented a number of major reforms that include GST, RERA, IBC, as well as major social inclusion measures and EoDB indicators. However, the need for even deeper rooted reforms in a slowing global economy awash with liquidity is an unprecedented opportunity.  A number of reform measures to optimize land, labour, capital, enterprise, governance and technology have been articulated by numerous experts. Awaited eagerly.  Global and Indian investors continue to value entrepreneurs and businesses that can demonstrate large potential for growth in earnings, with governance

Summary

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Source: IMF estimates, Visual Capitalist

India went from >30% to <3% of Global GDP

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Source: Enam Holdings, Bloomberg, Axis Capital, CapitaLine

Strong Growth since Liberalization in 1991

Indicators 1991 2019

GDP ($ billion) 275 2,970 Country rank by GDP 16 7 GDP per capita, $ 320 2,200 Exports ($ billion) 18 330 Imports ($ billion) 24 514 Market cap of BSE 100 ($ billion) 45 1,500 Foreign exchange reserves ($ billion) 1 425 FX reserves in weeks of imports 2 43 Gross national savings (previous year) 23% 29% Total investment (pervious year) 26% 32% Population below poverty line 45% 22%

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Source: Bloomberg 2019

India is now seen as a growing, top 5 economy

32.5 6.8 5.7 5.3 3.2 2.5 2.3 2.0 2.0 1.7 United States China Japan Hong Kong UK France Canada Germany India Switzerland

Ranked 9th by Market Cap (US$ tn), 2019

21.5 14.0 5.2 4.1 3.0 2.8 2.8 2.1 1.9 1.8 United States China Japan Germany India France UK Italy Brazil Canada

Ranked 5th by Nominal GDP (US$ tn), 2019

On course to become the 3rd largest economy by 2030… and hopefully by Mkt Cap.

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Source: IIFL, CEIC, Economist, World Bank, Axis Capital

India: A complex country of countries

 Large Population, Large Domestic Market, Poor GDP/Capita, but on Path to Progress

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Source: Mohandas Pai, Bloomberg, CapitaLine

Strong Agriculture Base: 1st or 2nd Globally

 Major producer of agrochemicals, tea, cashew, jute, oilseeds  Largest exporters of cereal products, cotton, bovine meat, sugar, etc.  All 15 major climates in the world; 46 of the 60 soil types in the world  Largest manufacturers of farm equipment

Food Grains

Production (Mn tonnes)

Milk

Production (Mn tonnes)

Cotton

Production (Mn bales)

Horticulture

Production (Mn tonnes)

Sugar

Production (Mn tonnes)

Spices

Exports (in USD Bn)

Cropland

Production (Mn hectares)

281

(#2)

176

(#1)

33

(#1)

315

(#2)

36

(#2)

3

(#1)

180

(#1)

India

(#Global Rank)

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Source: Mohandas Pai, Bloomberg, CapitaLine

Large Infrastructure Base: Top 5 Globally

 Ranked 35th in Logistics Performance Index (LPI) 2016 (up 19 ranks)  Air passenger traffic is growing at 16.5%, to become 3rd largest by 2024  Produces 95 minerals – 4 fuel-related, 10 metallic, 23 non-metallic, 3 atomic,

and 55 others

Coal

Production (Mn MT)

Iron Ore

Production (Mn tonnes)

Aviation

Passenger Traffic (Mn)

Railway

Network (‘000 Kms)

Roadway

Network (Mn Kms)

Electricity

Production (Bn Units)

740

(#2)

220

(#4)

345

(#7)

115

(#4)

6

(#3)

1260

(#3)

India

(#Global Rank)

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Source: Mohandas Pai, Bloomberg, CapitaLine

Strong Industrial Base: Top 5 Globally

107

(#2)

502

(#2)

25

(#1)

4

(#5)

1

(#6)

181

(#4)

1260

(#3)

1162

(#2)

104 55

9.7
1,020

173 87 120

11.3
1,600

4,280 392

Steel

Production in Mn tonnes

Cement

Capacity in Mn tonnes

Two Wheeler

Production in Mn Units

Four Wheeler

Production in Mn Units Construction Bn Sq. ft.

ITes

Revenue in USD Bn

Electricity Production

TWh

Wireless Phone

Subscribers in Mn

India

(#Global Rank)

Japan USA

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Young Educated Workforce

Lots of institutions and graduates, but lack of quality… and opportunities.

Gross Enrolment Ratio in Higher Education in India is 25.8% 500 Mn population in 5-24 age bracket Enrolment in professional courses grew at 20% CAGR Pvt Institutions account for 78% institutions & 67% of enrolment

Number of Universities Number of Colleges

903 49,061

Total: 32.66 MN General Courses (Mn) Specialised Courses (Mn) Arts 10.04 Engineering 4.25

Commerce 4.47 IT / CS 0.94 Science 5.50 Management 1.23 Education 2.00 Medical 1.24 Social Science 1.55 Law 0.37 Others 1.07 Total 23.60 9.10

Source: Mohandas Pai, Bloomberg, CapitaLine

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 India comprises a few middle income “Mexicans”, a few in service “Filipinos”, and almost entirely of “Africans”

The Three India’s

Source: Kuntal Shah – “India: Wealth Creation Story”, 2019

India 3

Sub-Saharan Africa excluding South Africa 976 m population $1,167 bn GDP $1,200 per capita India 2 Philippines ~105m population $313 bn GDP $3,000 per capita

India 1

Mexico ~130m population GDP $1,150 bn $9,300 per capital income Total HH population Per capita income

~110m ~104m ~1,126m ~$8,800 ~$3,000 ~$1,200

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Source: Kuntal Shah – “India: Wealth Creation Story”, 2019

Indian Consumption continues to disappoint

Cars = 0.7mn Bikes = 3.7mn

Cars =1.9mn Bikes =9.4mn

Cars = 3.5/12 mn Bikes = 20/35 mn

Air.Con = 0.5 mn Fridge = 2 mn

Dig. Pay TV =0

Air.Con =2.5mn Fridge = 5.5 mn DPTV =24 mn

Air.Con = 6/18mn Fridge = 12/25mn DPTV = 164/116mn

Mortgage* US$ 9 bn

Mortgage US$ 88 bn

Mortgage US$ 240/646 bn

11 10 26 20 14 22 22 16 17

HH’s earning above ₹280K will rise from ₹28mn in 2010 to ₹66mn in 2020 CAGR %

17 11 48 2010-20 2000-10 (Annual HH income in 000’ INR ₹) 30 60 90 40K 100K 200K 400K 750K 1250K 2500K HH (%) 2000 2010 2020

Most segments should have grown 3-7x, but due to inadequacy of key enablers, income levels have remained depressed and narrow.

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India Consumption is largely “unorganised”

 10-80% of Products are Unbranded – depending on the product category  Market size of taxed and untaxed smoking goods almost similar at ~$7 billion

Source: BofA Merrill Lynch Global Research Estimates

 ~35% of Paints market remains Unorganized  Jewellery similarly has a large Unorganized segment

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Source: Axis Capital, Bloomberg, CapitaLine

Reflected in Narrow Markets: 29 Companies = 51% of Market Cap

Mcap Company name (USD bn) CMP 52w H 52w L FY20e FY21e FY20e FY21e FY20e FY21e Sensex Index 41,130 (0) 19 Quartile 1 553 26 21 4.0 3.6 16 18 Reliance Industries Ltd 140 1,580 (0) 50 20 16 2.3 2.0 11 13 Tata Consultancy Services Ltd 109 2,077 (9) 17 24 22 8.1 7.4 35 35 HDFC Bank Ltd 97 1,265 (2) 25 26 21 4.1 3.5 17 18 Hindustan Unilever Ltd 63 2,086 (5) 26 62 52 34.9 24.2 84 77 Housing Development Finance Corp Ltd 56 2,310 (2) 27 36 33 4.7 4.3 15 14 ICICI Bank Ltd 47 519 (0) 55 31 18 2.9 2.6 10 15 ITC Ltd 42 247 (20) 5 20 18 4.7 4.3 24 25 Quartile 2 539 21 16 2.6 2.4 13 16 State Bank of India 43 349 (7) 43 16 10 1.3 1.2 10 13 Kotak Mahindra Bank Ltd 43 1,615 (4) 40 33 27 4.6 4.0 15 15 Infosys Ltd 42 702 (17) 14 18 16 4.7 4.4 26 28 Bajaj Finance Ltd 34 4,102 (4) 76 41 31 8.7 6.5 24 25 Bharti Airtel Ltd 31 437 (4) 69 (20) 1,782 2.6 2.7 (13) (1) Maruti Suzuki India Ltd 31 7,258 (8) 33 34 28 4.4 4.0 12 14 Axis Bank Ltd 30 751 (9) 29 29 15 2.4 2.1 10 15 Larsen & Toubro Ltd 26 1,350 (16) 12 18 15 2.7 2.3 16 16 Oil & Natural Gas Corp Ltd 23 133 (26) 15 6 5 0.7 0.7 13 13 Asian Paints Ltd 23 1,713 (7) 37 56 48 15.0 13.0 28 29 HCL Technologies Ltd 21 1,133 (5) 23 15 13 3.2 2.8 23 22 Bajaj Finserv Ltd 21 9,241 (0) 64 32 25 4.7 3.9 18 20 Nestle India Ltd 20 14,663 (3) 48 72 60 42.4 37.0 62 77 Wipro Ltd 19 240 (20) 4 14 14 2.6 2.3 17 18 Coal India Ltd 18 206 (24) 16 7 7 4.2 3.5 62 58 Indian Oil Corp Ltd 17 133 (22) 14 8 6 1.0 1.0 13 15 UltraTech Cement Ltd 17 4,292 (12) 29 31 26 3.4 3.0 12 12 HDFC Life Insurance Co Ltd 16 576 (11) 67 36 29 17.2 14.4 24 23 Avenue Supermarts Ltd 16 1,843 (8) 50 86 66 16.1 13.0 21 22 NTPC Ltd 16 116 (21) 8 10 9 1.0 1.0 11 12 Bharat Petroleum Corp Ltd 15 510 (7) 65 13 11 2.4 2.1 19 21 Sun Pharmaceutical Industries Ltd 15 457 (9) 30 24 20 2.4 2.2 10 11 Price (Rs) Performance (%) PE (x) PB (x) ROE (%)

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Source: Axis Capital, Bloomberg, CapitaLine

Top 25 Companies by Market Cap (US$bn)

HDFC 56 SBI 43

Reliance Industries 131

ONGC 23 NTPC 16 Coal India 18

Reliance Industries 140 ICICI 47 HDFC Bank 97 ITC 42 HUL 63 L&T 26 Tata Consultancy Services 109 Infosys 42 IOCL 17 Maruti Suzuki 31 Axis Bank 30 Bharti 31 Bajaj Finance 34 Asian Paints 23 Nestle 20 Bajaj Finserve 21 HDFC Life 16

Avenue Supermart 16

BPCL 15 Sun Pharma 16 HCL 21 Wipro 19 Kotak Bank 43

Basic materials and utilities 21%

BFSI 35% Consumer, Auto, Paints & Pharma 19% Industrials 4% Tech & Telecom 20% UltraTech Cement 17

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Source: Axis Capital, Bloomberg, CapitaLine

Top 25 Companies by PAT (US$bn)

Old industrials, BFSI and IT still dominant in cash flows and profits

HDFC Bank 3.7 SBI 2.7 Infosys 2.3 BPCL 1.1 NTPC 1.7 IOCL 2.2

Reliance Industries 131

ONGC 4.1

Basic materials and utilities 38% BFSI 28% Consumer, Auto, Paints & Pharma 12% Industrials 4% Tech & Telecom 18%

Reliance Industries 6.7 HDFC 1.6 ITC 2.2 HUL 1.0 L&T 1.5 Tata Consultancy Services 4.6 Maruti Suzuki 0.9 Kotak Bank 1.3 Bharti (1.4) Bajaj Finance 0.8 Asian Paints 0.4 Nestle 0.3 Bajaj Finserve 0.7 HDFC Life 0.2

UltraTech Cement 0.6 Sun Pharma 0.6 Wipro 1.4 Coal India 2.5 HCL 1.5

Avenue Supermart 0.2

Axis Bank 1.0 ICICI 1.5

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Source: CB Insights

Looking ahead: India rising in the Tech World

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India is producing Unicorns rapidly

Source: CB Insights, HSBC, Inc42, Live Mint, Yourstory 2019

India’s 30+ unicorns have created $80bn in value, and expected to grow to 100+ by 2025

 India is #4 on the list of global private companies with valuations of over USD 1bn, or “unicorns”

– 9 out of top 10 unicorns in India are in the online-consumer space

 India has 4 out of 18 global private companies with valuation of over USD 10bn,

r “decacorns”

– Current: Flipkart, PayTM, Oyo, Ola – Potential to produce 5 more in the next 2-3 years

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Source: BJP Manifesto 2030

PM Modi’s Vision Statement for 2030

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Source: Kuntal Shah – “India: Wealth Creation Story”, 2019

Structural Reforms & Digitization underway

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Source: Financial Express, CLSA Research, Economist

Trying to make India a more compliant society

DIGITAL INDIA

GST

RERA

Demonetisation

Biometric ID program covering more than 1 billion people!

“PM has done some very smart tough things… they are setting the road to have better growth forever.” – Jamie Dimon, JPM CEO

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Source: World Bank, Financial Times

Improvement in Business Environment

India has risen to 63rd rank in Ease of Doing Business from below 150 when PM Modi took over… Aiming for under 50 next year

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Yet, the INR tumbles during Global Crises

India Rupee has depreciated at 5% CAGR for the past 10 years. Performance has been worst during times of Global Crises despite stable fiscal performance.

Source: Bloomberg, Kotak Institutional Equities

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Capital Account (% of GDP) FY19 FY20 FDI 1 1 Portfolio Investors Capital Inflows 1 2 Loans Banking Capital 1 1 Other Capital 1 Capital Account Balance

2.2 2.7

Current Account (% of GDP) FY19 FY20 Exports 11 12 Imports 17 18 Oil Imports 5 5 Non-oil Imports 13 13 Total Trade Balance

6
6

Invisibles Software 3 3 Remittances 2 2 Invisible Outflows

1
1

Total Invisibles

4 4

Current Account Balance

2.2
2.3

Asusming oil is $70/bbl in FY20

Praying for Weak Oil and Strong Foreign Inflows

Source: Enam Holdings Research, Kotak Research

Current Account Deficit Funded by Capital Inflows

India needs to find structural answers on exports, tourism and FDI inflows in order to weather global liquidity shocks and cope with rapidly rising energy prices

Trade Deficit of 6% is manageable only if energy prices are contained and remains offset by steady Invisibles. Crying need for encouraging sectors such as Tourism, creating SEZs, port infrastructure, labour reforms etc. Capital flows have been weak and need to recover to 2%+ to be able to offset the Current Account Deficit. FDI + FPI has remained at levels of 1-1.5% since a decade.

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Government Revenue (% of GDP) FY19 FY20 Taxes 12 12 Direct Taxes 6 7 Indirect Taxes 6 6 (Less) State Allocation

4
4

Net Tax Revenue 8 8 Non-Tax Revenue 1 1 Disinvestment 1 1 Total Revenue 9.8 9.9

Budget: + 10 – 13 is not sustainable

 Revenues  Expenditures

Source: Enam Holdings Research

India’s inability to widen the tax base and productively utilize/ monetize assets leaves little room for much required infrastructure & defence capex and any fiscal stimulus.

Need of the hour – Monetization of Government Assets, Curbing Expenditure (subsidies), and encouraging a Pro- Growth Investment Climate

Government Expenditure (% of GDP) FY19 FY20 Interest 3 3 Subsidies 2 2 Defence 1 1 Grants to States 2 2 Pensions 1 1 Other 3 3 Capital Expenditure 2 2 Total Expenditure 13.2 13.3 (% of GDP) FY19 FY20

Gross Fiscal Deficit 3.4 3.4

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Debt ratios for India are spoilt by Government

Source: Bloomberg, Bank of International Settlement (BIS), MOSL

India Households are Unleveraged

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 Nandan Nilekani

Source: Rebooting India: Realizing a Billion Aspirations, Nandan Nilekani (2015)

Reforms as suggested by Thought Leaders

“New technology, institutions, and regulations can help countries to reimagine education and health, build human capital, and prepare their young people for the jobs of tomorrow.” – Nandan Nilekani, Lessons from India in Digital Disruption, Jun 2019

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 India Today

Source: Raghuram Rajan, India Today, Dec 2019

Reforms as suggested by Thought Leaders

“A massive new reform thrust is needed, accompanied by a change in how the administration governs. Decentralisation is critical for economic growth…India needs a re-energised reform programme that focuses on liberalising capital, land and labour markets. With the right attention, sectors that are distressed today, such as agriculture, construction and power, can become engines of growth.”

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Key Enabler #1 - Governance

 Core Reforms

– Simplification of laws & procedures – Principles of – let 99% go free to prevent 1% innocent from suffering – Judicial Reform & Capacity/ Capability – Decentralization of management and spending – Time bound decisions – Reciprocity between power of citizen & officer – Use of technology to expose delays and arbitrariness

 Issue Based/ State Subjects

– Major tax reforms on rates, slabs & procedures – Eliminating the need for ‘CA’s/ lawyers for 90% of Indians! – Police Reforms – SROS, Regulatory Bodies

 Current Issues

– Backlog of cases in arbitration, courts, NCLAT etc. – Enhancing Capacity, Capability & Monitoring effectiveness of governing institutions

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Key Enabler #2 - Enterprise

 Core Reforms

– “Entrepreneurs as wealth and job creators of the nation” – to be treated with respect – Simplification of clearances, procedures & Ease-of-doing-business rankings – Strengthening caliber & capacity of regulatory bodies (CCI, NCLT etc.)

 Issue Based/ State Subjects

– Back key sectors to globalize: ▪ Textiles ▪ Tourism ▪ Medical/ Wellness ▪ Autos ▪ Urban/ Infra ▪ Realty ▪ Mining & Energy ▪ E Commerce

 Current Issues

– Decriminalization for commercial errors and compounding – Removal of “Inspector Raj”

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Key Enabler #3 - Labour

 Core Reforms

– Ability to hire & fire: ▪ Minimum Wages ▪ Health & Safety ▪ Social Security ▪ Skilling & Upgradation ▪ Flexibility in contracts to provide balance of powers between employers and labour

 Issue Based/ State Subjects

– Free-up Hours of Work – Productivity Enhancement: ▪ Education ▪ Vocational ▪ Apprenticeship – Infrastructure for transport, affordable housing

 Current Issues

– Health indicators & infra on air, water pollution & healthcare – Agriculture (VA processing, integrating markets) – Rapidly urbanizing workforce, infrastructure for wealth creation

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Key Enabler #4 - Capital

 Core Reforms

– Real Integration with world markets on equity, debt, currency – Global levels of taxation & tariffs – Wealth Creation to be shared by Indians in exchange for market access (listing in India and 50% Indian ownership)

 Issue Based/ State Subjects

– Path to Capital Convertibility (Fiscal/ BOP) – Encourage REITs, InvITs, MFs etc. – MASSIVE PRIVATISATION of Government Assets including land banks – NIIF/ TARP like groups to clean up, promote

 Current Issues

– Right pricing of government services and privatizing them (power, rail, healthcare, education etc) – Getting into global equity & bond indices with larger weightages

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Key Enabler #5 - Land

 Core Reforms

– Digitization of records – Eliminating “friction in transacting” – Enable Rehab/ Resettlement and compensation policy – Set out transparent process for land zoning

 Issue Based/ State Subjects

– Enforcement of land rights for industry & urban areas – Infrastructure for connectivity & productivity – DBT, Insurance, DMA (E-NAM) for farmers

 Current Issues

– Last mile financing for stalled projects – Auction of NPAs for rapid clearance

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Key Enabler #6 - Technology

 Core Reforms

– Roadmap to stay at global vanguard on technology revolution in: ▪ Energy & Storage ▪ Materials ▪ Robotics ▪ Automation ▪ 3D Printing ▪ AI ▪ Fintech ▪ Space ▪ Medicine & Genetics

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Key Enablers – Require Deep Reforms for $5T

GOVERNANCE ENTERPRISE LABOUR CAPITAL LAND TECH CORE REFORMS ISSUE BASED/ STATE SUBJECTS CURRENT ISSUES

Digitization of

records

Eliminating

“friction in transacting”

Enable Rehab/

Resettlement and compensation policy

Set out transparent

process for land zoning

Enforcement of land

rights for industry & urban areas

Infrastructure for

connectivity & productivity

DBT, Insurance,

DMA (E-NAM) for farmers

Last mile financing

for stalled projects

Auction of NPAs for

rapid clearance Ability to hire & fire:

Minimum Wages
Health & Safety
Social Security
Skilling &

Upgradation

Flexibility in

contracts to provide balance

f powers

between employers and labour

Free-up Hours of

Work

Productivity

Enhancement:

Education
Vocational
Apprenticeship
Infrastructure for

transport, affordable housing

Indicators & infra on

air, water pollution & healthcare

Agriculture (VA

processing, integrating markets)

Rapidly urbanizing

workforce, infra for wealth creation

Real Integration with

world markets on equity, debt, currency

Global levels of

taxation & tariffs

Wealth Creation to

be shared by Indians in exchange for market access (listing in India and 50% Indian

wnership)
Path to Capital

Convertibility (Fiscal/ BOP)

Encourage REITs,

InvITs, MFs etc.

MASSIVE

PRIVATISATION of Government Assets

incl. land banks
NIIF/ TARP like groups

to clean up, promote

Right pricing of govt

services and privatizing them (power, rail, healthcare, education)

Getting into global

equity & bond indices with larger weightages

“Entrepreneurs as

wealth and job creators of the nation” – to be treated with respect

Simplification of

clearances, procedures & Ease-

f-doing-business

rankings

Strengthening

caliber & capacity

f regulatory bodies

(CCI, NCLT etc.)

Major tax reforms on

rates, slabs & procedures

Eliminating the need

for ‘CA’s/ lawyers for 90% of Indians!

Police Reforms
SROS, Regulatory

Bodies

Backlog of cases in

arbitration, courts, NCLAT etc.

Enhancing CAPACITY,

Capability & Monitoring effectiveness of governing institutions

Simplification of laws &

procedures

Principles of – Let 99% go

free to prevent 1% innocent from suffering

Judicial Reform &

Capacity/ Capability

Decentralization of

management and spending

Time bound decisions
Reciprocity between

power of citizen & officer

Use of tech to expose

delays and arbitrariness

Back key sectors

to globalize:

Textiles
Tourism
Medical/ Wellness
Autos
Urban/ Infra
Realty
Mining & Energy
E Commerce
Decriminalization

for commercial errors compounding

Removal of

“Inspector Raj” Roadmap to stay at global vanguard on technology revolution in:

Energy
Storage
Materials
Robotics
Automation
3D Printing
AI / Fintech
Space
Medicine
Genetics

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Source: Market Cycle Phases: Marc Faber – “Tomorrow’s Gold”

Understand Market & Economic Cycles

 Asset & Cost inflation  Capex/ IPO/ Credit cycle revives  Boom spreads  New Themes and Valuation Paradigms

1-2: Fair to Over valuation

 P/E expansion, Easy credit  “Virility” Symbols (Towers, diversification/ M&A)  Capex > near-future requirements  Retail & IPO euphoria  Shock/ Leaders in trouble

3: Bubble

Phase 0 Phase 1 Phase 2 Phase 3 Phase 4 Phase 5 Phase 6 Phase 0

Momentum

f Stock

returns Acceleration in Corporate profits Inflation

 Leading stocks fall sharply, followed by pull back as “Left outers” jump in  Leadership narrows  Profits OK, but P/E falls

4-5: Correction & Bear rally

 Easy & cheap Liquidity  Value buying  Catalysts: Regulatory, Commodities

0 &1: Undervaluation

 Tight money demand & EPS fall; punitive mkts  Social & economic indicators weaken

6: Bear Phase

 Easy credit to revive growth  Major reforms

6-0: Bust

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Source: Axis Capital, Bloomberg, CapitaLine

Watch the macros, but focus on Micro Wealth Creators

Decade 1991 - 2001

Age in Curr Mcap Company Name Promoter Name 1991 (USD bn) FY90-00 FY00-10 FY10-19 H D F C Bank Aditya Puri 41 95,656 68 22 20 Infosys Narayan Murthy 45 41,775 146 9 9 Wipro Azim Premji 46 19,086 109 (3) 5 Zee Entertainment Subhash Chandra 41 3,760 85 (13) 13

Decade 2001 - 2011

Age in Curr Mcap Company Name Promoter Name 2001 (USD bn) FY90-00 FY00-10 FY10-19 Reliance Industries Mukesh Ambani 44 138,210 25 24 10 Kotak Mahindra Bank Uday Kotak 42 43,781

42

22 Bharti Airtel Sunil Mittal 44 32,916

42

1 Sun Pharmaceutical Dilip Shanghvi 45 14,578 52 27 10 Titan Industries Bhaskar Bhat 46 14,399 36 29 Mahindra & Mahindra Anand Mahindra 46 9,117 21 21 9 J S W Steel Sajjan Jindal 42 8,544 (14) 75 9 Motherson Sumi Vivek Chand Saigal 45 5,693 10 43 25

Decade 2011 - 2019

Age in Curr Mcap Company Name Promoter Name 2011 (USD bn) FY90-00 FY00-10 FY10-19 TCS

N. Chandrasekaran

49 107,935

17

18 Bajaj Finance Sanjiv Bajaj 42 33,314 (25) 26 58 Avenue Supermarts Ltd RK Damani 52 15,976

52

Eicher Motors Ltd Siddhartha Lal 45 8,233

32

41 Excel Shroff Group Jai Shroff 49 6,282 27 42 22 Havells India Anil Gupta 44 5,820 24 45 29 Page Industries Ltd Sunder Genomal 56 3,425

39

41 Price - CAGR (%) Price - CAGR (%) Price - CAGR (%)

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Source: Axis Capital, Bloomberg, CapitaLine

Potential future leaders

Future Leaders

Present Curr Mcap Company Name Promoter/ CEO name Age (USD bn) Sales Adj PAT Avg ROE Bajaj Finserv Sanjiv Bajaj 49 19,995 48 16 14 HDFC Life Vibha Padalkar 50 16,368 17 12 25 Info Edge Hitesh Oberoi 46 4,256 15 46 12 Cholamandalam Investment Arun Alagappan 42 3,309 17 27 17 Godrej Properties Pirojsha Godrej 39 3,155 19 10 9 Phoenix Mills Atul Ruia 47 1,594 6 27 7 Tube Investments Vellayan Subbiah 49 1,265 8 22 11 SIS India Rituraj Kishore Sinha 38 942 18 26 17 CEAT Anant Vardhan Goenka 38 524 5 (1) 15 Historical - 5yr CAGR FY14-FY19

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 Financialisation of Savings:

– Continued beneficiaries are private sector banks, insurance companies, mutual funds, mortgage and consumer finance companies

 Privatisation Beneficiaries:

– As the government withdraws from “monopolistic” sectors, natural oligopolies could emerge in sectors ranging from telecom to energy/mining to ports/airports to government services

 Platform Plays

– As the population urbanizes, key beneficiaries will be platform plays in healthcare, education logistics, retail/e- commerce, transportation etc.

 Discretionary Consumption

– As incomes and per capital GDP rises, discretionary spends on durables, travel, media and experiences (eg big fat Indian weddings) will burgeon

Some themes for 2020

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Source: Kuntal Shah – “India: Wealth Creation Story”, 2019

Key Risks

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 India- the “Sone ki Chidiya” missed the industrial revolution and its share of global GDP went from >30% to <3%, accompanied with loss of its sovereignty.  Since the economic reforms of 1991, GDP has expanded >10x and Market Cap >30x  India is now among the world’s top 5 economies. Its agricultural and industrial base makes it a leading producer of most commodities.  It is recognized as the last major emerging market that, within the coming decade, has the opportunity to catapult to the 3rd ranked economy in the world.  The Indian government has implemented a number of major reforms that include GST, RERA, IBC, as well as major social inclusion measures and EoDB indicators. However, the need for even deeper rooted reforms in a slowing global economy awash with liquidity is an unprecedented opportunity.  A number of reform measures to optimise land, labour, capital, enterprise, governance and technology have been articulated by numerous experts. Awaited eagerly.  Global and Indian investors continue to value entrepreneurs and businesses that can demonstrate large potential for growth in earnings, with governance

Summary

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Strictly Private & Confidential

Appendix

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Recommendation to GOI in 2014

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Source: World Bank 2018

All Stock’s Capitalization Around the World

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Source: Visual Capitalist 2018

Ranked: The Wealth of Nations

The richest countries today, and in the future

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Source: Howmuch.net, World Bank

Debt Around the World

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Source: Bloomberg 2019

US Equities: Net purchases/ buybacks

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Source: Visual Capitalist 2019