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  • MonthlyCommuniqu

    Portfolio Management ServicesRegn No. PMS INP 000000670

    MOStPortfolios

    Make the MOSt of our expertise

    Asset Management

    April 2013Dear Investor,

    Indian equities continued to ride on weakness for the second month running with political uncertainty taking centre-stage

    in March. While the Nifty came off marginally by 0.2%, the broader market was much weaker with the CNX Midcap index

    falling nearly 2%. The Budget successfully managed to keep fiscal fears at bay and the RBI gave another 25bps monetary

    boost to the economy. However withdrawal of support by a key government ally made the markets jittery as the

    government was pushed to a thin majority. Political stability was further jeopardized with reports suggesting another ally

    may follow suit raising talks of an early election. Few private sector banking stocks were hard done during the month by a

    sting operation alleging the banks of money laundering. On the global front, the Cyprus crisis and subsequent bailout arrangement renewed Euro-zone

    concerns. FII flows slowed down in March, ending the month at a 4 month low of $2bn. This took the first quarter CY13 FII inflows to end at $10.3bn.

    Domestic Institutions persisted to be net sellers, with $1.5bn of outflows during the month. YTD, their outflows now total $6.3bn.

    Macro Corner

    Growth: Jan IIP came above market consensus (of 1.3%) at 2.4% after 2 months of contraction. While manufacturing and electricity numbers were

    in the green, mining at -2.9% reflected a slowdown due to environmental/forest clearance issues. Meanwhile, the Mar PMI reading at 52 was

    marginally lower than the 54.2 Feb print.

    Inflation: After a brief slowdown in Jan, WPI for Feb rose to 6.8% vs. consensus estimate of 6.6%. The hikes taken in diesel prices drove up the fuel

    inflation index significantly, pushing up the overall inflation index for the month. On a brighter note, RBI's proxy to core inflation manufacturing

    non-food inflation fell to 3.8% - below the 4% comfort zone of RBI. Meanwhile, the Consumer Price Index (CPI) print for Feb was slightly higher at

    10.9% vs. 10.8% in the previous month. The core CPI increased from 8.2% in Jan to 8.4% in Feb.

    Policy: The RBI, in its Mid-Quarter Policy Review held on 19th March, reduced the repo rate by 25pts to 7.5% and left the CRR rate unchanged at

    4%. While this was in line with market expectation, the RBI's warning of limited room for further monetary easing made markets cautious heading

    into the next policy meeting in May.

    Fund Performance

    There was cause for celebration in March, with our flagship large cap Value Strategy completing 10 years of existence while our midcap NTDOP fund

    recently achieving a 5-year track record. During this period, the Value Strategy has delivered a CAGR return of 26.0% v/s the Nifty return of 18.8%. Our

    NTDOP fund clocked a 5-year CAGR of 10.3% v/s the CNX Midcap Index return of -0.7%.

    For the month, the Value Strategy declined 1.4 %, underperforming its benchmark Nifty by 1.2 % led largely by a significant hit on some of its midcap

    positions. Fund performance was also affected by its exposure in the auto and oil and gas segments while select financials and healthcare outperformed.

    The Value Strategy ended the year with a marginally positive return of 0.5% but lagged the benchmark by 6.8 %. Notwithstanding the

    underperformance of some of our more recent inductions in the strategy, we remain convinced about their long-term competitive advantage in their

    respective businesses. If one has a look at the fundamental quality of Value Strategy versus its benchmark Nifty, we will see that Value Strategy is

    fundamentally sound.

    As per Third Quarter results Value strategy companies:

    Sales have grown by an average 13% v/s 11 % of Nifty.

    Profits have grown by an average 11% v/s 5% of Nifty.

    EBIDTA Margins are 29% v/s 18% of Nifty.

    Our flagship midcap fund NTDOP, turned in a stellar performance for the third year in a row, delivering an absolute return of 15 % for FY13 and

    outperforming its benchmark CNX Midcap Index by over 19 %. In its 5th year since inception the fund has delivered a CAGR return of 8.71 % vs

    negative 3% on the benchmark. Superior stock selection and a 'buy and hold' strategy has been the key to its consistent performance.

    Our other principal strategies such as Bulls Eye and the Focus series had a strong showing for the fiscal as a whole, outperforming their respective

    benchmarks by ~5% while Invest India underperformed by ~4 %.

    Outlook

    Market attention in the coming months, will likely shift to the March quarter earnings release to gauge overall economic activity levels and re-assess

    earnings potential for India Inc. in FY14. It will also have to contend with political activity around end-April when Parliament reconvenes for passage of

    the Budget and the Finance Bill. Even as sentiments continue to rule weak, we take note of gradual improvement in key economic parameters such as

    better than expected Jan '13 IIP and the recovery of exports in Feb '13, signs that industrial growth may be bottoming out even though the pace of

    recovery may be slow. Also, range-bound oil prices, gradually reducing fuel subsidies and weak commodity prices could all serve as important

    ingredients to controlling fiscal deficit, reducing inflation and stabilizing the currency in the coming months.

    MOAMC do not take the responsibility for the authenticity of the above data/news/information. It is merely replication of the data /news/information already available in public.

    Regards,Aashish P SomaiyaaChief Executive Officer

  • Value Strategy

    Portfolio Management ServicesRegn No. PMS INP 000000670

    Value based stock selection

    Investment Approach: Buy & Hold

    Investments with Long term perspective

    Maximize post tax return due to Low Churn

    Capital preservation consciousness

    Investment Strategy

    The Strategy aims to deliver superior

    wealth creation by way of long term

    compounding effect, with investments

    in good businesses run by great

    business managers.

    Strategy Objective

    Fund Manager : Manish Sonthalia

    Strategy Type : Open ended

    Date of Inception : 24th March 2003

    Benchmark : S&P CNX Nifty Index

    Investment Horizon: 3 Years +

    Subscription : Daily

    Redemption : Daily

    Valuation Point : Daily

    Details

    Top Sectors

    Banking & Finance

    Auto & Auto Ancillaries

    Infotech

    Pharmaceuticals

    FMCG

    Oil and Gas

    Engineering & Electricals

    Cash

    30.92

    21.64

    12.32

    11.31

    10.04

    8.24

    5.36

    0.17

    Sector Allocation % Allocation*

    Top Holdings

    HDFC Bank Ltd.

    Bosch Ltd.

    Nestle India Ltd.

    State Bank Of India

    Housing Development Finance Corporation Ltd.

    Infosys Technologies Ltd.

    GlaxoSmithkline Pharmaceuticals Ltd.

    Eicher Motors Ltd.

    Larsen & Toubro Ltd.

    Top Holdings % Allocation*

    12.85

    11.61

    10.04

    9.05

    9.02

    8.82

    6.81

    5.58

    5.36

    Key Portfolio Analysis

    Standard Deviation (%)

    Beta

    31.48

    1.00

    Performance Data NiftyValue Strategy

    28.16

    0.81

    *Above 5% & Cash

    The Above strategy returns are of a Model Client. Returns of individual clients may differ depending on factors such as time of entry/exit/ additional inflows in the strategy. The Above returns are calculated on NAV basis and are based on the closing market prices as on 31st March 2013. Past performance may or may not be sustained in future. Returns above 1 year are annualized. Please refer to the disclosure document for further information.

    *Above 5%

    Value Strategy Nifty

    Period

    All Figures in %

    % o

    f re

    turn

    s

    MOStPortfolios

    Make the MOSt of our expertise

    Asset Management

    0.521.83

    5.14

    19.82

    8.20

    25.92

    7.31

    -1.30

    2.68

    17.10

    3.72

    18.78

    -5

    0

    5

    10

    15

    20

    25

    30

    1 Year 2 Year 3 Year 4 Year 5 Year Since Inception

  • Next Trillion Dollar Opportunity Strategy

    Portfolio Management ServicesRegn No. PMS INP 000000670

    MOStPortfolios

    Make the MOSt of our expertise

    Asset Management

    The Strategy aims to deliver superior

    returns by investing in focused themes

    which are part of the next Trillion Dollar

    GDP growth opportunity.

    Stocks with High Growth Story

    Stocks with Reasonable Valuation

    Concentration on Emerging Themes

    Buy & Hold Strategy

    Fund Manager : Manish Sonthalia

    Strategy Type : Open ended

    Date of Inception : 11th Dec. 2007

    Benchmark : CNX MIDCAP Index

    Investment Horizon: 3 Years +

    Subscription : Daily

    Redemption : Daily

    Valuation Point : Daily

    Strategy Objective

    Investment Strategy

    Details

    FMCG

    Banking & Finance

    Auto & Auto Ancillaries

    Engineering & Electricals

    Diversified

    Plantation Tea & Coffee

    Chemicals

    Cash

    25.66

    22.86

    16.30

    8.32

    7.58

    6.15

    5.71

    0.01

    Sector Allocation

    Page Industries Ltd.GlaxoSmithkline Consumer Healthcare Ltd.Bosch Ltd.Eicher Motors Ltd.J&k BankCummins India Ltd.Mcleod Russel India L