Protect Capital INVESTOR PRESENTATION April 2018 Create Wealth · Maruti Suzuki 29-Jan-14 1659 8815...
Transcript of Protect Capital INVESTOR PRESENTATION April 2018 Create Wealth · Maruti Suzuki 29-Jan-14 1659 8815...
~ Warren Buffet
Rule No 1: Never lose moneyRule No 2: Never forget rule No 1.
~ Ben Graham
In the short run, the market is a voting machine, But in the long term, it is a weighing machine
~ John Bogle
Successful investing is about owning businesses and reaping the huge rewards provided by the dividends and earnings growth
WE PROTECT CAPITAL
Prudent risk management -core of our investment philosophy
Investment UniverseDiversification across industries
Diversification across Mcap with
focus on liquidity:
• ≥ 50% in large cap USD1bn+
• ≤ 10% in one stock
• ≤ 30% in one sector,
• ≤ 50% in the top 10 stocks
• Minimum investments in 30 stocks
Flexible investment style: Growth as well
as Value with focus on Margin of Safety
Staggered ApproachPortfolio exposure increased over a
period
Not averse to raise cash
Close eye on earnings
growth drivers
Close eye on valuations
Continuous monitoring of
risk
Exit Strategy
3
WE CREATE WEALTH
3M StockSelection Approach
Identify Size of Sector Opportunity
Market Size
Size of the opportunity should be huge to generate significant investment returns
Identify top 5 (Profitable) players in the sector
Market Share
The company be consistently profitable and should be among the leading players in the industry
Identify the stock for investment with Reasonable Valuation
Margin of Safety
The company should provide reasonable growth opportunity at reasonable Margin of Safety
4
Stock Purchase
DatePurchase Price (Rs)
Price(Rs)30-Apr-2018
Motherson Sumi 28-Jan-10 20.5 353Maruti Suzuki 29-Jan-14 1659 8815
Siyaram Silk Mills 01-Aug-14 139 681Eicher Motors* 08-Aug-13 3343 15249
Hitachi Life* 22-May-14 300 1360Shree Cement 12-Nov-11 3983 16944
Ramco Cements 28-Mar-14 213 824Bajaj Finance 14-Sep-15 514 1908
Shankara Building Products 06-Apr-17 570 1951Honeywell Automation 30-Jun-14 5790 18922
Teamlease Services 30-Nov-16 872 27653M India 24-Nov-14 6475 20524
Eveready* 29-Sep-14 102 302Timken India 22-May-14 233 688HDFC Bank 28-Oct-10 670 1944
Bayer Cropscience* 05-May-14 1427 4052HDFC 10-Dec-10 669 1883
Indo Count Industries* 19-Dec-14 297 785Minda Industries 06-Mar-17 444 1103
Whirlpool Of India 02-Mar-16 644 1579Capital Trust* 29-Jun-15 253 601
Mannapuram Finance* 16-Dec-15 29 69Raymond 09-May-16 476 1112
Infosys 26-Nov-09 537 1200ITD Cementation* 23-Feb-15 65 143
Bhansali Engineering Polymers 21-Aug-17 88 191Gabriel India* 01-Aug-14 55 114
LEADING TO MULTIBAGGER RETURNS
Note: Purchase price adjusted for any corporate action like
split/bonusGain % indicates return since purchase, *Stock sold as per
price mentioned
5
1620%
431%
390%
356%
353%
325%
287%
271%
242%
227%
217%
217%
196%
195%
190%
184%
182%
164%
148%
145%
138%
135%
134%
123%
120%
117%
108%
Gain (%)
AAA PORTFOLIO SUPERIOREARNINGS GROWTH
Earnings MatrixSensex FY17
AAA IOPFY17
SensexFY18E
AAA IOPFY18E
SensexFY19E
AAA IOPFY19E
EPS G(%) 1% 21% 12% 24% 18% 24%
ROE(%) 13% 17% 13% 16% 15% 17%
P/E(x) 23.2 36.8 19.7 27.1
P/BV(x) 3.1 6.0 2.9 5.0
21
24 24
1
12
18
FY17 FY18E FY19E
EPS Growth(%)
AAA IOP Sensex
Source: AAA Research
1716
17
13 13
15
FY17 FY18E FY19E
ROE(%)
AAA IOP Sensex
Source: AAA Research
6
Source: AAA Research
WEALTH CREATION – A CASE STUDY
Global home textile segment of $74bn growing at 5%
USA imports 17% made ups with imports growing at ~12%
Huge opportunity to improve market share for Indian
players in USA and Europe
India expected to become the 5th largest consumer durables
market by 2025, reaching $400 Bn by 2020
Total Size of Indian A/C industry pegged at Rs.14750 Crs, with
volume growth expectation of CAGR 13-15% over FY16-20E
At 3%, India is one of the lowest penetrated market, leading
to significant headroom for growth
4th largest bed sheet exporter to USA & 13th largest globally
Capacity expansion from 36 to 68 mn meters in last 5 years
and further expanding to 90 mn meters
Focus on improving value chain by entering premium bed
linen segment leading to improved operating margins
No major investment in backward integration – leading to
highest ROE of 44% in the industry
Market share of ~8%
Entry into Tier 2&3 markets with sub premium product
to improve its market share
Launched new products to reach mass consumer levels
Strong parentage means access to new technology to
offer world class products to Indian consumers
Reported healthy revenue and profit growth in last 5 years
Ongoing expansion will lead to healthy profit growth over
next 2-3 years
Purchased at one year forward PE of ~6x significantly lower
considering its net profit size (Rs 100 crs+ FY14) and 45% ROE
Expect significant growth in profitability backed by
operating efficiency and higher volume growth
Market cap at Rs 800 crs, i.e. PER of below 10x FY15E –
lowest in the industry compared to all consumer MNC
which trades at average PE of >20x
M1Market
Size
M2Market Share
M3Margin
of Safety
Indo Count Industries Ltd Hitachi Home and Life Solutions Ltd
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THE INVESTMENT PROCESS….
Stock Identification1
Identify emerging trends and opportunities from a
universe of 450 companies
Filter approach – using variety of valuation
parameters
Focus on earnings, free cash flow, ROE, long term
growth and profitability trends
Portfolio Construction Monitoring & Nurturing3
Combination of Top Down and Bottom Up approach with a
benchmark agnostic strategy to achieve Long term
investment objective
Continuous portfolio monitoring ensures prudent risk
management
Regular interaction to provide strategic inputs to strengthen
systems, controls and CG in line with best practices
Analysis & Decision making Process2Initial screening
Corporate meeting and detailed due diligence
Identify sustainable competitive advantage
Exiting & Realizing Value4Constant evaluation of valuation metrics to
decide optimum return potential
Intrinsic value V/s Current Market Price to
evaluate Margin of Safety
Change in underlying assumptions of investment
thesis
8
Exit from Sensex 01 Jan 2011 Vs
01 Jan 2001
Exit from Sensex 30 May 2016 vs
01 Jan 2011
ACC DLF
Ambuja Cement Hindalco
Bajaj Holdings Jaiprakash Associates
Castrol India JSPL
GSK PharmaReliance
Communication
Grasim Sterlite
HPCL Tata Power
MTNL
Novartis
Ranbaxy
Reliance Infra
Reliance Petro
Satyam
Zee
Monitoring of the Portfolio is critical
EXIT STRATEGY AS IMPORTANT ASENTRY STRATEGY 9
Name of company Peak Price (Rs)
Low Price (Rs)
MTNL 200 10
Reliance Infra 2500 309
DLF 1200 72
Jaiprakash Associates 312 5.5
Reliance Communication 820 12
Tata Power 155 56
ROUND UP – APRIL 2018
Global macro data continues to be positive – China’s GDP in Q1CY18 grew by 6.8%, led by both domestic and exports growth. Some of the top
corporates from US, like Intel, Macrosoft, Amazon, Starbucks, have reported better than expected results and have given better outlook for
the year. The heightened words of war between US and China on trade escalations, have significantly subsided now. Geo-politically – a
momentous occasion for the world when North Korean leader, stepped across the border onto the Southern side for peace talks with his
counterpart. If we recall, just a few months back, it was one of the biggest risks to the markets. Even more surprising is NK’s offer to
completely denuclearize after only recently gaining the technology and the capability to strike any part of the US. Crude oil at elevated levels
continues to be a worry as OPEC is now talking about $80/bbl. Another factor to watch is US 10 year G Sec yields, which crossed 3%.
India: As transactions are the most basic economic activity that takes place, measuring them paints a fair picture of economic activity at
ground level. RTGS (~72% share of total adjusted transaction value) transactions reported 25% growth (Apr-Feb18). This is real encouraging
data point and points to improvement in economic recovery. This is further supported by encouraging IIP which grew by 7.1% (Feb18) - 4th
straight month of 7%+ growth vs. 2.5% for Apr-Oct17. The recovery is broad based and is led by automobiles and capital good goods.
IMD has forecasted normal monsoon for 2018 – good news for inflation, farm income and positive implication for growth. CPI retail inflation
in Mar18 fell to 4.3%, however, core CPI remained sticky at 5.4%. Higher petro-product & metal prices, higher MSP for agri products,
staggered impact of States’ HRA implementation (7th Pay Commission reco) and INR’s ~5% depreciation (CYTD) vs. USD may further feed into
the inflation, thus, necessitating RBI to review its stance on the interest rates. While RBI in its credit policy review toned down the hawkish
view and reduced the inflation target, the Monetary Policy Committee (MPC) in its minutes appears to be more hawkish and cautious on
inflation. The 10 year G Sec yields have also moved up from recent low 7.15% to back to 7.75% (seen in early Mar18).
Encouraging growth in digital transactions, improvement in IIP, strong commercial vehicle volume growth, recovery in non-food credit growth,
government thrust on Infra and rural focus spend makes us positive on Indian corporate earnings growth over next 12-18 months. While state
election/global factors will continue to make market volatile, we are positive on Indian equity with 3-5 year view.
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AADHAR CARD – FINANCIAL INCLUSION
Source: UIDAI, RBI, Ministry Of Finance
Minsitry/Dept SchemeReported Savings
(Rs Bn)G (%)
FY16 FY17
Petroleum & Natural Gas
PAHAL 215.8 297.6 37.9%
Food & Public Distribution
PDS 101.9 140 37.4%
Rural development
MGNREGS 30 117.4 291.4%
NSAP 2.5 4.0 60.2%
Others Others 11.2 11.2 0.0%
Total 361.4 570.3 57.8%
Source: DBT Portal
118 Cr (98%)UID Enrollments
Jan Dhan
30 CrAadhar linked Bank accounts opened
5.9 Cr (60%)Aadhar linked MNERGS Cards
12.3 Cr (71%) Aadhar linked LPG Connections
11.4 Cr (45%) Aadhar linkedration cards
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GST- SIZE OF OPPORTUNITY FORORGANISED SECTOR
Demonetisation and GST will lead to market share shift from unorganised to organised sector, leading to 3-10x
increase in Size of opportunity in the listed equity space.
Source: Edelweiss, AAA Research
0.00 1.00 2.00 3.00 4.00 5.00 6.00 7.00 8.00 9.00
Un
org
anis
ed
Sh
are
(%)
Size of Opportunity (Organised Sector)(no of times over 10 years)
Packaging
Electrical Equipment
Plastics
Tiles
Apparels PlywoodDairy
Diagnostics
100
90
80
70
60
50
40
30
20
10
0
6-9x
13
4-5x
DRIVERS OF GROWTH – INVESTMENTBY GOVERNMENT 14
5
12 11
16
32
19
0
5
10
15
20
25
30
35
FY13 FY14 FY15 FY16 FY17 FY18E
Railways Expenditure growth (%)
Source: Emkay Research, AAA Research
0.6
6.1
12.6
-0.6
25.8
10.7
-5
0
5
10
15
20
25
30
FY12 FY13 FY14 FY15 FY16 FY17
Capital Expenditure Growth(%)
Source: Emkay Research, AAA Research
9794
19163621
798010098
16271
25000
0
5000
10000
15000
20000
25000
30000
FY12 FY13 FY14 FY15 FY16 FY17 FY18E
Highway Project Awarded(kms)
Source: IDFC Research Report, AAA Research
50135732
4260 4410
6061
8231
15000
1416
12 12
17
23
41
0
5
10
15
20
25
30
35
40
45
0
2000
4000
6000
8000
10000
12000
14000
16000
FY12 FY13 FY14 FY15 FY16 FY17 FY18E
Highway Project Completed(kms)
Length completed (km) Km/day(RHS)
Source: IDFC Research Report
INDIA ECONOMY RECOVERY: LIKELYREPEAT OF FY03-08
Source: RBI, AAA Research
GDP Growth(%)
4.2
5.4
3.8
8.07.1
9.5 9.6 9.3
6.7
8.6 8.9
6.7
4.5 4.7
7.4 7.67.1
FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17
Average GDP: 7.1% Average GDP: 6.9%
Source: CSO,MOSL, AAA Research
IIP Growth(%)
5
2.7
5.77
11.7
8.6
12.9
15.5
2.5
5.3
8.2
2.9
1.1
-0.1
2.8 2.5
0.5
FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17
Average IIP: 8.6%
Average IIP: 2.9%
15
DISSECTING THE ECONOMIC RECOVERYOF FY03-08
27%
40% 39.7%
16%
31%
47.9%
26%
90%
47.3%
23%
11%
26.1%
53%
65%
45.8%
33%
60%
72.3%
43%
62%
22.0%
32%
73%
54.4%
17.6%
15.6%
52.2%
21% 21%
26.6%25%
38.7%
0%
20%
40%
60%
80%
100%
Re
ven
ue
PA
T
Mca
p
Re
ven
ue
PA
T
Mca
p
Re
ven
ue
PA
T
Mca
p
Re
ven
ue
PA
T
Mca
p
Re
ven
ue
PA
T
Mca
p
Re
ven
ue
PA
T
Mca
p
Re
ven
ue
PA
T
Mca
p
Re
ven
ue
PA
T
Mca
p
Re
ven
ue
PA
T
Mca
p
Re
ven
ue
PA
T
Mca
p
PA
T
Mca
p
Auto Banking Cement ConsumerFMCG
ConsumerDurables
Engineering IT Mining &Metal
Oil & Gas Pharma Sensex
Sectoral CAGR FY03-08 (%)
Source: BSE, AAA Research
25.0%Sensex Net profit CAGR
38.7%Sensex Returns CAGR
Market CapReturns
> Net Profit Growth
16
5.3x
7x 6.6x
15x
3.3x 3.2x2.7x
8.7x
5.1x
BSE Auto BSE Banking BSE ConsumerDurable
BSE CapitalGoods
BSE FMCG BSE Healthcare BSE IT BSE Metal Sensex
Sensex went up by
5.1x
Cyclical indices went up by
5-15x
DISSECTING THE ECONOMIC RECOVERYOF FY03-08 17
Source: BSE, AAA Research
FOCUS ON STOCK EARNINGS GROWTH –EARNINGS GROWTH TO BOUNCE BACK
After reporting single digit earnings growth (FY08-17),
Sensex is expected to report healthy double digit
growth (FY17-20E)
81 129181
250 266 291 278 280216 236 272
348450
523
718833 820 834
10241124
1183
1340 1355 1340 1353
1515
1788
2110
FY9
3
FY9
4
FY9
5
FY9
6
FY9
7
FY9
8
FY9
9
FY0
0
FY0
1
FY0
2
FY0
3
FY0
4
FY0
5
FY0
6
FY0
7
FY0
8
FY0
9
FY1
0
FY1
1
FY1
2
FY1
3
FY1
4
FY1
5
FY1
6
FY1
7
FY1
8E
FY1
9E
FY2
0E
38.7%Sensex CAGR
FY03-08
-1.4%Sensex CAGR
FY96-03
13.9%Sensex CAGR
FY93-96
7.4%Sensex CAGR
FY08-17
Sensex CAGR ??
FY17-20E
Source: Bloomberg , AAA Research
45%EPS CAGR
1%EPS CAGR
25%EPS CAGR
5.5%EPS CAGR
16%EPS CAGR
18
EARNINGS GROWTH CRITICALFOR RETURNS
BSE500 universe ex PSU Banking and Loss making companies
3.75 years 5.75 years 10.75 years
Net ProfitCAGR (%)
(Dec-17/Mar-14) (Dec-17/Mar-12) (Dec-17/Mar-07)
No of CompaniesMarket Cap
CAGR (%)No of Companies
Market Cap CAGR (%)
No of CompaniesMarket Cap
CAGR (%)
80% + 10 39.4% 5 36.6%
50-80% 26 47.6% 14 32.8% 4 69.2%
30-50% 45 36.0% 38 37.7% 36 28.1%
20-30% 44 35.2% 57 24.9% 56 22.1%
15-20% 40 26.7% 33 18.6% 51 18.4%
10-15% 41 14.4% 35 16.6% 59 14.0%
5-10% 30 11.6% 51 15.6% 44 13.3%
0-5% 38 14.6% 24 12.5% 32 4.9%
0-(-20)% 59 9.2% 79 6.7% 35 4.9%
Less than -20% 24 0.6% 15 -0.6% 3 0.9%
Total 357 351 320
NIFTY 12.8% 12.7% 9.9%
SENSEX 11.8% 12.5% 9.3%
No of companies 15%+ CAGR Net
Profit165 147 147
Source: AAA Research
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MARKET VALUATIONS
Source: Bloomberg, AAA Research
Sensex @35160 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18E FY19E
EPS (Rs) 820 834 1024 1123 1185 1340 1355 1340 1353 1516 1789
EPS G(%) -2% 2% 23% 10% 6% 13% 1% -1% 1% 12% 18%
BV (Rs) 4,441 5,101 5,944 6,842 7,790 8,862 9,540 10,143 10,684 11,290 12,006
P/E(x) 26.0 23.2 19.7
P/BV(x) 3.3 3.1 2.9
ROE(%) 18.5% 16.3% 17.2% 16.4% 15.2% 15.1% 14.2% 13.2% 12.7% 13.4% 14.9%
Source: AAA Research
20
7
12
17
22
27
Ap
r/08
Ap
r/09
Ap
r/10
Ap
r/11
Ap
r/12
Ap
r/13
Ap
r/14
Ap
r/1
5
Ap
r/1
6
Ap
r/17
Ap
r/18
PER Fwd (x)
PER Fwd(x)
1.3
2.3
3.3
4.3
5.3
Ap
r/08
Ap
r/0
9
Ap
r/10
Ap
r/11
Ap
r/12
Ap
r/13
Ap
r/14
Ap
r/1
5
Ap
r/16
Ap
r/17
Ap
r/18
P/BV Fwd (x)
P/BV Fwd(x)
Mean 17.2x
Mean 2.5x
Source: AAA Research
THE ALF ACCURATE ADVISORS TEAM22
Rajesh Kothari
Founder and Managing Director
Bhushan Koli
Head Operations and Compliance
Govind Agrawal
Director
Mr. Rajesh Kothari
Founder & Managing Director (Grad CWA, MBA)
AWARD WINNING INVESTMENT TEAM
Rich experience of more than 23 years in Indian capital market
Expertise in both Long Only & Long Short investment strategy
Former Director with Voyager Investment Advisors (US$500m) –
USA based India dedicated fund for two and half years
• During his tenure, fund Outperformed the benchmark
indices significantly
Former Fund Manager with DSP Merrill Lynch (now DSP Blackrock)
Fund Managers Ltd for more than four years
• During his tenure equity assets under management grew
from USD100m to USD1.5bn
• The schemes delivered annualized return of 55% (Equity
Fund) & 62% (Top100 Fund) outperforming benchmark
indices by more than 20% & 10% respectively
• The equity schemes maintained its “1st Quartile Ranking”
consistently during his tenure
Received CMA Young Achiever Award 2014
Rated as “Platinum Fund Manager” by Economic Times for DSP ML Equity
Fund on a risk-adjusted return basis in July 2006
Rated as “Gold Fund Manager” by Economic Times for DSP ML Balanced
Fund on a risk-adjusted return basis in July 2006
CNBC TV18 - CRISIL Mutual Fund of the Year Award 2006 for DSPML Equity
Fund
Lipper India Fund Awards 2006 for best equity fund group for 3 years
DSPML Technology.com Fund - best fund in the equity sector in the IT
category (5 years, 8 eligible schemes)
He was invited at Maharashtra Economic Summit to present views on
Indian Infrastructure
(http: //maharashtrasummit.mieda.in/Program.aspx)
Invited by Institute of Directors to present views on Governance Deficit
Invited by World Council for Corporate Governance to present views on
Governance
Elected on the advisory panel of World CSR forum.
Actively involved with Arham Yuva Group - a philanthropic initiative
Achievements
23
GLIMPSES OF SUPERIOR PERFORMANCETO BENCHMARK INDEX
-6.0
133.0
38.9
84.7
5.8 5.618.6 9.6 11.2
29.0
71.7
2.528.2 25.0
6.9
-11
85
17
70.5
-7.9
3.9 7.5
-9.1
4.8 17.133.2
-7.8
24.011.8 6.5
FY03 FY04 FY05 FY06 Jun06-08Voyager
FY10* FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 YTD#
Consistent Superior returns to Benchmark Index
Funds Managed by Rajesh Benchmark Index
DSP MerillLynch MF AlfAccurate Advisors
*(FY10 is from 23 Nov 2009 - 31 Mar 2010)#(01 Apr 2018 – 30 Apr 2018)
Note: Past performance may or may not be sustained in future
24
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
FY03 FY05 Jun06-Dec08 FY11 FY13 FY15 FY17 FY19YTD#
Funds managed by Rajesh BSE 500 Index
27.0% CAGR
13.8% CAGR
Rs 1 cr invested in Mar02 is worth presently Rs 35.28 crs
Mr. Govind Agrawal
Director(FCA – Chartered Accountant, LLB)
Rich experience of 29 years in finance out of which last 23 years in Indian capital market
Former Fund Manager with Reliance Capital Asset Management Company (USD 20bn)
for over four years.
• Reliance Emergent India Fund (USD 100m offshore fund) outperformed benchmark
indices by 35% since its inception.
• Travelled intensely across globe to meet the investors and presented the firm for
India and Emerging Market as Investment Theme
• Played instrumental role in setting up Macro Economic Research desk
Former Executive Director with UBS Securities India Pvt Ltd, a Swiss Bank subsidiary, for 4
years
• Responsible for India Account Manager for large FIIs
• Guided the portfolio managers for right country, sectors and stocks weightings
Former Senior VP – Equity Sales with Motilal Oswal Securities Ltd for 10 years
• Played key role in establishing institutional equity broking business, systems and
processes
• Was account manager for major institutional domestic and foreign accounts advising
the clients on sectoral allocation and stock selection
Achievements
AWARD WINNING INVESTMENT TEAM
Represented Reliance AMC on international
platforms and panel discussion on Emerging
Markets and Indian Equity Market
Addressed investors’ meet and the private banking
teams of large banks in Middle East, Asia, London,
Europe and in India
At UBS, was voted as the “Best Equity Sales
Person‐Mega Funds category, Asia Money 2006”
Won several awards at Motilal Oswal for
consistently contributing to Institutional Equity
Sales
25
ALFACCURATE ADVISORS
Credentials
We are specialists in Indian capital markets with combined
experience of 70+ years
Investment Principle
Protect Capital, Create Wealth
Vision
To be the world’s most admired investment advisor
27
INVESTMENT PHILOSOPHY...
Fundamental Research core ofour investment management
Constant endeavor to be ahead of the Market
Emphasis on value research Vs commodity research
Benchmark aware butnot driven
Flexible investment style
Focus on margin of safety
Long Term Horizon
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COMBINED WITH INVESTMENTDISCIPLINE...
Parameter Rules Current Position
Cap Exposure At least 50% in Mega & large cap (More than USD1bn) 55.9% invested in Mega & Large cap
Sector Weightage Not more than 30% in one sector Maximum exposure in a given sector is 16.1%
Stock WeightageNot more than 10% in a given stock and not more than
50% in the top 10 StocksMaximum Exposure in a given stock is 3.7%.
Top 10 stocks as percentage of portfolio is 32.3%
Number of Stocks Minimum 30 Stocks 47 stocks
Stock Universe 450 Corporates 450 Corporates
Data as on: 30 Apr 2018
47Number of Stocks
13Number of Sectors
32.3%Top 10 Stocks as % of portfolio
30
Sector Allocation
Agri Input Auto Auto AncillaryBanking & Finance Cash and Cash Equivalent CementChemicals Consumer EngineeringOthers Pharma Real EstateRetail Software
31%
25%
30%
10% 4%
Portfolio Allocation
Mega Large Mid Small Cash
LEADING TO SUPERIOR PERFORMANCE
AAA India Opportunity Plan - Equity BSE 500 Index
AAA India Opportunity Plan - Equity Vs BSE 500 Index (%)
18.69.6 11.2
29.0
71.7
2.5
28.2 25.0
6.97.5
-9.1
4.8
17.1
33.2
-7.8
24.0
11.86.5
FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19YTD#
Performance (%)FY19YTD#
FY18 FY17 FY16 FY15 FY14 FY13 FY12 FY11 Since Inception*
AAA India Opp. Plan 6.9 25.0 28.2 2.5 71.7 29.0 11.2 9.6 18.6 493.4
BSE 500 Index 6.5 11.8 24.0 (7.8) 33.2 17.1 4.8 (9.1) 7.5 126.0
BSE Sensex 6.6 11.3 16.9 (9.4) 24.9 18.8 8.2 (10.5) 10.9 104.7
CNX Nifty 6.2 10.2 18.5 (8.9) 26.7 17.9 7.3 (9.2) 11.1 110.4
*(23 November 2009 – 30 April 2018)(Performance after all expenses & fixed management fees); #(01 April 2018 – 30 April 2018)
AAA India Opp. plan consistently not only outperformed but also generated Positive return in volatile markets
Note: Returns of individual clients may differ depending on time of entry in the Strategy. Past performance may or may not be sustained in future and should not be used as a basis for comparison with other investments
31
Compounded Annual Returns (%) 1 YEAR 2 YEARS 3 YEARS 5 YEARSSince
Inception*
AAA India Opp. Plan PMS 24.5% 28.4% 21.1% 30.4% 23.6%
BSE 500 Index 15.9% 20.3% 12.0% 15.3% 10.2%
BSE Sensex 17.5% 17.2% 9.2% 12.5% 8.9%
CNX Nifty 15.4% 17.0% 9.5% 12.6% 9.2%
*(23 Nov 2009 – 30 Apr 2018)(Performance after all expenses & fixed management fees)
Performance Vs leading Mutual Funds since inception(%)
493.4
258.4186.3
150.984.9
126.0 104.7 110.4
AAA IndiaOpp. Plan*
Quartile 1 Quartile 2 Quartile 3 Quartile 4 BSE 500Index
BSESensex
CNX Nifty
Average Monthly Rolling Returns since inception(%)
25.3 25.6 26.3
11.2 10.6 11.2
1 Year 3 Year 5 Year
AAA India Opp. Plan BSE 500 Index
AAA India Opp Plan ranks # 1 compared with 141 diversified funds of each reputed fund house
*Since Inception (23 Nov 2009 – 30 Apr 2018)(Performance after all expenses & fixed management fees)
Note: Returns of individual clients may differ depending on time of entry in the Strategy. Past performance may or may not be sustained in future and should not be used as a basis for comparison with other investments
Source: Bloomberg
LEADING TO SUPERIOR PERFORMANCE32
AAA IOP PMS Outperformed BSE 500 Index : 28 out of 33 trailing quarters
LEADING TO SUPERIOR PERFORMANCE33
RISK ANALYSIS:
AAA IOP PMS PERFORMANCE COMPARED TO BENCHMARK
Parameters How to read ratioAAA IOP
PMSBSE500 Index
AAA IOP PMS performance
BetaLess than 1 beta is good sign as it
denotes lower volatility of the portfolio0.86 1.0
Beta of less than 1 shows AAA PMS has lesser volatility compared to BSE500 Index
Sharpe Ratio Excess return per unit of deviation. Higher the Sharpe ratio, better it is.
1.2 0.2Top Performing Midcap MFs have Sharpe
Ratio 0.75+. AAA IOP PMS Sharpe ratio is one of the best in the industry.
Standard DeviationStandard deviation denotes amount of
variation13.9 14.5
AAA IOP SD is less than Benchmark as well as peer group which shows portfolio has lower
risk
Upside capture It denotes overall performance of PMS
during up markets. 179.9 100.0
Upside capture ratio of more than 100 indicates that fund has outperformed Benchmark during positive markets.
Downside captureIt denotes overall performance of PMS
during down markets. 80.2 100.0
Ratio of less than 100 indicates, fund has outperformed Benchmark during negative
markets.
Capture Ratio
Capture ratio >1 indicates, Investment Manager has gained more during up
(positive) markets and lost less during down (negative) markets.
2.24 1AAA PMS capture ratio is healthy as it
protected capital during negative markets and building wealth consistently.
Data is analysed since inception of AAA IOP PMS data i.e. 23 Nov 2009 – 30 Apr 2018
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AAA IOP PMS ROLLING RETURN ANALYSIS
Monthly Rolling Returns Analysis(%)AAA IOP
1 YearBSE500
Index 1 YearAAA IOP3 Years
BSE500Index 3 Years
AAA IOP 5 Years
BSE500 Index 5 years
No of obervations 91.0 91.0 67.00 67.00 43.00 43.00
No of Positive Observations 85.0 70.0 67.00 61.00 43.00 43.00
No of Negative Observations 6.0 21.0 0.00 6.00 0.00 0.00
Loss Probability (%) 6.6% 23.1% 0.0% 9.0% 0.0% 0.0%
Average Returns (%) 25.3% 11.2% 25.6% 10.6% 26.3% 11.2%
Median Returns (%) 19.3% 7.9% 26.7% 11.9% 26.5% 11.9%
Maximum Returns (%) 88.8% 51.3% 41.0% 22.9% 30.6% 16.0%
Minimum Returns (%) -13.8% -27.4% 6.2% -4.2% 21.9% 5.6%
Since Inception (23 Nov 2009 – 30 Apr 2018) (Performance after all expenses & fixed management fees)
AAA has delivered average returns of 25.3%, 25.6% and 26.3% for 1 year, 3 years and 5 years respectively on
monthly rolling return basis
Negative returns for 3 years and 5 years rolling periods are 0
Note: Returns of individual clients may differ depending on time of entry in the Strategy. Past performance may or may not besustained in future and should not be used as a basis for comparison with other investments
35
THE POWER OF COMPOUNDING –A SCENARIO ANALYSIS
Scenarios based on investment of Rs 5 Crores
The real power of compounding is seen only over the long term
36
WHY WE SHOULD BE YOUR CHOICE OF INVESTMENT ADVISORY
Access to Founders – founders are fund managers
Process driven organization
Award winning investment team and track record
No conflict of interest
Staggered investment approach
Sound Research capabilities
Adequate infrastructure to support scalability
Integrity and ethics as the core of the business
Client centric business model
Strong domain knowledge in Indian Capital markets
Expertise in both – Long Only and Long Short Investment Strategy
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PRODUCT FEATURES
Name of plan AAA India Opportunity Equity PMS Plan
Objective Long Term Capital Appreciation
Investment ThemeTo invest in listed companies with combination of high
growth stocks as well as value stocks
Principal Officer Rajesh Kothari
Director Govind Agrawal
Custodians Deutsche Bank, India
Fund Accountant Deutsche Bank, India
Depository Participant IL&FS, India
Mode of payment Fund transfer/cheque/stock transfer
39
AWARDS AND RECOGNITIONS
Dr. Jitendra Singh, Union Minister of State (I/C), Prime Minister Office, giving
Certificate of Merit – CMA Young Achiever Award – 2014
Lipper Fund Award – India 2007
40
Thank You
Rajesh KothariT : +91 22 4236 0301
M : +91 98200 [email protected]
Govind AgrawalT : +91 22 4236 0311M : +91 93208 [email protected]
AlfAccurate Advisors Pvt. Ltd503, B Wing, Naman Midtown,
Elphinstone Road, Mumbai - 400 013, India
T : +91 22 42360300; F : +91 22 42360333 [email protected]
Contact us
Disclaimer: Equity Investments are subject to market risks , read all plan related documents carefully. This document is not for public distribution and has been furnished to you solelyfor your information and may not be reproduced or redistributed to any other person. This material is for the personal information of the authorized recipient. The material is basedupon publicly available information that we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied upon. Opinions expressed are ourcurrent opinions as of the date appearing on this material only. Prospective investors and others are cautioned that any forward-looking statements are not predictions and may besubject to change without notice. Past performance may or may not be sustained in future. No part of this material may be duplicated in any form and/or redistributed withoutAlfAccurate Advisors Pvt Ltd.'s prior written consent. In so far as this report includes current or historical information, it is believed to be reliable, although its accuracy andcompleteness cannot be guaranteed. Alfaccurate Advisors Pvt. Ltd and any person connected with the firm, does not accept any liability arising from the use of this document.