Motilal Oswal Nifty Alpha 50 ETF · NSE:MOALPHA50
Motilal Oswal Nifty Alpha 50 ETF — Motilal Oswal Asset Management — Investor Presentation (July 2021)
33 slides from Motilal Oswal Nifty Alpha 50 ETF's investor presentation, July 2021
Slide 1: Value Strategy
MOTILAL OswaL BUY RIGHT ASSET MANAGEMENT| Value Strategy July 2021 THINK EQUITY. THINK MOTILAL OSWAL.
Slide 2: Portfolio Snapshot
PORTFOLIO SNAPSHOT QGLP in PRACTISE Market Cap Mix Quality RoE: 19% Sector Mix Small Cap, 1% Others, Auto and Mid Cap, 12% Auto Anc, 28% 10% TMT, 9% Growth 23% PAT CAGR over FY2` – 23E Insurance Consumer, , 18% 7% Portfolio Tilt towards Long Term Themes Healthcare, Longevity of Value Migration, Refo
Slide 3: Quality
Quality QUALITY OF BUSINESS QUALITY OF COMPANY QUALITY OF MANAGEMENT RoE > Cost of Equity Unquestionable Profit Pool Integrity Consumer Facing Demonstrable Positive Operating Cash Flow Competence Sustainable Competitive Disruption Quotient Growth Mindset Advantage Competitive Intensity Skin In the G
Slide 4: Growth: Revenue Growth and Margin Trajectory
Growth REVENUE GROWTH VOLUME PRICE MIX MARGINS GROSS OPERATING FINANCIAL REVENUE GROWTH High G G2 Low X g Lower Higher MARGIN TRAJECTORY THINK EQUITY 18 THINK MOTILAL OSWAL
Slide 5: Growth in the Portfolio
Growth in the Portfolio G 18% G2 51% SBI CARDS High DR. REDDY'S LABORATORIES MUTHOOT FINANCE LARSEN & TOUBRO LIC HOUSING FINANCE TUBE INVESTMENTS OF INDIA MAX FINANCIAL REVENUE GROWTH AU SMALL FINANCE BANK MARUTI SUZUKI HDFC LIFE INSURANCE HDFC BANK HINDUSTAN UNILEVER BHARTI AIRTEL HOME FIRST FINANC
Slide 6: Longevity Framework
Longevity Framework Asset Moats 6% Reforms, 19% Immunity, Independence and In Home Value Migration, 49% 25% THINK EQUITY 18 THINK MOTILAL OSWAL
Slide 7: Immunity Boost – Increasing Awareness towards Health
I I I - Immunity, Independence and In Home Consumption Immunity Boost – Increasing Awareness towards Health Right Medicine and Formal Healthcare Dosage Increasing Insurance Diagnostics Healthcare spend to increase GDP at 1.5 – 2x of GDP GDP per capita HC spend as a % of GDP HC spend as a % of GDP Ye
Slide 8: Independence - Insurance
I I I - Immunity, Independence and In Home Consumption Independence - Insurance A structural growth story that comprises a large portion of the portfolio Little to no risk on the Capital efficient Multi-decadal growth Deeply moated brands asset side businesses opportunity • Barriers to entry: Brand
Slide 9: Insurance – an underpenetrated market
I I I - Immunity, Independence and In Home Consumption Insurance – an underpenetrated market A structural growth story that comprises a large portion of the portfolio Demand Economic Designation A long runway for growth Companies can charge for moats Low coverage provides a large opportunity for lif
Slide 10: In Home Consumption – More and Better!
I I I - Immunity, Independence and In Home Consumption In Home Consumption – More and Better! Income Distribution by State 45% 39.66% 40% 35% 29.41% % of the population 29.32% 30% 25% 20% 15% 10% 5% 1.62% 0% < USD 1,000 USD 1,000 to USD 2,000 USD 2,000 to USD 4,000 > USD 4,000 GDP / Capita • About 2
Slide 11: Value Migration
Value Migration Value Migration THINK EQUITY 11 THINK MOTILAL OSWAL Private and Confidential
Slide 12: Value Migration – 25 Years and Counting
Value Migration Value Migration – 25 Years and Counting • Consistent increase in share of incremental credit disbursal • Consistent market share gain by private banks at the expense of PSB’s • Better project finance evaluation skills, risk management, dynamic leadership/managment and investments in
Slide 13: Reforms – NNPA numbers back to pre-stress
Reforms Reforms – NNPA numbers back to pre-stress Net NPA (%) ICICI Bank 6.0 5.5 5.4 Axis Bank 5.0 • Net NPA numbers back to pre-covid 3.8 4.0 levels 3.1 3.0 2.3 2.3 2.3 • Strong banks flush 2.1 2.2 1.6 1.6 with liquidity - 2.0 1.6 1.6 1.1 1.1 1.1 ready to fuel the 1.0 1.0 0.7 0.8 0.7 recovery led 0
Slide 14: Longevity
Longevity 1 2 I I I - Immunity, Independence and In Home Reforms (IBC, GST, RERA,E-Gov) Consumption IN HOME IMMUNITY HUL Dr Reddys Jubilant L&T Glaxo ICICI Bank Bharti Thermax INDEPENDENCE Maruti SBI Cards HDFC Life Max Financial 3 4 Value Migration Asset Moats HDFC Bank Petronet LNG TI India Kotak
Slide 15: Price
Price “It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price” “There is no Value without growth. There is no such thing as Value Stocks or Growth stocks. They are not two different categories!” Warren Buffet FY20 FY21 FY22e FY23e Earnings 12% 21% 24% 22%
Slide 16: Portfolio Construct
Portfolio Construct THINK EQUITY THINK MOTILAL OSWAL
Slide 17: Portfolio construct
Portfolio construct Sector Split Financials (Lenders) 34% Insurance 18% TOP 10 Stocks 65% Health Care 8% Autos 10% Active Ratio 71% Consumer 7% Telecom and Technology 9% Weighted Market Cap at INR 2,00,224 Crores Value Strategy Inception Date: 18th Feb 2003; Data as on 30th June 2021; Data Source: M
Slide 18: Portfolio Positioning
Portfolio Positioning Pharmaceuticals IT Consumer Discretionary Consumer Staples Insurance Banking
Slide 19: High Conviction Ideas
Q G High Conviction Ideas L P THINK EQUITY THINK MOTILAL OSWAL
Slide 20: ICICI Bank
1 ICICI BANK Best man at the helm in what was always a good ICICI Bank under the leadership of Mr Sandeep Bakhshi; in our view should be a very different bank than in the past. All our checks suggest a clear franchise focus on ‘risk’; in what’s already a good liability franchise (45%+ CASA). Signifi
Slide 21: Max Financials
2 MAX FINANCIALS Strong underlying insurance business With best in class metrics (20%+ VNB Margins, 20% RoEVs) and growth track record (20%+ EV compounding). Axis Bank overhang on verge of resolution Axis Bank emerging as the single largest shareholder with 18% stake, subject to regulatory approvals
Slide 22: Hindustan Unilever
3 HINDUSTAN UNILEVER Lowered competition Over the last 4-5 years, competition intensity has decreased in the FMCG intensity space in India. This has increased margins for all players in the market. It is likely to continue over the next few years. Increased exposure to Food With the acquisition of G
Slide 23: Dr. Reddy's
4 Dr. REDDY Promoter owned – • New CEO was well empowered and consequently had taken hard steps to re- Professionally run shape the business to become fitter, profitable and more predictable. Margins have moved from 20% to 25% in 2 years and RoE from 11% to 16%. Strong R&D capability • With a strong
Slide 24: HDFC Bank
5 HDFC Bank Multi-decade track • Stellar track record of minimum 16% RoE and minimum 19% growth in any given record year over the last 20 years; despite multiple corporate and retail cycles over these years Strong liability franchise • 42% CASA, 5.0% cost of funds; on the asset side equal mix betwee
Slide 25: HDFC Life
6 HDFC LIFE Best brand, • HDFC Life; enjoys the best brand equity with the ‘HDFC’ brand distribution, • Has the most entrenched distribution architecture with over 200 partners innovation culture for distributing its life insurance products • Innovation leader Margin expansion • Strong top-line grow
Slide 26: Performance
Performance THINK EQUITY THINK MOTILAL OSWAL
Slide 27: Fund Performance
Fund Performance CY18 CY19 CY20 CY21TD* Since Inception Value (Including Dividends) -4.8% 21.6% 4.8% 14.0% 20.1% Nifty (Total Returns) 4.6% 13.5% 16.1% 13.2% 17.4% Alpha -9.5 8.1% -11.4 0.8% 2.7% Value Nifty 50 TRI 54.6 44.2 20.1 15.3 16.9 15.0 15.1 17.4 14.8 12.9 12.7 12.2 10.7 11.2 11.3 12.3 11.0
Slide 28: Portfolio Earnings Performance
Portfolio Earnings Performance Q4FY19 Q1FY20 Q2FY20 Q3FY20 Q4 FY20 Q1FY21 Q2FY21 Q3FY21 Q4FY21 Value Portfolio 26% 22% 25% 20% -6% -14% 26% 28% 83% Earnings Nifty 15% 11% -1% 12% -20% -25% 20% 18% 76% Earnings Economic Value (Earnings) Market Value (Prices) 350 150 300 144 295 140 250 249 130 133 20
Slide 29: Investor Performance
Investor Performance Value has delivered >10% return over 5 Years 74% Rolling Returns Value PMS Nifty of the time compared to 5 year rolling returns < 0% 1% 0.1% 66% of Nifty 5 year rolling returns > 10% 74% 66% 5 year median return 13.2% 12.7% 3 year alpha (instances) 54% Value has delivered Alpha
Slide 30: Thought leader
Thought leader Raamdeo Agrawal Chairman, MOFSL • Raamdeo Agrawal is the Co-Founder of Motilal Oswal Financial Services Limited (MOFSL). • As Chairman of Motilal Oswal Asset Management Company, he has been instrumental in evolving the investment management philosophy and framework. • He is on the Nat
Slide 31: Fund management team
Fund management team Shrey Loonker • Shrey has been managing our PMS Strategy since August 2017. • He has 14 years of overall experience in equity research and fund management. • Before joining Motilal Oswal AMC, he was associated for 11 years with Nippon India MF and last as Fund Manager – Banking
Slide 32: Disclaimer
Disclaimer This presentation has been prepared and issued on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this document is for general purposes only and not a complete disclosure of every material fact and terms an
Slide 33: Thank You!
Thank You! Stay safe THINK EQUITY THINK MOTILAL OSWAL
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