ICICI Prudential Asset Management Company Ltd. · NSE:ICICIAMC
ICICI Prudential Asset Management — Investor Presentation (June 2014)
27 slides from ICICI Prudential Asset Management's investor presentation, Jun 2, 2014
Slide 1: ICICI Prudential Growth Fund - Series 1
ICICI Prudential _— Growth Fund - Series 1 NFO Period: June 02, 2014 to June 16, 2014 (MICICI > 49/ MUTUAL FUND This product is suitable for investors who are seeking*: Y + Long term wealth creation solution ¢ Aclose-ended diversified equity fund that aims to provide capital appreciation by investin
Slide 2: Tarakki Karein!
(VICICI 7 MUTUAL FUND “= TARAKKI KAREIN! 2 qu ¢ wo wy 6 e OW O
Slide 3: New government emerges with clear majority
No. of Seats Lok Sabha Won by Elections Governing party 2014 282 2009 206 2004 145 1999 182 1998 182 1991 232 1984 404 ICicli if MUTUAL FUND New government emerges with clear majority; exceeds all exit poll expectations This event is a Structural Change for capital markets Over the last 3 decades, w
Slide 4: Sentiment: S&P BSE Sensex
(VICICI MUTUAL FUND = TARAKKI KAREIN! SENTIMENT S&P BSE Sensex 30000 = Markets up post GFC on Maret in election results (+17% on ticipation of 25000 results day on stable govt) ne ND Gon stable NDA Govt and saw 63% ann. returns over the next 20 months A 20000 + Secular bull-run that saw 45% annualis
Slide 5: Last clear majority was in 1984
§VICICI 7 MUTUAL FUND + TARAKKI KAREIN! 900 + S&P BSE Sensex 700 + Clear Majority in 1984 T T T T T T 1983 1984 1985 1986 1987 1988 1989 Ne yy The last time the market saw a clear majority for any govt. was way back in 1984. ource: Bloomberg 5
Slide 6: Tarakki Karein!
(VICICI Fed MUTUAL FUND +" TARAKKI KAREIN! ei’ y /Eé e * EVV OT it
Slide 7: Macro indicators, valuations and sentiment
ICICI 7 MUTUAL FUND ¢ MACRO INDICATORS e Invest when GDP growth is low e Invest when IIP is low e Invest when Fiscal Deficit is improving ¢ VALUATIONS * Invest when earnings have bottomed out ¢ SENTIMENT ¢ Invest when investors are under allocated towards equities
Slide 8: (ICICI
(ICICI MUTUAL FUND ~TARAKKI KAREIN!
Slide 9: Why earnings matter
icici riya sy MUTUAL FUND Sign of good corporate management and efficient use of capital High correlation between earnings and real GDP growth rate Increasing market share leads to high earnings Healthy margins; good financial health echoes in earnings Stock prices are lead indicators of earnings Ef
Slide 10: Sensex earnings and GDP growth correlation
(PICICI PERFORMANCE MUTUAL FUND ” TARAKKI KAREIN! 245 25000 Sensex EPS GDP growth growth 12.0 mums Sensex EPS Growth (%) ——GDP Growth (%) 40.0 224 11.0 35.0 + 20000 20+ 10.0 30.0 + 15000 9.0 25.0 184 8.0 20.0 4 16 + 10000 70 15.0 60 10.0 “ , , + 5000 5.0 5.0 124 = 40 = 0.0 10 tp a a 0 nee eramadnpen
Slide 11: Earnings and stock prices
ICICI _ AND STOCK PRICES MUTUAL FOU = TARAKKI KAREIN! Increasing Earnings and stock price Decreasing Earnings and stock price outperformance underperformance 40% ICICI Bank 1310 60% BHEL 600 40% 500 30% 1060 20% 20% 400 10% 810 0% 300 ° \ 560 -20% 200 0% WY, 40% 100 -40% -10% WY 310 -60% 0 -20% 60 F
Slide 12: Opportunities for earnings expansion
@ICICl | OPPORTUNITIES FOR EARNINGS EXPANSION PRUDENTIAL} MUTUAL FUND ” TARAKKI KAREIN! Economic Regulatory Revival Changes Favourable Company Industry Specific Dynamics Factors Identifying companies where there could be a turnaround based on above parameters, leading to increase in Earnings
Slide 13: Banking: improvement in NPAs
Improvement in NPA’s during NDA regime —— GNPA (%) ——NNPA(%) FY98 Fy99 Fyoo FY01 FY02 FY03 Fyo4 FY05 GDP growth and CNX Bankex mmm GDP Growth (RHS) — CNX Bankex (LHS) FYO2 FYO3 FY04 FYO5 FY06 FYO7 FYO8 ICICI MUTUAL FUND Banking ¢ The new government can take steps to clear supply side bottlenecks, wh
Slide 14: Infrastructure
ICICI MUTUAL FUND Infrastructure 12.0% 10.00% GDP growth (LHS) Infra Spend (% of GDP) 9.00% 10.0% 8.00% 8.0% _ LZ 7.00% 6.00% 6.0% +—__+§¥- | 4 + +4. «.__ 5 > 4-4 i—+ 5.00% 4.00% 40--Eoeeee 7 + 3.00% ovis PE __| 2.00% 1.00% 0.0%. 0.00% FY93 FY97 FYO1 FYO5 FY09 FY13 mas GDP Growth (RHS) —CNX Infra (L
Slide 15: Oil and Gas
(ICICI 5 - : S : i, MUTUAL FUND +” TARAKKI KAREIN! MSCI Oil and Gas 285 —— ROE (%) 10 T T T T T T T T T 2004 2005 2006 2007 2008 2009 2010 2011 2012-2013 ¢ Increase in global crude prices and depreciation of INR led to increase in under recoveries for the Oil marketing companies ¢ Deregulation of di
Slide 16: Industrials
ICIclI a! MUTUAL FUND MSCI Industrials 307 285 26 5 24-5 227 207 18 5 16 5 145 124 10 —— ROE (%) 2004 2008 2006 2007 2008 2009 2010 2011 2012 2013 Debottlenecking projects — which involves lesser capital outlay but which can improve capacity utilization, can be the main focus of the new government.
Slide 17: A Consumer Discretionary company
icici MUTUAL FUND A Consumer Discretionary company ato ¢ Due to curbs on gold imports in 2013, the wool A stock price of the company was immediately N , impacted on the expectations of fall in “70 th h earnings. “ J ¢ We believe that with the CAD situation under as control, the regulator is likely t
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Slide 19: An Auto Company
2300 2200 2100 2000 1900 1800 1700 1600 1500 we i" ts ot ow ov ow MUTUAL FUND An Auto Company Markets had expected a recovery on passenger car segment. The expectations were that strengthening of INR can be beneficial for the company. The company had invested in new plant, which could help in meetin
Slide 20: A Large Cap Bank
2800 MUTUAL FUND A Large Cap Bank 2600 2400 2200 2000 1800 1600 Neen Wan 1400 A we b nN we no ma ov & "ab awe Re Markets had expected a recovery in Economy. There was an opportunity in the counter when stock price slumped as large amount of NPA and restructured loans were recognized in the financial
Slide 21: A Cement Company
ICICI ww MUTUAL FUND A Cement Company 90 80 * The company has high debt on its balance | sheet and is in the process of deleveraging ” | cycle. 60 vm ¢ Softening of interest rates and improvement so Sy in demand for the cement industry may help 40 \ a | improve earnings. 30 01-Jan-14 01-Feb-14 = 01-
Slide 22: ICICI Prudential Growth Fund - Series 1
(ICICI | ry a f ICICI Prudential Growth Fund - Series!
Slide 23: Fund overview and investment approach
ICICI MUTUAL FUND ¢ A3 year close ended equity fund investing in 40-60 stocks# ¢ Aims to provide long-term capital appreciation by: ¢ Identifying companies which are likely to see growth in earnings over next 3 years period. ¢ Investing across market cap with a bias towards mid & small cap space, In
Slide 24: Investment process
(ICICI sy MUTUAL FUND = TARAKKI KAREIN! Investable Universe (Companies with Potential Profit or EPS growth > Sensex Profit or EPS growth) Data Integrity Screens Company Characteristics + Strong competitive edge * Sustainable market position * Proven business model * Financial Strength * Business Dur
Slide 25: Scheme details
ICici MUTUAL FUND Type of scheme A Close ended equity scheme Investment Objective The investment objective of the Scheme is to provide capital appreciation by investing in a well-diversified portfolio of equity and equity related securities. However, there can be no assurance that the investment obj
Slide 26: Disclaimer
ICIcI MUTUAL FUND Mutual Fund investments are subject to market risks, read all scheme related documents carefully. All figures and other data given in this document are as on 30th April 2014 unless stated otherwise. The same may or may not be relevant at a future date. The AMC takes no responsibili
Slide 27: For more information
(VICICI —" TARAKKI KAREIN! For more information, please log on to www.icicipruamc.com
ICICI Prudential Asset Management Company — Investor Presentation (June 2014) on 6ix