BRST E Years BRST rillion Dollar T Opportunity Strategy April 2020 N XT of GDP Growth India’s 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 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
2 FY 1998 FY 2010 FY 2009 FY 2008 FY 2007 FY 2006 FY 2005 FY 2004 FY 2003 FY 2002 FY 2001 FY 2000 FY 1999 FY 1997 FY 2012 FY 1996 FY 1995 FY 1994 FY 1993 FY 1992 FY 1991 FY 1990 FY 1989 FY 1988 FY 1987 FY 1986 FY 1985 FY 2011 FY 2013 FY 1983 3rd US$ 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. 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. Past performance may or may not sustain and does not guarantee future performance Source: statisticstimes.com India is one of the fastest growing among major economies According to World Bank data, India has now become the world’s sixth-largest economy tn US$ Nearing 5th tn 4th US$ tn tn FY 2014 2nd US$ tn 1st US$ FY 2024E FY 2023E FY 2022E FY 2021E FY 2020E FY 2019 FY 2018 FY 2017 FY 2016 FY 2015 FY 1984 FY 1982 186 327 940 820 709 608 515 485 468 459 421 416 393 360 279 1199 288 270 321 296 297 279 249 233 212 218 201 193 1217 1342 FY 1981 0 FY 1980 5000 4500 4000 3500 3000 India GDP (current $ bn) 2500 2000 1500 1000 500 4729 1676 4306 3924 3577 3258 2972 2726 2653 2290 2104 2039 1857 1828 1823 India’s GDP Growth Opportunity
Rising Discretionary Spending 70,000 1991 110,000 10.5% CAGR of 9.5% CAGR of CAGR of 11.6% 100,000 90,000 80,000 60,000 1993 50,000 40,000 30,000 30,000 10,000 (In Rs. Thousand) Per Capita Income Source: data.gov.in & Motilal Oswal Financial Services Ltd Discretionary Items Necessities % thousand, INR 1992 1994 DISCRETIONARY ITEMS 2008 3 2017 2016 2015 2014 2013 2012 2011 2010 2009 2007 1995 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 Share of Avg. Household consumption Health Care Discretionary spending is expected to increase 12 11 9 8 4 3 3 3 2 10 12 14 17 5 5 6 5 25 34 42 56 in 2005 to 70% in 2025 Discretionary spending will rise from 52% disproportionately going forward 11 19 Education & Recreation 1995 Communication Transportation Services Personal Products & Housing & Utilities Tobacco Food, beverages & 2025 E 2015 2005 13 20 9 7 4 9 6 5 3 6 3 2 1 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.
Consumption • Construction • Utility Services • Passenger Vehicles • Consumer Durables • Retailing • Consumer Discretionary These are illustrative in nature and can change from time to time based on the outlook of the portfolio manager. Some Themes that Benefit from GDP Growth • Engineering • Capital Goods • Banks • Cement • Power Government Spending Financial Services Banking and • NBFCs • Insurance • Capital Markets 4
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
Investing in Multicaps Reduces Extremes Large Cap Small Cap [-12.5%] Mid Cap [0.8%] Multicap [3.7%] [31.6%] Large Cap Large Cap [35.0%] Multicap [49.9%] Mid Cap [60.8%] [-22.8%] [12.2%] [2.7%] Diversification offers flexibility to invest across sectors/ themes and may perform well in different market conditions CY 6 development or implementation of an investment strategy. Past performance may or may not be sustained in future. 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 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. with relatively low risk Bottom Multicap Top Performance [-5.9%] Small Cap [-2.1%] Mid Cap [10.4%] Small Cap Small Cap Large Cap [6.1%] [71.1%] Small Cap [-9.7%] Small Cap [-4.0%] Mid Cap Multicap [56.9%] CY2013 CY2018 CY2017 CY2016 CY2015 CY2014 [8.1%] Mid Cap Multicap [4.7%] Large Cap Large Cap [5.4%] Multicap [9.3%] Mid Cap [-2.7%] [-0.2%] [37.4%] Multicap [7.7%] Small Cap [8.7%] Mid Cap [33.3%] Large Cap 2019
Our Investment Philosophy Sit Tight market risk in diluting returns for our investors and adding diversification but over-diversification results number. We believe in adequate portfolios with 25 to 30 stocks being our ideal Focus: Our portfolios are high conviction skill. from the entire growth cycle needs even more businesses to enable our investors to benefit business needs skill and holding onto these investors and believe that picking the right Buy and Hold: We are strictly buy and hold QGLP At Motilal Oswal Asset Management Company (MOAMC), our investment philosophy is centered on fair business for a good price business for a fair price rather than buying a ‘P’rice denotes our approach of buying a good the business competitive advantage or economic moat of ‘L’ongevity denotes longevity of the sustained RoE ‘G’rowth denotes growth in earnings and management ‘Q’uality denotes quality of the business and Buy Right 'Buy Right: Sit Tight‘ principle. 7
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 The average holding period for stocks held under NTDOP Strategy is 17,591 50% 18% 17% 16% 8 Absolute Growth 45.6 X 3.1X 4.2X 3.0X over 6 years 9 months 9,515 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 41,952 1,33,322 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 31-Mar-20 other 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 Stock IPCA Laboratories Initial Purchase Date Market Cap Rs. Crores (Purchase Date) CAGR (%) Source: MOAMC Internal Analysis Bajaj Finance City Union Bank GSK Consumer Healthcare 10+ years resulting in wealth creation for investors
Portfolio Allocation 9.9 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 10.1 Mid Cap 18.1 25.0 Chemicals Engineering & Electricals NBFC Logis�c Services Diversified Insurance Oil and Gas Infotech Auto & Auto Ancillaries Pharmaceu�cals Consumer Discre�onary FMCG Small Cap Large Cap Scrip Name Page Industries % 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 IpcaLaboratories 9 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. Banks
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