Hdfc Asset Management Co. Ltd. · NSE:HDFCAMC
Hdfc Asset Management — HDFC Technology Fund — Investor Presentation (February 2025)
34 slides from Hdfc Asset Management's investor presentation, Feb 14, 2025
Slide 1: Embrace the Techvolution
1 Embrace the Techvolution Invest in the Potential of the Future HDFC Technology Fund (An open-ended equity scheme investing in Technology & Technology related companies) Refer product labelling & riskometer on page 32 Refer disclaimer on page 33
Slide 2: Why invest in HDFC Technology Fund?
Why invest in HDFC Technology Fund? Increasing tech intensity is a secular trend, across markets and industries Indian IT – Consistent market share gainer Outperformed / evolved across tech cycles Talent is India’s biggest moat in tech world Digitalization in India has long runway for growth Good gr
Slide 3: Increasing Tech Intensity
1 Increasing Tech Intensity A Secular Trend 02 03/34
Slide 4: Technology - Changing the way we live
Technology - Changing the way we live Before After Before After Banking Payments Bank Branches Digital Banking Cash, Cheque/DD UPI, online transfer, E-Rupee Retail Manufacturing Purchasing physically from stores E-Commerce Manual operations in factories Robotic Manufacturing Capital Markets Educatio
Slide 5: Tech penetration is increasing across markets and industries
Tech penetration is increasing across markets and industries Major US Banks increasing their Electronic Systems as a % of Share of Digital in Indian Retail Technology Spends as % of Total Car Cost increasing Transactions Volume increasing Revenues 60% 100% 12% 11% 50% 50% 80% 10% 60% 40% 60% 8% 7% 3
Slide 6: Indian IT
1 Indian IT A Consistent Share Gainer 02 06/34
Slide 7: Indian IT has consistently outgrown Global Spending
Indian IT has consistently outgrown Global Spending 40% Indian IT Exports (% YoY) Indian IT Exports vs Global IT Services Spending (%) 35% 30% Global IT Services spending (% YoY) 16% 14% 25% 14% 20% 12% 15% 10% 10% 8% 6% 5% 4% 0% 2% -5% 0% FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15
Slide 8: Indian IT has evolved stronger through Technology Cycles
Indian IT has evolved stronger through Technology Cycles AI, Data and Cloud Cloud / Digital, Automation Did you know? Growth Drivers Remote Infrastructure management Services, BPO# Top 3 large Indian IT Services firms have USD 1 bn+ revenues Offshoring, Application Outsourcing, ERP** Implementation
Slide 9: India's Technological Prowess expanding into Software in recent years
India’s Technological Prowess expanding into Software in recent years India SaaS*Revenues (USD billion) India SaaS as % of Global SaaS Revenues 40 ~35 9% ~8% 8% 30 7% 20 6% ~5% 12-13 7-8 5% ~4% 10 4% 0 3% 2020 2022 2027E 2020 2022 2027E Number of Indian SaaS firms by ARR* (USD million) 20 15 Did you
Slide 10: The Industry is diverse and gives global exposure
The Industry is diverse and gives global exposure Segment-wise Breakup of Indian IT Industry – FY23 Geographic Breakup of Indian IT Revenues (%) - FY24 10% 28% 62% 22% Americas Europe Rest of the World 54% 24% USD INR Depreciation favouring Indian IT Revenue Growth 25% 20% 2.5% 15% 10% 17.2% 19.7% 5
Slide 11: Talent
1 Talent India’s Key Moat in Tech World 02 11/34
Slide 12: India ranks amongst the best in Tech Talent Availability
India ranks amongst the best in Tech Talent Availability in addition to a Large Talent Pool Indian Workforce highly skilled One of the top in terms of AI skills 2nd largest in terms of *AI/ML BDA talent 3rd globally, in terms of installed supply penetration pool, globally of Cloud professionals. Cou
Slide 13: Tech Talent is scarce globally; Indians key for the Ecosystem
Tech Talent is scarce globally; Indians key for the Ecosystem Tech unemployment rate in the US has historically Indians account for ~75% of H1B visas (skilled been lower than the overall unemployment immigrant visa) granted by the US rate An indicator of high demand US Unemployment Rate (%) Overall
Slide 14: Global Companies expanding in India to leverage the Talent Base
Global Companies expanding in india to leverage the Talent Base Number of Global In-house Centers (GIC) in India GIC Revenues (in USD billion) 1,800 1,700 1,570 70 65 1,600 1,400 60 1,250 1,200 50 ~12.7% CAGR 981 1,000 40 800 30 600 285 20 400 11 200 10 0 0 FY00 FY10 FY19 FY23 FY24 FY09 FY14 FY17 FY
Slide 15: Digitalization in India
1 Digitalization in India Long Runway for Growth 02 15/34
Slide 16: Digitalization in India – Long Runway for Growth (1/2)
Digitalization in India – Long Runway for Growth (1/2) India’s Internet Penetration has a A large section of people with E-commerce is now >20% of long way to go access to internet are still Total Retail Sales in US and China untapped by online businesses E-commerce Penetration in Total Retail Sales
Slide 17: Digitalization in India – Long Runway for Growth (2/2)
Digitalization in India – Long Runway for Growth (2/2) Size of the Indian E-commerce Market is increasing Share of Digital Insurance Premia expected to rise 350 325 Digital Premium as % of Total Industry Premiums 300 5.7% In US$ billion 6% 250 5% 200 163 4% 145 2.8% 150 123 3% 2.3% 102 100 84 2% 67
Slide 18: Why Technology now?
1 Why Technology now? 02 18/34
Slide 19: Healthy Fundamentals and Superior Dividend Yield
Healthy Fundamentals and Superior Dividend Yield BSE TECk Index has healthier fundamentals Dividend Yield - relative to BSE 100 Index BSE TECk Index vs BSE 500 Index 3 70% Key Financial Parameters - 10 year CAGR / Average 63% 60% 2.5 50% 2 40% 1.5 30% 24% 26% 20% 1 20% 14% 11% 9% 11% 11% 10% 0.5 10%
Slide 20: Valuations are reasonable relative to the Broader Market
Valuations are reasonable relative to the Broader Market BSE TECk Index – 1-year Forward P/E (x) Premium / Discount of BSE TECk Index to BSE 500 70% 35 60% 30 50% 40% 25 30% 20% 20 10% 0% 15 -10% 10 -20% Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Jan-18 Jul-18 Jan-19 Jul-19 Jan-20 Jul-20 Jan-21 Jul-2
Slide 21: Global Growth – A Key Driver of IT Services Spending
Global Growth – A Key Driver of IT Services Spending IT Spending is correlated to Global Economic Growth Global Economic growth is expected to slow down in 2024, relative to 2023 GDP vs IT Services Spending (% Y-o-Y) Real GDP Growth (% Y-o-Y) 15% 4.0% 5% 3.0% -5% 2.0% -15% 1.0% 2003 2004 2005 2006 2
Slide 22: About HDFC Technology Fund
1 About HDFC Technology Fund 02 22/34
Slide 23: Investment strategy
Investment strategy Aim to invest core of the portfolio (> 80%) in stocks in technology & technology related Core Portfolio companies within the basic industries like IT services, software, consulting, and outsourcing companies etc IT products and hardware including computers, electronic components,
Slide 24: Current Portfolio
Current Portfolio Top 10 Constituents Key Portfolio Characteristics Company % to Net Assets Number of Stocks 28 Infosys Limited 16.99% Top 5 Equity and Equity-related holdings (%)* 53.06% Tata Consultancy Services Ltd. 13.74% Total Equity and Equity-related Holdings (%)* 93.96% Bharti Airtel Ltd. 10
Slide 25: FY Performance – BSE TECk Index and BSE 500 Index
FY Performance – BSE TECk Index and BSE 500 Index Financial Out/Underperformance vs BSE TECk Index (TRI) BSE 500 Index (TRI) Year BSE 500 Index FY2008 -14% 25% -39% FY2009 -38% -42% 4% FY2010 79% 99% -19% FY2011 19% 9% 11% FY2012 -7% -8% 1% BSE TECk Index has FY2013 11% 7% 5% FY2014 27% 19% 8% outpe
Slide 26: Returns – HDFC Technology Fund
Returns – HDFC Technology Fund Scheme Name Last 1 year* Since inception** HDFC Technology Fund 23.96% 27.94% Benchmark BSE TECk Index (TRI) 17.19% 23.89% Outperformance over the Benchmark 6.77% 4.05% *Source: MFI Explorer, Bloomberg. Returns as on January 31, 2025. Inception Date of HDFC Technology
Slide 27: Risks and Mitigants
Risks and Mitigants Risks Mitigants Dependence on global economic Value proposition of tech is evolving from costs / efficiency to revenue growth / macro variables generation, making tech spends more sticky across economic cycles Sharp currency moves impact near-term profitability. In the long term,
Slide 28: Know your Fund Manager
Know your Fund Manager 1 Balakumar B Fund Manager and Senior Equity Analyst Balakumar has over 13 years of experience in equity research, consulting, application development He joined HDFC Asset Management Company Ltd in September 2021. Prior to that, has worked with Sanford C. Bernstein (India) Pri
Slide 29: Fund Facts
Fund Facts 1 Particulars HDFC Technology Fund Type of Scheme An open-ended equity scheme investing in Technology & Technology related companies To provide long-term capital appreciation by investing predominantly in equity and equity related securities of Technology & Investment Objective Technology
Slide 30: Asset Allocation
Asset Allocation 1 Under normal circumstances, the asset allocation (% of Net Assets) of the Scheme's portfolio will be as follows: Minimum Allocation Maximum Allocation Type of Instruments (% of Net Assets) (% of Net Assets) Equity and Equity related instruments of Technology & Technology related c
Slide 31: Scheme Performance
Scheme Performance 1 Performance^ - Regular Plan - Growth Option NAV as at January 31, 2025 ₹14.119 (per unit) Value of investment of (₹) 10,000 Scheme Benchmark Additional Benchmark Period Returns (%) Returns (%)# Returns (%)## Scheme (₹) Benchmark (₹)# Additional Benchmark (₹)## Last 1 Year 23.96
Slide 32: Product Labelling and Riskometer
Product Labelling and Riskometer 1 HDFC Technology Fund (An open-ended equity Riskometer# Name of the Benchmark scheme investing in Technology & technology related and Riskometer# companies) is suitable for investors who are seeking*: BSE Teck Index (TRI) • To generate long-term capital appreciation
Slide 33: Disclaimer
Disclaimer 1 The presentation dated February 14, 2025 has been prepared by HDFC Asset Management Company Limited (HDFC AMC) based on internal data, publicly available information and other sources believed to be reliable. Any calculations made are approximations, meant as guidelines only, which you
Slide 34: Thank you!
Thank you!
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