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

Sep 25, 2023 •301 likes •577 views

RST BRST BRST BRST BRST BRSTBRST B The Zen of Investing October 2015 Contents Why Motilal Oswal PMS? Why India? Indias Next trillion Dollar Era New Cycle of earnings growth Current Valuations below decadal average Why Value? 1

  1. RST BRST BRST BRST BRST BRSTBRST B The Zen of Investing October 2015

  2. Contents Why Motilal Oswal PMS? Why India? India’s Next trillion Dollar Era New Cycle of earnings growth Current Valuations below decadal average Why Value? 1

  3. India’s Next Trillion Dollar Era 59 524 494 475 465 301 155 34 721 22 FY22E FY21E FY20E FY19E FY18E 618 834 FY16E 2,074 3,681 3,344 3,037 2,758 2,505 2,276 1,876 948 1,835 1,879 1,708 1,366 1,226 1,239 FY17E FY15 2 2nd US$ tn 4 years 3 years 4th US$ tn 3rd US$ tn 58 years 7 years 1st US$ tn FY60 Source: Motilal Oswal Securities Ltd (Data as on 31/3/2015) GDP (USD bn) It took our GDP almost 60 years to reach 1st US $ trillion; but only 7 years to reach the 2nd US $ trillion  results. 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 FY51 FY70 FY14 FY07 FY13 FY12 FY11 FY10 FY09 FY08 FY06 FY80 FY05 FY04 FY03 FY02 FY01 FY00 FY90 4,053

  4. The chart below indicates the S&P Sensex expected Earnings Per Share (EPS) growth from FY15 – FY17E. FY05 FY93 FY94 FY95 FY96 FY97 FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY06 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 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16E 1,662 2,021 FY93-FY15: 14% CAGR FY17E FY96-03: 1% CAGR 278 833 720 540 446 361 272 236 216 280 291 834 266 250 181 129 81 Source: Motilal Oswal Securities Ltd, as on 31st March, 2015 3 New cycle of earnings growth results. Past performance may or may not be sustained in future. 820 1,024 45% CAGR 1,328 1,404 FY93-96: FY15-17E: 20% CAGR R G A C % 8 5 : 1 - 8 0 Y 1,120 1,180 F FY03-08: 25% CAGR

  5. 0.4 3.6 13 9 15.91 10.67 24.65 10 Year Avg: 2.7x 4.3 2.9 21 2.2 1.5 2.55 1.64 4.15 Apr-15 Apr-14 Apr-13 17 25 Apr-11 Apr-14 SENSEX P/E (x) SENSEX EARNINGS YIELD Vs BOND YIELD (%) SENSEX ROE (%)- 10 Year Source: Motilal Oswal Securities Ltd, as on 31st March, 2015 Past performance may or may not be sustained in future and should not be used as a basis for comparison with other investments. 4 Current Valuations: Below decadal average Apr-15 Apr-13 10 Year Avg: 16.0x Apr-12 Apr-11 Apr-10 Apr-09 Apr-08 Apr-07 Apr-06 Apr-05 Apr-12 Apr-10 0.7 Apr-10 Apr-06 Apr-05 Apr-15 Apr-14 Apr-13 Apr-12 Apr-11 Apr-09 Apr-08 Apr-08 Apr-07 Apr-06 Apr-05 10 Year Avg: 0.83x 1.8 1.4 1.1 Apr-07 Apr-09 Apr-09 17.0 Apr-08 Apr-07 Apr-06 Apr-05 10 Year Avg: 18.2% 24.5 22.0 19.5 14.5 Apr-10 15.99 15.84 24.15 Apr-15 Apr-14 Apr-13 Apr-12 Apr-11 SENSEX P/B (x)

  6. Why Motilal Oswal PMS ? Data as on 30th September 2015 The data and analysis provided herein do not constitute investment advice and are provided only for informational purposes. It should not be construed as an offer or the solicitation of an offer, to buy or sell securities. . 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 (PMS) will be achieved. Investors in the PMS Product are not being offered any guaranteed/assured returns. Past performance of the portfolio manager does not indicate the future performance for any of the strategies. 5 Amongst India’s leading PMS Providers, with assets under management of approx Rs. 4590 Crores. Our Flagship “Value Strategy” has outperformed the benchmark across market cycles over a 12 year period. Motilal Oswal PMS has one of the largest active accounts (more than 9,140) on PMS platform. Motilal Oswal PMS has active clients in 138 different cities right from Agra to Vijaywada; a testimony of strong acceptance of our PMS across the length & breadth of the country.

  7. Why Value ? Value Investing Wealth Creator - Value Investing Buy & Hold philosophy Value philosophy Rigorous investment process 6 Value Strategy Consistent performance

  8. 7 QGLP returns for our investors and adding market but over-diversification results in diluting number. We believe inadequate diversification portfolios with 20 to 25 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 Sit Tight fair business for a good price Our investment philosophy – ‘Buy Right : Sit Tight’ 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. At Motilal Oswal Asset Management Company (MOAMC), our investment philosophy is centered on risk

  9. Why ‘Buy Right : Sit Tight’ is significant? 8 Real wealth is created by riding out bulk of the growth curve of quality companies and not by trading in and out in response to buy, sell and hold recommendations. This philosophy enables investor and manager alike to keep focus on the businesses they are holding rather than get distracted by movements in share prices. An approach of buying high quality stocks and holding them for a long term wealth creation motive, results in drastic reduction of costs for the end investor. While BUY RIGHT is largely the role of the portfolio manager, SIT TIGHT calls for involvement from the portfolio manager as well as investor. This brings in greater accountability from the manager and at the same time calls for better involvement and understanding from investor resulting in better education for the latter. Long term multiplication of wealth is obtained only by holding on to the winners and deserting the losers.

  10. Please Note: The given stocks are part of portfolio of a model client of Value Strategy as on 30th September 2015. The stocks forming part of the existing % Growth Eicher Motors Ltd. Apr-12 2054.80 17,791.60 766% Hero MotoCorp Ltd. Jun-03 253.65 2,394.50 844% Purchase Date 1,068.80 Adjusted Purchase Price* Current Market Price 30-September-15  A business is prudently picked for investment after a thorough study of its underlying hidden long-term potential.  Value Investment involves determining the Intrinsic value of a stock, and investing in it if the difference between the value and the stock price provides a sufficient Margin of Safety.  “We don't get paid for activity, just for being right. As to how long we'll wait, we'll wait 432% 201.00 portfolio under Value Strategy may or may not be bought for new client. Past performance may or may not be sustained in future and should not be 3801% used as a basis for comparison with other investments. Name of the PMS Strategy does not in any manner indicate its future prospects and returns. The Companies mentioned above are only for the purpose of explaining the concept and should not be construed as recommendations from MOAMC. Source: MOAMC Stock Wealth Creators 9 Bosch Limited Jun-03 497.00 19,386.80 State Bank Of India Jul-08 Jun-03 36.00 237.15 559% HDFC Ltd. Jan-06 241.80 1,212.75 402% HDFC Bank indefinitely.”-Warren Buffett

  11. 0.00 Bosch Jun-14 Nov-14 Apr-15 Sep-15 5.82X 2.06X CNX Nifty Index Aug-13 0.00 100.00 200.00 300.00 400.00 500.00 600.00 Jan-14 Mar-13 Oct-03 Jan-09 30 40 50 60 70 Aug-08 Jun-09 Oct-12 Nov-09 Apr-10 Sep-10 Feb-11 Jul-11 Dec-11 May-12 Jun-03 Feb-04 10 Feb-13 Feb-11 Jun-11 Oct-11 Feb-12 Jun-12 Oct-12 Jun-13 Jun-10 Oct-13 Feb-14 Jun-14 Oct-14 Feb-15 Jun-15 36.79X Oct-10 Feb-10 Jun-04 Oct-06 Oct-04 Feb-05 Jun-05 Oct-05 Feb-06 Jun-06 Feb-07 Oct-09 Jun-07 Oct-07 Feb-08 Jun-08 Oct-08 Feb-09 Jun-09 20 0 20.00 Mar-08 Sep-06 Dec-06 Mar-07 Jun-07 Sep-07 Dec-07 Jun-08 Mar-06 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-06 Dec-05 Sep-10 Jun-03 40.00 60.00 80.00 100.00 120.00 140.00 Sep-03 Sep-05 Dec-03 Mar-04 Jun-04 Sep-04 Dec-04 Mar-05 Jun-05 Jun-10 Dec-10 7.01X 10 For relative comparison, base has been taken as 10 for all the above charts. Based on the closing market prices of 30th September 2015 Please Note: The given stocks are part of portfolio of a model client of Value Strategy as on 30th September 2015. The stocks forming part of the existing portfolio under Value 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 other investments. Name of the PMS Strategy does not in any manner indicate its future prospects and returns. The Companies mentioned above is only for the purpose of explaining the concept and should not be construed as recommendations from MOAMC. Source: MOAMC, NSE NAV Buy & Hold Approach NAV HDFC Bank CNX Nifty Index NAV Hero Moto Crop CNX Nifty Index 9.43X BUY & HOLD strategy, leading to very low churn, lower costs and enhanced returns Jul-15 Mar-11 Dec-12 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 Mar-13 Apr-15 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Oct-14 Jan-15 7.01X

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