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DSP BlackRock India T.I.G.E.R Fund

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DSP BlackRock Mutual Fund's The Infrastructure Growth and Economic Reforms Fund.

This Open Ended Growth Scheme is suitable for investors who are seeking*:
1. Long-term capital growth

2. Investment in equity and equity-related securities of corporates, which could benefit from structural changes brought about by continuing liberalization in economic policies by the Government and/or from continuing investments in infrastructure, both by the public and private sector

3. High Risk**

*Investors should consult their financial advisors if in doubt about whether the product is suitable for them.

**Risk may be represented as:
Low: Investors understand that their principal will be at high risk
Moderately Low: Investors understand that their principal will be at moderately low risk
Moderate: Investors understand that their principal will be at moderate risk
Moderately High: Investors understand that their principal will be at moderately high risk
High: Investors understand that their principal will be at high risk

Published in: Economy & Finance, Business
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DSP BlackRock India T.I.G.E.R Fund

  1. 1. DSP BlackRock India T.I.G.E.R. Fund (The Infrastructure Growth and Economic Reforms Fund) An Open Ended Diversified Equity Scheme April 2017 This Open Ended Diversified Equity Scheme is suitable for investors who are seeking*: • Long-term capital growth • Investment in equity and equity-related securities of corporates, which could benefit from structural changes brought about by continuing liberalization in economic policies by the Government and/or from continuing Investments in infrastructure, both by the public and private sector *Investors should consult their financial advisors if in doubt about whether the product is suitable for them. Strictly for Intended Recipients Only
  2. 2. Are we at an inflection point for capex revival? INTEREST RATES PUBLIC & PRIVATE INVESTMENT REFORMS Capex Cycle 2Strictly for Intended Recipients Only
  3. 3. Investment to pick-up, boosted by lower interest rates Low interest rate and conducive policy environment to pave the path for pick in investment cycle 3 Source: GoI, Spark Capital Cost of borrowings has declined sharply since FY14, which is a key ingredient for the capex cycle recovery 10.95 5.13 5.26 9.00 6.80 4 5 6 7 8 9 10 11 12 13 14 FY95 FY96 FY97 FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 10Year Gsec yield (%) Third Front NDA UPA I & II NDA Three phases of Investment cycle Bullish Phase Bearish Phase Are we entering a bullish phase? 4.2 8.4 9.5 7.1 7.8 8.4 8.6 2.2 20.6 15.9 2.8 6.7 10.6 12.3 2 4 6 8 10 12 14 16 18 20 22 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17EFY18EFY19EFY20EFY21EFY22E GDP growth, % Investment growth, % Over 200bps reduction in cost of borrowings in last two years.  BJP Government has a history of delivering higher GDP growth fuelled by lower cost of borrowings and sharp increase in investment in the previous term between 1998 and 2004. Strictly for Intended Recipients Only
  4. 4. Demand Side GDP = C + G + I + (Exports – Imports) GDP = Pvt. Consumption + govt. consumption + Investment + Net imports Why pick up in investment is essential for India to grow faster Source: Spark Capital 2017 We may see a spurt in investment growth going forward 4 GDP C G I X-M Contribution to GDP (FY17) 100.0% 55.2% 11.5% 31.8% -0.5% Average FY03 – 08 Growth 8.8% 7.5% 5.8% 18.7% 16.2% Average FY09 – 12 Growth 7.3% 8.1% 9.2% 7.5% 8.6% Average FY13 – 17 Growth 6.8% 6.5% 7.9% 2.7% NA Real growth rates • Historically, whenever India’s GDP growth has grown faster, it has been driven by a surge in investment. • Pick up in investment is the most essential part if Government’s aims to increase GDP growth trend as consumption can provide only a basic growth. Strictly for Intended Recipients Only
  5. 5. Capacity Utilization is bottoming and to rise from here Higher capacity utilization to lead to capex revival by private players 5 Cement Capacity utilisation and capacity additions All India steel capacity utilisation 74% 68% 72% 76% 80% 84% -15 5 25 45 65 85 105 125 FY12 FY13 FY14 FY15 FY16 YTD Capacity Production Capacity utilisation Capacity Utilisation across sectors 89% 86% 75% 73% 71% 71% 70% 70% 67% 70% 74% 18.3 0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 50% 55% 60% 65% 70% 75% 80% 85% 90% 95% FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17EFY18EFY19E Capacity Utilisations % Capacity additions (mt) 62% 70% 73% 75% 77% ThermalPLF Cement RBI-Overall Industrials Capital Goods/constructio nEquipments Steel Current Capacity Utilisation Source: Ministry of Steel, Spark Research Strictly for Intended Recipients Only
  6. 6. What do past trends tell us? Source: MOSL; For detailed disclaimer refer slide no. 13 475 544 706 862 930 1,045 2,116 Auto PSU Banks Oil&Gas Cons durables Metal Capital goods 2003-2007 – Cyclicals outperformed Defensives Capital Goods, Metal and Banking sectors could outperform over the next few years 6 (82) (39) (25) 6 9 34 131 202 357 Realty Power Metal Capitalgoods PSU Oil&Gas Banks Consdurables Auto 2008-Apr’17 – Defensives outperforms Cyclicals Strictly for Intended Recipients Only
  7. 7. Modi Government’s reforms so far… 7 ► Key structural reform and expected to be implemented from July 2017 ► Liberalization of FDI limits in railways, defense, insurance, real estate and plantation. ► FDI inflows running at all time high level on 12- month trailing basis (US$ 45 bn) ► Significant move to curtail black money, money laundering, terrorism and financing of terrorists as well as counterfeit notes ► Single law governing insolvency and liquidation proceedings ► Once fully implemented, will help in improving ease of doing business in India, deepen bond markets and also solve NPL issues of the banking sector ► Online environment and forest clearance process ► Key objective to improve India’s ranking in this category from 130 currently to within 50 over the next 2 years GOODS & SERVICES TAX DEMONETIZATION FOREIGN DIRECT INVESTMENT BANKRUPTCY LAW EASE OF DOING BUSINESS Source: Business Standard, 13th April 2017 Source: Economic Times, 9th April 2017 Focus on “Ease of doing business” & “Make in India” campaign to revive investment climate in the country Source: Economic Times, 22nd March 2017 Source: Economic Times, 29th March 2017 Source: Business Insider India, 12th April 2017 Strictly For Intended Recipients Only
  8. 8. Modi Government’s reforms so far... 8Strictly For Intended Recipients Only ► Amended 3 important labour laws ► Removed discretionary Labour Inspections ► Important changes at state level (Rajasthan, Madhya Pradesh and Gujarat) ► Modest increase in Minimum Support Price (MSP) ► Actively use buffer stock ► Lower rural wage inflation ► De-regulated pricing for petrol/diesel ► Lower fuel subsidies and improved fiscal deficit ► Increase in Fuel Taxes aiding public saving BANKING FOOD INFLATION LABOR ENERGY SECTOR ► Financial inclusion plan (JAM trinity) ► Direct transfer of social benefits/subsidies encouraging financial inclusion ► ~276 mn+. bank accounts opened since Sep-14 vs. 625 mn accounts in the last 65 years Source: OECD economic survey on India, 28th February 2017 Source: Macquarie, March 2017 Source: The Hindu, 15th March 2017 Source: Economic Times, 13th April 2017
  9. 9. Next Investment Cycle in India - How does T.I.G.E.R. portfolio play this? 9 Steel Cement Telecom Power Textiles Investment Boom in India (FY03-FY08) Pillars of the last investment cycle (FY03-FY08) Logistics Power – T&D Urban Infra - Metro Road The Next Investment Boom in India? Sectors that could drive the next investment cycle Each investment cycle has its own unique drivers. Thus, a new investment cycle can kick start even if the stars of the last investment boom are in stress. The next investment cycle to led by new set of sectors like Solar, Logistics, Urban Infra, Road etc. Source: Spark Research; For detailed disclaimer refer slide no. 13. Adani Port, Gujarat Pipavav Port, Navkar Corp, Gateway Distriparks Ashoka Buildcon, Dilip Buildcon, Sadbhav Engg, PNC Larsen & Toubro, J Kumar Kalpataru Power Transmission Limited, Techno Electric Oil & Gas HPCL, BPCL, Gas Authority of India, Gujarat State Petronet Ltd Strictly for Intended Recipients Only
  10. 10. 10 Economic Reforms – How does T.I.G.E.R. portfolio play this? Economic Reforms Focus areas Portfolio companies* Manufacturing Reforms (“Make in India”) Manufacturing companies / Export oriented companies Bharat Forge Ease of doing business Asset Builders/Owners Ashoka Buildcon Sadbhav Engineering Nagarjuna construction Power Sector Coal mine auctions Domestic coal production CESC Oil & Gas Sector Petrol & Diesel Deregulation Gas pricing policy BPCL HPCL PSU Banks Change in Board composition – independence of board members Banks recapitalization State Bank of India Bank of Baroda Punjab National Bank Metals Sector Levy of Anti Dumping Duties, Increased Infra spend to boost domestic steel consumption, Increasing exports, national Steel Policy TATA Steel Hindalco Vedanta Swacch Bharat Increased focus on rural development Sintex *The companies mentioned above are the part of the portfolio of the Scheme as on March 31, 2017. Economic Reforms as a theme constitutes a major % of portfolio Strictly for Intended Recipients Only For detailed disclaimer refer slide no. 13.
  11. 11. DSP BlackRock India T.I.G.E.R. Fund (The Infrastructure Growth and Economic Reforms Fund) – Value Proposition
  12. 12. Growth Blend Value Large Mid Small Diversified DSP BlackRock India T.I.G.E.R Fund 12 TOP10HOLDINGS TOP10SECTORS Source: Internal; Data as on March 31, 2017 Fund Manager (s) Rohit Singhania AUM 1,520 crore Nature of the fund Thematic Fund Benchmark S&P BSE 100 Inception date 11 June 2004 Exit Load <12 months: 1%; >=12 months: NIL Why should you consider this fund? •Focus on companies and sectors that are likely to prosper from growth related to economic reforms and infrastructure investment •India is the world's 7th largest economy in absolute GDP terms and one of the fastest growing economies in the world. •Main Drivers for growth are Infrastructure Investment, Corporate Restructuring and Consumption An infrastructure related thematic fund strategy with a buy and hold approach 8.57% 7.75% 5.36%4.95% 3.38% 2.98% 2.83% 2.74% 2.65% 2.53% Larsen & Toubro Limited State Bank of India ICICI Bank Limited HDFC Bank Limited Techno Electric & Engineering Company Limited Ashoka Buildcon Limited UltraTech Cement Limited Yes Bank Limited Kalpataru Power Transmission Limited Bank of Baroda 25.74% 19.31% 6.91% 6.53% 5.68% 4.77% 4.71% 4.60% 4.22% 4.10% Banks Construction Project Construction Cement Industrial Products Non - Ferrous Metals Power Petroleum Products Transportation Industrial Capital Goods
  13. 13. Disclaimers In this material DSP BlackRock Investment Managers Pvt. Ltd. (the AMC) has used information that is publicly available, including information developed in-house. Information gathered and used in this material is believed to be from reliable sources. The AMC however does not warrant the accuracy, reasonableness and / or completeness of any information. The data/statistics are given to explain general market trends in the securities market, it should not be construed as any research report/research recommendation. We have included statements / opinions / recommendations in this document, which contain words, or phrases such as “will”, “expect”, “should”, “believe” and similar expressions or variations of such expressions that are “forward looking statements”. Actual results may differ materially from those suggested by the forward looking statements due to risk or uncertainties associated with our expectations with respect to, but not limited to, exposure to market risks, general economic and political conditions in India and other countries globally, which have an impact on our services and / or investments, the monetary and interest policies of India, inflation, deflation, unanticipated turbulence in interest rates, foreign exchange rates, equity prices or other rates or prices etc. All figures and other data given in this document are as on April 2017 (unless otherwise specified) and the same may or may not be relevant in future and the same should not be considered as solicitation/ recommendation/guarantee of future investments by DSP BlackRock Investment Managers Pvt. Ltd. or its affiliates. Investors are advised to consult their own legal, tax and financial advisors to determine possible tax, legal and other financial implication or consequence of subscribing to the units of the DSP BlackRock Mutual Fund (“Fund”). The S&P BSE 100 , S&P BSE Metals and S&P BSE Oil & Gas are products of Asia Index Private Limited, which is a joint venture of S&P Dow Jones Indices LLC or its affiliates (“SPDJI”) and BSE, and has been licensed for use by DSP BlackRock Investment Managers Pvt. Ltd. Standard & Poor’s® and S&P® are registered trademarks of Standard & Poor’s Financial Services LLC (“S&P”); BSE® is a registered trademark of BSE Limited (“BSE”); and Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”). © Asia Index Private Limited 2014. All rights reserved. Past performance may or may not be sustained in the future and should not be used as a basis for comparison with other investments. The portfolio of the scheme is subject to changes within the provisions of the Scheme Information document of the scheme. Please refer to the SID for investment pattern, strategy and risk factors. The sector(s)/stock(s)/issuer(s) mentioned in this presentation do not constitute any research report/recommendation of the same and the Fund may or may not have any future position in these sector(s)/stock(s)/issuer(s). Mutual Fund investments are subject to market risks, read all scheme related documents carefully. 13Strictly for Intended Recipients Only

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