Hdfc Asset Management Co. Ltd. · NSE:HDFCAMC
Hdfc Asset Management — Investor Presentation (January 2025)
31 slides from Hdfc Asset Management's investor presentation, January 2025
Slide 1: Invest in the things that make your day!
Invest in the things that make your day! Invest in your everyday with HDFC NON-CYCLICAL CONSUMER FUND (An open-ended equity scheme following non-cyclical consumer theme) For product labelling & riskometer refer page 29
Slide 2: Factors driving India's consumption in the coming decades
Factors driving India’s consumption in the coming decades India's consumption Demographic Premiumization Formalization Digitization at an inflection Dividend point Countries like India has the Changing income Shift from Changing China saw a sharp largest and one of pyramid and unorganized to consumpt
Slide 3: India's consumption at an inflection point
India’s consumption at an inflection point Per capita income crossing the critical US$2,000 mark India’s per capita income is expected to go up from US$2,278 in FY22 to > US$5,000 by FY32 and this is expected to drive strong consumption growth across categories China saw strong growth across consumpt
Slide 4: Demographic Dividend
Demographic Dividend India has the largest and one of the youngest populations in the world Demographic Dividend - India has the largest and also one of the youngest populations in the world at ~1.4 bn. India’s median age as of 2022 is ~28 years compared with ~39 and ~40 for USA and China, respectiv
Slide 5: Premiumization
Premiumization Changing income pyramid and increasing disposable income leading to premiumization Income pyramid changing dramatically with significant increase in upper middle income and rich income groups in the next 10 years Changing income pyramid can lead to higher premiumization trends across c
Slide 6: Premiumization: Changing face of the Indian consumer
Premiumization Changing face of the Indian consumer Then Now Limited branded options Multiple branded options available with available for apparels/ footwear evolution of formal/ casual/ ethnic/ athleisure apparels/footwear Home delivery/Quick Service Homemade food with limited Restaurants replacing
Slide 7: Premiumization to drive higher revenue growth
Premiumization to drive higher revenue growth Leading FMCG player detergent portfolio Detergents Industry - Premium segment value contribution increasing at a brisk pace Price Index Detergents-Premium Segment Contribution increasing 3.0X Premium 100% 17% 22% 80% 31% 25% 21% Premium 1.6X Mid 60% 19%
Slide 8: Formalization of economy leading to shift from unorganized to organized
Formalization of economy leading to shift from unorganized to organized Multiple reforms including GST, corporate tax cuts and higher digitization is leading to higher formalization of the economy Higher formalization of economy is leading to market share gains for organized players leading to highe
Slide 9: Digitization
Digitization Changing consumption landscape - improving access to products and services Digital penetration in India is expected to grow with total online shoppers expected to be almost double in 2028 from 2023 levels of 150-180m This is on account of increasing penetration of smart phones, low mobi
Slide 10: Why Now?
HDFC Non-Cyclical Consumer Fund Why Now? Refer disclaimer on page 30 10/31
Slide 11: Near term factors that could benefit the theme
Near term factors that could benefit the theme Improving macroeconomic factors for consumption • Lower Inflation trajectory • PFCE (Private Final Consumption expenditure) growth in 1HFY25 picked up after muted FY24 Welfare spends - Sharp jump in State governments welfare spends • Increased revenue exp
Slide 12: Consumption remains a major contributor to GDP
Consumption remains a major contributor to GDP Domestic Private Consumption contributes 59% of India’s GDP and has grown faster than Nominal GDP in the last 10 years Major constituents of Private consumption are Foods & Beverages, Clothing and Footwear, Housing and Fuels, Transportation, Healthcare,
Slide 13: Low inflation and good monsoon to uplift consumption outlook
Low inflation and good monsoon to uplift consumption outlook High inflation has historically led to lower consumption growth The rise in inflation post the pandemic is now slowing down Monsoon in 2024 being above normal is a potential boost to consumption India witnessing higher than average monsoon In
Slide 14: Government spending has high correlation to consumption cycles
Government spending has high correlation to consumption cycles Historically, consumption growth in India has high correlation with welfare spending by government. High government fiscal transfers for welfare spending during FY08-14 (MGNREGA scheme, higher MSP growth etc.) led to a strong consumption
Slide 15: US vs India - Consumption trends below pre-pandemic levels in India
US vs India- Consumption trends below pre- pandemic levels in India US consumption trends recovered to pre-pandemic levels helped by strong ‘ Stimulus and Relief Package’ also known as CARES act which included One-time, direct cash payment of US$1,200 per person plus US$500 per child. India Consumpt
Slide 16: State governments led increase in welfare spending gaining momentum
State governments led increase in welfare spending gaining momentum Large states including Maharashtra, Madhya Pradesh, Karnataka, Telangana, Andhra Pradesh etc have announced welfare schemes worth> Rs 3 lakh crores in the last 1 year. Union Budget 2025 saw increase in revenue expenditure vs interim
Slide 17: Rural consumption on recovery path
Rural consumption on recovery path Commentary from the companies is positive on rural consumption. Above normal monsoons and lower inflation to help boost rural growth. Rural consumption growth now ahead of Urban consumption growth on yearly basis based on commentary from the management. Turnaround i
Slide 18: Recent cycle in consumer has been K-shaped
Recent cycle in consumer has been K-shaped K-shaped growth refers to high growth in urban / high-income segments and low growth in rural / low-income segments. In the past 5 years, India has seen higher growth in high-income related consumption, but the mass consumption segment has struggled. Rural
Slide 19: What is Non-Cyclical Consumer theme
What is Non-Cyclical Consumer theme Demand for non-cyclical consumer goods and services remains relatively stable across different phases of the economic cycle. Sectors such as FMCG, Consumer Durables, Consumer Services, healthcare services are part of the theme Non-Cyclical Cyclical Packaged Foods
Slide 20: Valuation - Trading in-line with last 5 years average PE multiple
Valuation - Trading in-line with last 5 years average PE multiple Consumption sector valuations are at 44x 1 yr Fwd P/E Ratio which is broadly in line with (5% above) last 5 years average Earnings growth surprise and higher visibility has led to valuation re-rating in the consumption stocks in the l
Slide 21: Introducing HDFC Non-Cyclical Consumer Fund
Introducing HDFC Non-Cyclical Consumer Fund Refer disclaimer on page 30 21/31
Slide 22: Investment strategy
Investment strategy Investment team at HDFC MF has a significant experience and understanding of the consumption sector We follow bottom-up stock selection approach for portfolio construction Secular Core Multicap Focus on growth/ Portfolio Strategy Leaders Re-rating Core of the portfolio (at least C
Slide 23: Portfolio quants and details
Portfolio quants and details Top Sectors Sector Weight Stock Weight / Number Retailing 22.79 Diversified FMCG 15.52 AUM INR 919 crores Consumer Durables 11.58 Automobiles 7.26 Number of stocks 47 Personal Products 6.41 Telecom - Services 5.81 Top 10 stocks 49% Leisure Services 5.54 Beverages 4.51 Equ
Slide 24: Returns Performance
Returns Performance^ NAV as at December 31, 2024 ₹14.263 (per unit) Value of ₹ 10,000 invested Additional Scheme Benchmark Additional Date Period Benchmark Scheme Benchmark Returns (%) Returns (%) # Benchmark Returns (%) ## (Rs.) (Rs) # (Rs) ## Dec 29, 23 Last 1 Year 22.41 19.59 10.00 12,262 11,977
Slide 25: Risks and Mitigants
Risks and Mitigants Risks Mitigants India is currently witnessing high growth, and growth expectations from government and Growth in the aggregate consumption multilateral agencies are high is dependent on the growth in India’s Consumption of basic items don’t move significantly basis small changes i
Slide 26: Why invest in HDFC Non-Cyclical Consumer Fund?
Why invest in HDFC Non-Cyclical Consumer Fund? Consumption theme is likely to unfold in India with key fundamental drivers in place: Inflection point in per capita income: India is on the cusp of entering a phase of accelerated consumption with per capita income crossing US$2,000 mark. Consumption in
Slide 27: Fund Facts
Fund Facts Particulars HDFC Non-Cyclical Consumer Fund Type of Scheme An open ended equity scheme following non-cyclical consumer theme To generate long-term capital appreciation by investing predominantly in equity and equity related securities of companies with a focus on Investment Objective non-
Slide 28: Asset allocation
Asset allocation Under normal circumstances, the asset allocation (% of Net Assets) of the Scheme's portfolio will be as follows: Minimum Allocation Maximum Allocation Types of Instruments Risk Profile (% of Net Assets) (% of Net Assets) Equity and Equity related instruments of 80 100 High to Very Hi
Slide 29: Product Labelling and Riskometer
Product Labelling and Riskometer HDFC Non-Cyclical Consumer Fund (An open ended equity scheme following Riskometer# non-cyclical consumer theme) is suitable for investors who are seeking*: • To generate long-term capital appreciation/ income • Investment in equity and equity related securities of co
Slide 30: Disclaimer
Disclaimer 1 Views expressed herein are as of 30th January 2025 involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied herein. The views explain general market trends in the securities market and a
Slide 31: Thank You
Thank You
HDFC Asset Management Company — Investor Presentation (January 2025) on 6ix