Uti Asset Management Co. Ltd. · NSE:UTIAMC
Uti Asset Management — UTI Healthcare Fund — Investor Presentation (June 2023)
29 slides from Uti Asset Management's investor presentation, June 2023
Slide 1: UTI Healthcare Fund
UTI Healthcare Fund June 2023 An open ended equity scheme investing in the Healthcare Services Scheme Riskometer S&P BSE Healthcare TRI Sector. This product is suitable for investors who are seeking*: • Long term capital appreciation • Investment predominantly in equity and equity related securities
Slide 2: Structure of Healthcare Sector in India
Structure of Healthcare Sector in India Hospitals Pharmaceuticals Healthcare centres, district hospitals & general hospitals. Private Hospitals Manufacturing, marketing, extraction, include nursing homes, mid & top tier- processing, purification & packaging of private hospitals chemical materials Di
Slide 3: Key Trends in Market Penetration
Key Trends in Market Penetration IPM: Market Size IPM: Growth Break-up 25,000 Price Volume New Product 20,051 Market Size (INR Bn) 20,000 18,590 GST Covid 4 impact impact 15,000 5 6 4 3 9 10,000 9,145 6 5 2 4 2 5 5 3 0 3 5 4 5 5 4 3 3 5,000 2 2 -1 -4 - FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 F
Slide 4: Healthcare is favorably placed for potential growth
Healthcare is favorably placed for potential growth Healthcare Expenditure as % of GDP Increasing Healthcare Expenditure in India 16.8 6,000 5442 5402 5,937 5108 5144 5,000 4682 12.5 4,383 4,401 4,066 4,050 10.2 9.9 9.6 4,000 3,857 3,803 9.1 3,383 3,573 5.6 5.4 3,000 4.9 3.8 3.8 1,363 3.0 2.9 2,000
Slide 5: Indian Hospitals: Robust growth visibility
Indian Hospitals: Robust growth visibility Healthcare delivery market poised to grow 13-15% Share of private treatment increasing over FY23-26 9 8 7 2.2 31% 26% 6 38% 35% INR trillion 5 1.7 4 1.6 3 6.1 74% 1.0 62% 65% 69% 2 3.9 3.5 1 1.9 0 FY15 FY22 FY23P FY26P FY17 FY22 FY23P FY26P IPD OPD Private
Slide 6: Indian Hospitals: inadequate infrastructure with improving insurance coverage provides opportunity
Indian Hospitals: inadequate infrastructure with improving insurance coverage provides opportunity Bed penetration well below global peers Improving health insurance coverage 800 37% 36% 36% 37% 37% 40% Hospital bed density: India vs. other countries 34% (2018) 700 35% 71 28% 600 30% 515 520 23% 482
Slide 7: Diagnostics market in India remains highly fragmented
Diagnostics market in India remains highly fragmented Diagnostic industry remains highly fragmented in India, The Indian diagnostics market is expected to with organized national and regional diagnostic chains grow at a CAGR of ~14%. havingmarket share of only 15% Size of diagnostics market in India
Slide 8: Indian Health Insurance: Scope for structural growth opportunity
Indian Health Insurance: Scope for structural growth opportunity India has low Insurance Penetration Health Insurance premiums (Rupees in billion) 1,000 0.34% 0.40% 907 55 0.35% 800 0.30% 736 43 0.30% 37 35 35 35 0.24% 587 600 0.25% 0.20% 496 25 455 0.20% 0.16% 0.16% 17 16 379 14 400 0.15% 11 304 9
Slide 9: Indian Health Insurance: Scope for structural growth opportunity
Indian Health Insurance: Scope for structural growth opportunity India healthcare expenditure FY20 financing Health Insurance Expenditure FY20 (Rs bn) by source (Rs bn) Healthcare Functions Central government In patient 16% State governments Daycare 20% Local bodies 34% OPD 4% 15% Govt. sponsored Pr
Slide 10: Indian Healthcare: Scope for structural growth opportunity
Indian Healthcare: Scope for structural growth opportunity Pharmaceutical (Formulations) Branded Generics Chronic Acute (Long Duration) (Short Duration) • Heart disease/ Diabetes • Cold/ Cough • Demographics • Hypertension • Typhoid/ Cholera Key Growth Drivers • Cancer/ Brain Disease • Pain/ Analges
Slide 11: Key Take away: India – Pharmacy to the world
Key Take away: India – Pharmacy to the world Solid process-oriented skills developed over the last 50 years which enables the industry to churn out generics of innovator drugs at competitive costs Availability of skilled manpower in both research & development and production in large numbers E
Slide 12: Generic Business key datapoints and India's share in US Generic Market
Generic Business key datapoints and India’s share in US Generic Market Active products in the US generic market (net India's share in global pharmaceutical formulations of new launches and discontinuations) 1,800 3.1% 2,000 1,600 1,900 3.0% 1,800 1,400 1,700 2.9% 1,600 1,200 1,500 1,000 2.8% Dec-16
Slide 13: Pharma exports momentum continues but APIs lead
Pharma exports momentum continues but APIs lead Formulation Active Pharmaceutical Ingredient (API) 25000 5000 5 year CAGR 6.2%; CY22 rose by ~7% 4,702 5 year CAGR 9%; CY22 rose by ~1% 4,395 4500 4,209 19,081 19,331 4,072 20000 18,022 4000 3,758 3,479 15,882 3500 USD (Million) USD (Million) 15000 13,
Slide 14: Key Take away: API opportunity
Key Take away: API opportunity India is one-tenth of China in terms of API exports which signifies the huge potential of the API scale-up which is possible. API needs huge investments in plants and massive infrastructure which deterred companies as they opted for the easier formulations which ar
Slide 15: Pharma Sector: Earnings visibility improved significantly
Pharma Sector: Earnings visibility improved significantly India Pharma Weightage – Below 10-year Average Pharma Sector weightage in Nifty 50 – Below 10 year average 9.0 8.1 8.0 7.0 6.6 6.6 6.3 6.0 5.0 4.2 4.5 4.0 3.3 3.4 3.2 3.0 3.0 2.7 2.1 2.0 1.0 0.0 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY
Slide 16: Pharma Sector: Valuations are near to historical average
Pharma Sector: Valuations are near to historical average P/E (x) Avg (x) Max (x) Min (x) +1SD -1SD PE Relative to Nifty PE (%) Avg (x) 40.0 80.0 34.3 60.0 30.6 40.3 32.2 30.0 40.0 26.3 26.4 20.0 22.0 20.0 0.0 -20.0 16.1 10.0 -40.0 Jun-13 Sep-14 Jun-18 Sep-19 Jun-23 Jun-13 Sep-14 Jun-18 Sep-19 Jun-23
Slide 17: Why choose to invest in the sector now?
Why choose to invest in the sector now? One of the few sectors to benefit from both Domestic High entry barriers for both domestic markets and export consumption and outsourcing, both of which has a long markets runway of growth in the medium to long term Cost pressures of last 2 years are behind an
Slide 18: S&P BSE Healthcare has outperformed S&P BSE Sensex
S&P BSE Healthcare has outperformed S&P BSE Sensex ₹10,000 Invested in March ’08 in S&P BSE Healthcare TRI vs.S&P BSE Sensex TRI 15 Years Growth: S&P BSE Healthcare TRI has given a CAGR of 14.13%, as against S&P BSE Sensex TRI which has given a CAGR of 11.28% 90 80 S&P BSE Healthcare TRI S&P BSE Sen
Slide 19: Update on UTI Healthcare Fund
Update on UTI Healthcare Fund 19
Slide 20: UTI Equity Investments Process – Score Alpha
UTI Equity Investments Process – Score Alpha TEAM PROCESS STRATEGIES • Standardized research methodology • Companies get Operating Cash Flow (OCF) & Return on Capital Employed • Team driven approach (RoCE) ratings based on their previous 5 • Support diverse years financials strategies • Discussions
Slide 21: Investment Strategy
Investment Strategy Focus on businesses principally engaged in Healthcare & Pharma Bottom – Up Stock picking with emphasis on potential long-term growth High preference for companies with domestic focus & enriched profitability Focus on companies with technical expertise and sound corporate governan
Slide 22: Current Positioning
Current Positioning Bottom-up stock picking with emphasis on potential long-term growth High preference for companies with domestic focus & steady profitability track record Focus on companies with technical expertise and sound corporate governance Agnostic to market capitalization with bias
Slide 23: Portfolio Snapshot
Portfolio Snapshot COMPANY NAME % NAV % AW Overweight (Top 5) SUN PHARMACEUTICALS INDUSTRIES 12.92 -3.08 COMPANY NAME % NAV % AW AJANTA PHARMA LTD. 4.84 4.08 CIPLA LTD 8.03 0.29 KRISHNA INSTITUTE OF MEDI SCIENCE 4.27 3.38 DR REDDYS LABORATORIES LTD 7.30 -1.54 ERIS LIFESCIENCES LTD. 3.48 3.19 APOLLO
Slide 24: Portfolio Statistics
Portfolio Statistics Quants Market Capitalization Portfolio Composition Month-end AUM INR 733 Cr Fund BM OCF ROCE Total Stock Count 32 Large Cap 44% 49% C1 90% R1 44% Active Share (%) 22.09 Mid Cap 27% 30% C2 10% R2 37% Top-10 Holdings (%) 60.07 Small Cap 30% 21% C3 - R3 20% Quantitative Indicators
Slide 25: Performance Track Record
Performance Track Record Fund vs Benchmark Performance as on 30 June, 2023 Returns (%) Growth of ₹10,000/- Period B: S&P BSE B: S&P BSE Scheme AB: Nifty 50 TRI Scheme AB: Nifty 50 TRI Healthcare TRI Healthcare TRI 1 Year 18.02 20.34 22.91 11,802 12,034 12,291 3 Years 16.43 17.37 24.54 15,783 16,169
Slide 26: Why Invest in UTI Healthcare Fund?
Why Invest in UTI Healthcare Fund? To participate in the growing opportunity of the sector (IPM) that is one of the largest in terms of volume and value globally. To benefit from the growth potential of IPM, market size is expected to grow reasonably well in the next 5-10 years driven by increas
Slide 27: Fund Facts
Fund Facts The primary objective of the scheme is to generate long term capital appreciation by investing predominantly in equity and equity related securities of companies/institutions engaged in the Healthcare Services Sector. Investment Objective However, there can be no assurance or guarantee th
Slide 28: Disclaimers
Disclaimers REGISTERED OFFICE: UTI Tower, ‘GN’ Block, Bandra Kurla Complex, Bandra (E), Mumbai - 400051. Phone: 022 – 66786666. UTI Asset Management Company Ltd (Investment Manager for UTI Mutual Fund) Email: invest@uti.co.in. (CIN-U65991MH2002GOI137867). For more information, please contact the nea
Slide 29: Thank You
Thank You 29 Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
UTI Healthcare Fund — Investor Presentation (June 2023) on 6ix