RST BRST BRST BRST BRST BRSTBRST B The Zen of Investing July - PowerPoint PPT Presentation

RST BRST BRST BRST BRST BRSTBRST B The Zen of Investing July 2020

™ Motilal Oswal AMC is the pioneer of PMS business in India with over 16 years of track record ™ 30th June 2020 Trusted by over 42,000 HNI investors and with around Rs. 12,000 Crs of assets as on ™ It has a unique positioning of being “Equity only AMC” with defined “Investment Philosophy” ™ the investing world One of the co-founders, Mr. Raamdeo Agrawal is one of the most honored and trusted names in ™ ™ Large cap oriented portfolio with ~63% allocation Investment Manager Concentrated portfolio of 22 stocks ™ 6.1% over Nifty 50) Oldest PMS track record of 16+ years with annualized return of 20.5% since inception (an alpha of ™ Investing in good businesses, run by great management ™ 1 About the Strategy Index agnostic: ~67% away from benchmark Nifty 50

Why Large Caps? Benefit of capital Sheets Big Balance Businesses Matured Efficiency Capital visibility 2 Stability and costs compe��ve Leverage at cost Low marginal of Operations Large Scale investments

Large Caps Have Lesser Drawdowns -24.6% Absolute returns Falling market periods Small Cap Mid Cap Large Cap 28 September 2018 29 January 2018 to 30 December 2011 03 January 2011 to 27 February 2009 01 January 2008 to 30 June 2004 01 January 2004 to -43.6% 3 -77.3% -28.5% -16.6% -34.8% -72.2% -21.2% -0.2% -24.8% -56.2% -18.9% a specific period, which may or may not be greater than 1 year, the returns are shown in absolute terms. The above illustration is to explain the performance of various categories during the periods where markets have shown downward bend. Further since the above returns are calculated for Source: MFI Explorer. Large Caps are represented by S&P BSE Sensex. Mid Caps by S&P BSE Midcap. Small Caps by S&P BSE Smallcap. Past performance may or may not be sustained in future. Ability to withstand downturns

Investment Philosophy growth to benefit from the entire cycle needs even more skill. Focus: investors our Our right hold investors and believe that picking the business needs skill holding onto these businesses enable diversification but over-diversification results in diluting returns for our adequate investors and adding market risk QGLP ™ ™ ™ ™ ™ ™ portfolios are high conviction portfolios with 25 to 30 in stocks being our ideal number. We believe strictly buy are growth in earnings and sustained RoE ‘L’ongevity denotes denotes longevity of the competitive advantage or denotes At Motilal Oswal Asset Management Company (MOAMC), our investment philosophy is centered on 'Buy Right: Sit Tight‘ principle. Buy Right Sit Tight ‘Q’uality ‘G’rowth quality of the business and management buying for a fair price rather than business a fair business for a good price and Hold: We economic good moat of the business ‘P’rice denotes our approach of buying a 4 Buy and and to

Current Investment Themes Asset Moats from Unorganized to Business migration RERA, IBC REFORMS - GST, and compliance costs in India. Rising labour a few asset monopolies Very tough to re-create to Generics 5 to Bangalore, Patent Private Sector, Boston Public Sector to of per capita GDP Beneficiary of doubling Discretionary Consumer Value Migration #GST (Goods & Services Tax), RERA (Real Estate Regulatory Authority), IBC (Insolvency & Bankruptcy Code) Organized

Portfolio Allocation 13.6 27% 3% 0.3 2.1 2.4 2.5 2.7 2.7 3.0 4.1 4.2 4.3 5.4 6.9 20.9 Weighted Average Market Cap Rs. 1,44,062 Crs Petroleum Products Non-Lending Financials Pharmaceu�cals Cash Telecom - Services Auto Construc�on Project NBFC 25.0 Auto Ancillaries Gas Finance Consumer Non Durables Industrial Capital Goods Commercial Services 63% construed as recommendations from MOAMC. 6 HDFC Life Insurance Company Ltd. Scrip Name % Holding 11.9 9.1 9.0 8.7 5.7 5.4 5.3 4.2 4.1 3.7 Max Financial Services Ltd. HDFC Bank Ltd. ICICI Bank Ltd. The strategy may or may not have any future holdings in these stocks and should not be Large Cap be sustained in future and should not be used as a basis for comparison with other investments. Strategy clients and may or may not be bought for new clients. Past performance may or may not Please Note: Data as on 30th June 2020. The stocks mentioned are a part of existing Value Market Capitalization Small Cap Mid Cap Top 10 Holdings Ipca Laboratories Ltd. Sectoral Allocation Kotak Mahindra Bank Ltd. Bharat Petroleum Corporation Ltd. Larsen & Toubro Ltd. DrReddy's Laboratories Ltd. Bharti Airtel Ltd. Banks

Portfolio Updates HDFC Life Insurance 9,239 May-18 19% 69,229 Nov-17 Company 25% Company 5,85,181 40,986 Date Purchase Ini�al Value Strategy is over 3 years and 3 months 46% Market Cap < 2 Years Growth 1.6X 12.7X 21,112 1,10,883 (%) CAGR Absolute Rs. Crores (30�� June 20) Rs. Crores Market Cap Jul-08 Ipca Laboratories HDFC Bank (Purchase Date) The average holding period for stocks held under 9 7 ICICI Lombard General Axis Bank Thermax ITC Bharat Forge Tech Mahindra Insurance Interglobe Aviation Max Financial Services Hero Motocorp Bosch Sun Pharma in any manner indicate its future prospects and returns. MOAMC. Past performance may or may not be sustained in future and should not be used as a basis for comparison with other investments. Name of the PMS Strategy does not may or may not be bought for new client. The stocks mentioned above are only for the purpose of explaining the concept and should not be construed as recommendations from Please Note: The given stocks are part of portfolio of a model client of Value Strategy as on 30th June 2020. The stocks forming part of the existing portfolio under Value Strategy Dr Reddy’s Laboratories Tube Investments of India > 2 Years but < 5 Years Number of Scrips 10 > 5 Years but < 10 Years 1 > 10 Years 2 Holding Period How Buy Right : Sit Tight works GlaxoSmithKline Pharmaceuticals onwards October 2018 EXITS ADDITIONS Significant changes made to align portfolio to the changing business environment Bharti Airtel Lic Housing Finance 2.3X

Performance Snapshot Value Strategy 1.6 -1.3 -7.8 Mar-20 Dec-19 10X 25X Ni�y 50 Nov-19 3.7 Mar-19 Jul-18 Nov-17 Mar-17 Jul-16 Nov-15 Mar-15 Jul-14 Nov-13 4.7 11.7 Jul-12 14.4 15 Years 10 Years 7 Years 5 Years 4 Years 3 Years 2 Years 1 Year 10.8 9.5 6.9 8.4 4.3 5.6 2.7 -1.9 -12.6 20.5 14.1 Mar-13 Nov-11 8 (CAGR) since inception (25th Rs. 25 cr as on 30th June Strategy at inception is worth Rs. 1 crore invested in Value Ni�y 50 Value Strategy of 6.1% (CAGR) Since inception, Value Strategy has delivered a CAGR of 20.5% vs. Nifty 50 returns of 14.4%, an outperformance March 2003) outperformance of 6.1% 1 cr invested in Nifty 50 Index returns of 14.4%, an CAGR of 20.5% vs. Nifty 50 Value Strategy has delivered a  Name of the PMS Strategy does not in any manner indicate its future prospects and returns. recommendations from MOAMC. Past performance may or may not be sustained in future and should not be used as a basis for comparison with other investments. Strategy may or may not be bought for new client. The stocks mentioned above are only for the purpose of explaining the concept and should not be construed as Please Note: The given stocks are part of portfolio of a model client of Value Strategy as on 30th June 2020. The stocks forming part of the existing portfolio under Value *Strategy Inception Date: 25�� March 2003. 2020. For the same period Rs. is now worth Rs. 10 cr. Mar-11 Mar-05 Jul-10 Nov-09 Mar-09 Jul-08 Nov-07 Mar-07 Jul-06 Nov-05 Jul-04 0 Nov-03 Mar-03 350 300 250 200 150 100 50 Since Incep�on

Performance - Rolling Returns 174% 35% 38% 38% 52% 59% 82% 81% Value Strategy 28% -100% -50% 0% 50% 100% 150% 200% Average returns 31% 27% 15 8% 12% 9% 9% 8% 9% 7% 7% 7% 4% 29% -3% -1% -6% -14% -48% 24% 25% 26% Max Return 14 9 the returns are in a very wide range. The best 52%, least return is -3% and average return is frame, historically the best return (CAGR) is For instance, if we consider the 5 year time average. outcomes narrow significantly from the As we increase the time horizon, the worst return is -48%. return made by the Strategy is 175% and the It is worth noting that on 1 year rolling basis, It may also be noteworthy that the negative Strategy over various time frames. The data shows rolling returns of the Value 14years: 1,194; 15years: 829 7years: 7,351; 8years: 3,386; 9years: 3,020; 10years: 2,655; 11years: 2,290; 12years: 1,925; 13years: 1,559; Total number of time periods: 1year: 5,942; 2years: 5,577; 3years: 3,212; 4years: 4,847; 5years: 4,481; 6years: 4,116, expenses. Returns above 1 year are annualized. Motilal Oswal AMC does not provide any guarantee/ assurance any minimum or maximum returns. performance may or 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 & Please Note: The Above strategy returns are of a Model Client as on 30th June 2020. Returns of individual clients may differ depending on time of entry in the strategy. Past 16%. returns above 5 years rolling periods are zero. 13 5 12 11 Investment tenor (in years) 10 9 8 7 6 4 ™ 3 2 1 Minimum to maximum returns for a respective time period (in %) ™ ™ ™ ™ Min Return