Hdfc Asset Management Co. Ltd. · NSE:HDFCAMC

Hdfc Asset Management — Investor Presentation (April 2024)

28 slides from Hdfc Asset Management's investor presentation, April 2024

  1. Slide 1: Step into the Amrit Kaal with HDFC Manufacturing Fund

    STEP INTO THE AMRIT KAAL WITH HDFC MANUFACTURING FUND NFO PERIOD: 26th April to 10th May, 2024 Refer disclaimer and Product label on page 26 & 27.

  2. Slide 2: India economy FY23 to FY30E projections

    FY23 FY30E Nominal GDP 3,353 2X 7,000 Manufacturing GVA 453 2.8X 1,281 Overall exports 778 2X 1,552 Merchandise exports 453 2.6X 1,198 Overall capex, GCF 1,080 2X 2,112 All figures in USD bn Source: PIB, UBS, Morgan Stanley Research GDP -Gross Domestic Product GVA- Gross value added ₹ GCF - Gross Cap

  3. Slide 3: Refer disclaimer and Product label on page 26 & 27.

     Refer disclaimer and Product label on page 26 & 27. 02 03

  4. Slide 4: Most Asian peers have higher share of manufacturing in GDP

    Average Real GDP Manufacturing Manufacturing share at Country High growth growth in high share at start of the end of high phase growth phase high growth phase growth phase Thailand 1985-1991 9.3% 21.9% 28.2% China 1990-2005 9.8% 9.1% 32% Indonesia 1983-1996 6.3% 13.4% 24.1 Vietnam 2010-2022 6.1% 19

  5. Slide 5: Convergence of Several Enablers to provide Multi Decadal Growth

    Convergence of Several Enablers to provide Multi Decadal Growth   ­€‚ ƒ ­€ƒ Large Consumer base Large & skilled Labour pool Focus on Atmanirbharta Large Export opportunity in the Multipolar World + Cost advantages vs peers + Low leverage + higher capacity utilization Improving infras

  6. Slide 6: What ailed Manufacturing over the years? Steps taken to address these

    „ What ailed Manufacturing Steps taken to address these Outcomes over the years? issues National Logistics Policy - Rank improved from 54 (in 2014) to 38 (in 2023) in High logistics costs Road and Rail infrastructure World Bank's Logistics Performance Index Investments in roads, power Road construct

  7. Slide 7: India is Fastest Growing Consumer Market

    € † India is Fastest Growing Consumer Market ..providing sufficient scale to support local manufacturing Trend in Consumption % India Share in World (Ex China) x India’s Rank in the World (Ex China) demand 90% The size of the bubble is Smart Phone Room ACs Fully Automatic Referigerators Cars 80% Phil

  8. Slide 8: India's merchandise export market share to increase from 1.8% to 3.5% by 2031

    ‡ ˆ ‰ „ India’s merchandise export market share to increase from 1.8% to 3.5% by 2031 implying CAGR of ~11% Merchandise exports is expected to grow faster than services India's Exports (US$ bn) India's Share in World Exports 2,000 7% 6.4% 6% 1,500 683 5% 4.4% 4.5% 4% 3.5% 9% 1,000 3% 2.4% 1.8% 2%

  9. Slide 9: India to become the largest pool of labor supply with lowest labour cost

    €‚ Š‹‚†€‚‰ India to become the largest pool of Labor supply…. ...with lowest labour cost globally Addition in 30-60 age cohorts by 2045 Average Monthly Earnings of Employees in Manufacturing Sector Increase/Decrease in age (30-60) population by 2045 US$ 200 6000 152 5058 150 5000 (mn people) 100 400

  10. Slide 10: Projected exports by sector, FY28

    ‰‚ Œ FY28 Projected exports (US$ bn) Projected exports CAGR (FY22-28) Chemical ~$110 - $130 19% - 23% Pharma ~$45 - $50 16% - 18% Industrial machinery ~$70 - $75 18% - 20% Electrical & electronics ~$120 - $145 35% - 40% Automotive ~$45 - $55 15% - 18% Textile & apparel ~$95 - $110 13% - 16% Source:

  11. Slide 11: China vs India production cost

    ‚‰Š Š Production cost per unit to manufacture a Fan Cost benefit for India vs Peer Manufacturing Nations China vs India US$ Cost assuming Total Production per year - 8,254,615 Estimated Cost for producing a fan in US$ China India 13 12.5 Cost of Goods Sold 4.25 4.67 12 Labour cost 0.83 0.34 11 10 9

  12. Slide 12: Infrastructure improvements over the last 10 years

      ‰  Œ‰ 1.76x in 2023 vs. 2014 2.5x Rail Network Electrified 2x in last 10 years 2.5x in 2023 vs 2015, in last 10 years (1,535 vs. 871 MTPA) (1.5 lakh km highway network) Target 500 GW by 2030 (85% vs. 33%) Average TAT improved DFC – Rail has increased Road avg kms/truck/day Peak power shortage of

  13. Slide 13: PLI schemes, corporate tax rates and defence production

    Œ  Snapshot of PLI schemes and their impact Base Corporate Tax Rate in Asian Economies Indian Defence production could grow 4x by 2030 Number of sectors: 14 30% Indian Defence Production (US$ bn) 25% 43 22% Actual Investment Incremental Domestic till FY23 Production till FY23 20% +18.6% 15% Exports

  14. Slide 14: Manufacturing share of new company registrations and FDI

    †‡€ Share of Manufacturing Sector in New Company Manufacturing FDI (3 year rolling avg) (US$bn) Registrations 30% 17 15.0 15.3 28% 28% 15 13.7 13.7 13.0 13.0 13.0 12.7 13 12.3 12.3 26% 10.3 10.7 24% 11 22% 22% 8.3 21% 9 8.0 20% 7 18% 5 2015 2018 2022 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY1

  15. Slide 15: Mobile phones: import item to export success

    ‚‚‰‡ Mobile phones were a large import item with import mix of 78% Over time local manufacturing ecosystem developed supported by PLI Value of production has increased ~7x and exports by 60x since FY16 India’s rank in global mobile phone exports has improved from 178 in FY16 to 5 in FY23 Production

  16. Slide 16: iPhone production ramping up in India

    ‘ ‚ ƒ ’ iPhone Production ramping up in India Samsung led a large push in exports from Vietnam, and today accounts for >US$65bn of goods exports Year Models Global Shipment Share (%) US$ bn Samsung's Vietnam subsidiaries' exports, US$ bn 70 as % of Vietnam's merchandise exports, RHS 66 30% 2017 iPho

  17. Slide 17: Refer disclaimer and Product label on page 26 & 27.

    “ Refer disclaimer and Product label on page 26 & 27. 02 17

  18. Slide 18: Core Portfolio, Investment Style, Stock Selection, Concentration, Market Cap

    ‚‰ Core Portfolio Investment Style / Portfolio Market Cap Stock Selection Concentration Core of the portfolio Stock selection will be Reasonably well Flexible across market (at least 80%) will be based on bottom-up diversified portfolio capitalisation invested in stocks that research ideas which are

  19. Slide 19: Manufacturing covers ~37% of the overall market cap, well diversified amongst sectors

    ‰‚† Number of companies Market Cap (Rs lac cr) % Manufacturing Universe (Mcap >1000cr) 691 154.34 100% By Sector The Fund shall invest in companies: Capital Goods 190 25.89 17% Oil, Gas & Consumable Fuels 12 25.02 16% that are engaged in manufacturing Automobile and Auto Components 72 24.19 16% act

  20. Slide 20: NIFTY India Manufacturing Index has outperformed broader Indian equity markets

     ‰Š Period CAGR returns Volatility Return-risk NIFTY India NIFTY India NIFTY India Manufacturing NIFTY 500 NIFTY 50 Manufacturing NIFTY 500 NIFTY 50 Manufacturing NIFTY 500 NIFTY 50 Since Inception 15.6% 14.9% 14.7% 21.4% 20.7% 21.4% 0.73 0.72 0.69 15 years 18.4% 16.9% 15.6% 18.6% 17.5% 18.0% 0.9

  21. Slide 21: Risks and Mitigants

    † Risks Mitigants Slowdown in domestic and/or global With India emerging as the largest source of cost growth could impact revenue and effective labor supply its manufacturing value profit growth proposition should allow it to be able to grow faster than rest of the world Pace of reforms and impleme

  22. Slide 22: Key reasons to invest in manufacturing

    „ ‰‘” ‰ ‹ ‡ ‰ Growing consumption, investments and exports Changing geopolitical dynamics (China + 1) Emergence of India as a manufacturing powerhouse „ ‰ Government’s push for self-reliance (Atmanirbhar Bharat) by way of reforms and incentives Supportive macroeconomic environment with rising capex

  23. Slide 23: Fund manager: Rakesh Sethia

    Rakesh Sethia is a Fund Manager and Senior Equity Analyst and has collectively over 19 years of experience, of which 17 years in Equity research and 2 years in other corporate roles. In the current role, he covers Energy, Telecom, Logistics and Transportation and Consumer durables. He joined HDFC As

  24. Slide 24: HDFC Manufacturing Fund scheme particulars

    Particulars HDFC Manufacturing Fund Type of Scheme An open ended equity scheme following manufacturing theme Investment Objective To provide long-term capital appreciation by investing predominantly in equity and equity related securities of companies engaged in the manufacturing activity. There is

  25. Slide 25: Asset allocation of the scheme's portfolio

    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 companies 80 100 Very High in engaged in

  26. Slide 26: Product label and Riskometer

    €ˆ† This product is suitable for investors who are seeking*: Riskometer# • To generate long-term capital appreciation • Investment predominantly in equity & equity related securities of companies engaged in the manufacturing theme. *Investors should consult their financial advisers, if in doubt abo

  27. Slide 27: Mutual fund investments are subject to market risks

    The views expressed herein are as of 18th April, 2024 and are 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 must confirm before relying on them. The information contained

  28. Slide 28: Thank you

    THANK YOU |

HDFC Asset Management Company — Investor Presentation (April 2024) on 6ix