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

This document discusses the DSP India T.I.G.E.R. Fund, which aims to capture growth from India's investment cycle revival and economic reforms. It focuses on sectors related to infrastructure growth and economic reforms like construction, cement, manufacturing, and autos. The document outlines reasons for recommending the fund, such as signs the investment cycle has bottomed out and capacity utilization rising. It also discusses the government's push for capex spending and various reforms that have been implemented in India to support the investment theme. Key data points are presented to track the building capex cycle in India.

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[Title to come] [Sub-Title to come] Strictly for IntendedRecipients Only Date * DSP India Fund is the Company incorporated in Mauritius,under which ILSF is the corresponding share class March 2022 | People | Processes | Performance | DSP India T.I.G.E.R. Fund (The Infrastructure Growth and Economic Reforms Fund) #INVESTFORGOOD
2 What is DSP India T.I.G.E.R. fund ? Fund that aims to capture growth revival in capital cycle & economic reforms Source: Internal. * include only specific industry sectors in consumer durables and consumer non durables which are relevant to the theme InfrastructureGrowth Theme Construction Cement & Cement products Industrial Manufacturing/Engineering Metals Oil & Gas Power Telecom Healthcare services Auto mobiles EconomicReforms theme Chemicals Fertilizer & Pesticides ConsumerGoods * FinancialPlatforms E-Retailing Excludingsectors Information Technology Media & Entertainment Financials Pharma Consumerstaples Paper Textiles Thematic fund focussed on
[Title to come] [Sub-Title to come] Strictly for IntendedRecipients Only Date * DSP India Fund is the Company incorporated in Mauritius,under which ILSF is the corresponding share class Why are we recommending DSP India T.I.G.E.R. Fund?
Investment Cycle has bottomed out, time to ride the investmenttheme Investment contribution to GDP fell to a low of 26.7% in FY21 from 36% in FY07. 4 Has investment cycle bottomed out, yes we think so Source: Internal, Spark Capital GDP C G I Net imports Contribution to GDP (FY00) 100.0% 64.0% 12.2% 28.8% -1.9% Contribution to GDP (FY07) 100.0% 56.1% 9.8% 36.0% -3.2% Contribution to GDP (FY21) 100.0% 59.4% 14.0% 26.7% 0.1% FY04 – FY08 CAGR 14.5% 11.7% 11.4% 23.7% 66.3% FY09 – FY18 CAGR 12.0% 12.2% 14.2% 11.9% 10.1% FY19 – FY21 CAGR 4.7% 5.2% 14.0% -2.7% -34.1% Contribution of Investment to GDP and Real growth rates Historically,wheneverIndia’s GDPgrowth has grown faster, ithas beendrivenby 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 onlya basic growth and can not sustain momentumwithoutgrowth in the economy. Demand Side GDP = C + G + I + (Exports – Imports) GDP = Private Consumption+ Governmentconsumption+ Investment+ Netimports Investment contribution to GDP jumped from a low of 28.8% in FY00 to 36% in FY07.
5 A new capex cycle – Building blocks are in place Source: Internal, Spark Capital. Data as on March 2022 Bank balance sheets have now improved materially Cost of funds have fallen to over two decades low, which is a big positive for the capex cycle to turn around 22 15 10 15 20 25 30 35 Philippines Sri Lanka Bangladesh China Indonesia Korea Malaysia Japan India Cambodia Taiwan Thailand Vietnam Singapore India* BaseCorporatetaxrateofmajorasian economies Indian Govt. has cut corporate tax rate, making India one of the lowest tax rate country among the peers *Note: GoI has introduced lower tax rate for new manufacturing companies 2.3 1.0 2.0 3.0 4.0 5.0 6.0 7.0 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 Sep'21 (%) Banks' Net non-performing asset 2000s: Improving bank balance sheet led to strong risk 7.95 6.35 4.00 3.00 4.00 5.00 6.00 7.00 8.00 9.00 10.00 2007 2008 2008 2009 2009 2010 2010 2011 2011 2012 2012 2013 2013 2014 2014 2015 2015 2016 2016 2017 2017 2018 2018 2019 2019 2020 2020 2021 2021 G sec Yield (%) Repo rate 899 1,047 1,283 1,537 1,666 1,861 2,242 2,623 3,022 3,177 2,978 4,481 2,026 2,148 2,376 2,604 2,776 3,057 3,203 3,751 4,275 3,695 3,125 5,203 200 1,200 2,200 3,200 4,200 5,200 6,200 Apr-Dec'10 Apr-Dec'11 Apr-Dec'12 Apr-Dec'13 Apr-Dec'14 Apr-Dec'15 Apr-Dec'16 Apr-Dec'17 Apr-Dec'18 Apr-Dec'19 Apr-Dec'20 Apr-Dec'21 Personal income tax (Rs. bn) Corporate tax receipt (Rs. bn) Higher tax buoyancy is leading to govt. revenues running ahead of the budget target
6 Government push and pick up in Capacity Utilization to kick start the capex cycle Source: GoI, Internal. Spark Capital Capex budgeted to grow at a faster pace of 24.4% in FY23BE to Rs. 7.5tn or 2.9% of GDP – the highest level in over a decade Capacity Utilization has been on the rise post the opening of the lockdown For the firsttime in almost two decades, we see right intentbythe Govt. to set rightpriorities on • Infrastructure spend • Stable taxation • Focus on asset monetisation & Privatisationof state-ownedcompanies • Higher transferto state governments & • Governmentstrategyto not run businesses exceptafew strategically importantones. Data as on 30 Sep 2021 47 68 30 40 50 60 70 80 90 Mar-09 Sep-09 Mar-10 Sep-10 Mar-11 Sep-11 Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 Sep-15 Mar-16 Sep-16 Mar-17 Sep-17 Mar-18 Sep-18 Mar-19 Sep-19 Mar-20 Sep-20 Mar-21 Sep-21 Capacity Utilization (%) 3.91 1.64 1.67 2.91 1.00 1.50 2.00 2.50 3.00 3.50 4.00 4.50 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22RE FY23BE Capital expenditure (% of GDP)
7 India has already walked the talk in terms large set of reforms Source: Bloomberg, CMIE, Edelweiss research Reform Name Targeted beneficiaries Implementation year Goods and Servicestax Overall economy 2017 Corporate tax cut Corporate sector 2019 Ujjwal Discom Assurance Yojana (UDAY) Powersector 2016 Real estate and regulatory authorities (RERA) Real estate 2017 Productionlinkedincentives (PLI) Manufacturing 2020 Labour reforms Corporate sector 2020 Make in India taking shape across sectors Products in focus Components Factors influencing'Make in India' Air Conditioners Compressor,condensers,PCBs Import disincentives Pharmaceuticals API Intermediates Productionlinkedincentives Textiles Garments/apparel Tax incentivesandfocus on scale Mobile Phones Assemblyof mobile phones Productionlinkedincentives Defense Equipment Various products Import has beenbanned Auto Small cars, 2W, enginesand transmissioncomponents Higher import duties,lowertaxes IT SaaS Digitization,cybersecurity,ban on some foreignapps Major reforms since 2015
8 Real estate sector could revive – multiple sectors likely to benefit Source: Spark Capital, Prop Equity • Real Estate sales likelytogrow led bylow interestrates, reductioninstamp duty, GST concession,etc. • Governmenthas also made keyannouncementsto revive the sector whichinclude o Rs 180 bn additional fundingforPMAY for Urban area, o Income tax relief fordevelopersandhomebuyersforhousesthat cost up to Rs 2 crore, o Approval of the Union Cabinetto set up a Rs 250 bn alternative investmentfund(AIF) torevive around1,600 stalledhousing projects intop cities o Creationof Affordable HousingFund in the National HousingBank withan initial corpusof Rs 100 bn. • Revival in the real estate cycle could surprise the volume growth in each of the categories mentioned. Also Covid has accelerated the shiftfrom unorganized toorganizedplayersthere bybenefittinglargerplayers R E A L E S T A T E Building Materials (Cement, Plywood, Pipes,Tiles) – 18.0% weight Consumer Durables (AC’s, Ref, WM) – 1% weight Cables and Wires – 4.0% weight Paints – 1.5% weight Consumer Electricals (Fans, Water Heaters, Water Purifiers ) – 3.4% weight Sectors benefitting from revival in Real Estate, weights in DSP T.I.G.E.R. Fund Source: Portfolio as on 31 Jan 2022 1,244 2,357 2,687 2,781 2,600 3,120 3,900 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 FY08 FY12 FY16 FY20 FY21 FY22E FY23E Real Esate Sales Value (Rs bn)
9 Multiple new themes emerging for private capex Source: Internal Themes Particular Cement • Capacity utilisationforthe cement industrywas 63% duringFY21. Cementindustryhas already announced capacity expansionplanof around 40-50mt over nexttwo years Metals • Sharp run up incommodity prices have alloweddomesticcompaniesto generate robustcash flows in FY21 and as prices are expectedto remainelevated,FY22-23E could also witnesswindfall cash generationresultinginultimate capex potential of Rs 2,400 bn over next2-3 yrs. Digitization • Digital technologieshave become increasinglypervasive.Fromautomotive factoriestobanks, digital systemsenable companiesto improve efficiency.The global demandfor digital transformation services is expectedtorise at a Compound Annual Growth Rate (CAGR) of around 16.5% over2021 to 2025. Data Centres • An investmentof INR345 bn on data centers overthe nextfive yearswhich also includeslandcosts as perJLL Research estimates. Performance Linked Incentives (PLI) related capex • In this year's Budget,about Rs 2,410 bn was earmarkedfor the PLI scheme for the nextfive years which isexpectedto increase the productionacross electronics,chemicals,pharma and consumer durablesoverthe nextfive years. • Large proportion of capex to be done byMNC’s innew areas like Electronics,Chemicalswhere specializedsolutionswill be required. Renewable energy • Indiais aiming to attain500 GW of renewable energyby2030. Electric Vehicles • The EV market is expectedtogrow at CAGR of 44% between2020-2027 which wouldleadto increasedspendingon charging infra,relatedpowertransmissionrequirementsandotherinfra. Source: Phillip Capital, Market reports, Veritis, JLL, India Energy Storage Alliance
10 Focus on capex drivers that can be in forefront in the next capex cycle Capex drivers are changing - High capital intensity sectors are witnessing lower capex while less capital intensive sectors such as Data Centersare becoming future Source: Internal. Old Capex Drivers Mining Cement Steel Roads & Railways Power Transmission Large greenfieldcapex Coal Based Power Plants New Capex Drivers Water Data Centre, Logistics, Automotive and Electric Vehicles Food & Beverage, Chemicals Roads Expressways Railway, Metro & High Speed Rail Power Distribution Brownfield capex + Industrial automation + Digitalization Renewable Energy
[Title to come] [Sub-Title to come] Strictly for IntendedRecipients Only Date * DSP India Fund is the Company incorporated in Mauritius,under which ILSF is the corresponding share class Tracking key data points as investment cycle builds-up
12 Capex cycle buildup key indicators 1,880 1,809 2,366 2,118 2,555 3,090 3,916 100 600 1,100 1,600 2,100 2,600 3,100 3,600 4,100 4,600 Apr -Dec'15 Apr -Dec'16 Apr -Dec'17 Apr -Dec'18 Apr -Dec'19 Apr -Dec'20 Apr -Dec'21 Capex (Rs. bn) On a cumulative basis, Govt. Capex grew by 26.8% yoy to Rs. 3.9tn in 9MFY22 from Rs. 3.1tn in 9MFY21 Rs. bn 12-2019 12-2020 12-2021 Growth (9M FY22 over 9M FY20) Total Capex 2555 3090 3916 53% Road 641 643 867 35% Railways 414 412 804 94% Water 120 1 262 118% Housing 96 833 138 45% Defence 884 58 912 3% Road, Railways and water sector are leading the capex Exports of Engineering Goods grew by 39.8% in 10M FY22 over 10M FY20, 17.2% -2.6% 6.6% 14.6% -17.5% 11.1% 17.1% 6.2% -6.2% -2.8% -3.0% -7.5% 39.8% -30.0% -20.0% -10.0% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 10M FY20 10M FY21 10M FY22 Engineering goods exports (%, yoy) Source: GoI, CMIE, Spark Research 6.0 10.1 11.7 10.4 7.6 12.6 6.9 4.1 2.7 6.5 6.1 5.3 5.3 6.9 6.1 3.1 6.5 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 9M CY05 9M CY06 9M CY07 9M CY08 9M CY09 9M CY10 9M CY11 9M CY12 9M CY13 9M CY14 9M CY15 9M CY16 9M CY17 9M CY18 9M CY19 9M CY20 9M CY21 PrivateSectorNewInvestment (Rs. tn) Project announcements by private sector are picking up, announcements over Rs. 6.5tn worth of Capex in FY22 (YTD)
13 More PLI schemes announced and in pipeline to drive manufacturing capex Source: GoI •March 2020: It started with 3 sectors namely (i) Mobile Manufacturing and Specified Electronic Components, (ii) Critical Key Starting materials/Drug Intermediaries & Active Pharmaceutical Ingredients, (iii) Manufacturingof Medical Devices •Nov 2020: 10 new key sectors which have been approvedby the UnionCabinet in November 2020. •Dec 2021: Performance Linked Incentive (PLI) scheme for semiconductors and display manufacturing ecosystem with an outlay of Rs760bn. Investments target is Rs 1,700 bn over the next six years. •Two new PLI schemes to be added: PLI Scheme for an additional sector, Drones and Drone Components, has also been approved by the Union Cabinet in September 2021. It is expected that another key sector HydrogenElectrolyzer PLI couldbe announced •Solar manufacturing PLI: MNRE has asked for a total outlay of Rs230bn for solar manufacturing PLI which has been approvedfromearlier outlay of Rs 45 bn Category Overall PLI Incentive committed (Rs. Bn) Committed/Likely Investment/Capex (Rs. Bn) Mobiles 410 110 Pharma 150 100 Pharma – API/KSM 63 54 Pharma - Medical Devices 28 9 WhiteGoods & LED 62 79 Solar PV 45 175 Telecom 122 30 Food 109 61 Automobile& Auto Components 260 425 IT Hardware 50 24 Speciality Steel 63 400 Textile 107 190 EV Battery 181 450 Semiconductor 760 2300 Total 2,410 4,407
[Title to come] [Sub-Title to come] Strictly for IntendedRecipients Only Date * DSP India Fund is the Company incorporated in Mauritius,under which ILSF is the corresponding share class Investment team & Investment Framework
15 Investment team Rohit Singhania–managing thefund sinceJune2010 • Rohit is the Fund Manager for DSPTax Saver Fund. He is also the co-Fund ManagerforDSP India T.I.G.E.R.fund* (The InfrastructureGrowthand Economic Reforms), DSP Equity Opportunities Fund* and DSP NaturalResources and New EnergyFund *. • Rohit joined DSPInvestment Managersin September 2005, as Portfolio Analyst for the firm's Portfolio Management Services (PMS) division and then transferred tothe Institutional Equities Teamin June 2009. He focused on sectors like Auto, Auto Ancillaries, Metals, Infrastructure, SugarandHotels. FUND MANAGER* * Jay Kothari -Dedicated Fund Manager for overseas investments. Years in brackets ( ) is years of experience. Experienced investment team with a wide coverage of Indian equity markets TEAM SUPPORTING THE FUND MANAGER Chinmay Sapre (9) AVP, Aviation, Realty Abhishek Ghosh (12) AVP, Small & Mid Caps, Transportation Kaushal Maroo (11) AVP, Autos, Ancillaries, Cement Dhaval Gada (10) AVP, Banking and FinancialServices Abhishek Rathi (13) AVP, Financials & Industrials for Long / Short Aayush Ganeriwala Manager, Oil& Gas, Metals Suryanarayanan Manian, CFA (10) VP, Tech, Telecom, Media, FMCG Nilesh Aiya(12) AVP, ForensicResearch Resham Jain, CFA (14) VP, Small & Mid Caps,Agri inputs, Textiles, Chemicals, Retail Charanjit Singh – managing the fund sinceJan 2021 • Joined DSPIM in Sep 2018 to cover Industrials, Utilities, Infrastructure and Consumer Durables sectors • Prior to joining DSPIM, he was working with B&Ksecurities • He has been rated as No. 2 analyst in 2017 Asia Money Polls in Industrials sector & been consistently voted in top quartile by leading investment managersin previous roles Chirag Dagli VP, Healthcare Abhishek Singh (14) AVP, Portfolio Manager Bhavin Gandhi (15) AVP, Portfolio Manager
16 Investment Framework for stock selection & portfolio construction Source: Internal. Stock Selection Identificationof themes/business • Visibilityfornext3-5 years • Lower cyclicalityand abilityto grow eveninlow industrial growth • Simple businesses fromsectorswith secular growth potential • Focus on executionand not on narratives • Leadershipinthe industryor among the top 3 players • Innovationledby access to technology FinancialMetrics • Stable margin, focuson cash flowsand low leverage • SuperiorROCE/ROE over cycles Management • Credible,capable & passionate withpast track record • Prudentcapital allocationdecision Valuations • Reasonable valuationsinconjunctionwith fundamentals Portfolio Construction o Fund seeksto reduce concentration risk by owninghighernumber of good qualitystocks & follow approach to own basket of stocks inindustrial products,buildingmaterialsand construction o Fund preferstockswith lowervolatilityand drawdowns
[Title to come] [Sub-Title to come] Strictly for IntendedRecipients Only Date * DSP India Fund is the Company incorporated in Mauritius,under which ILSF is the corresponding share class Portfolio Positioning
18 Portfolio Snapshot as on Jan 31,2022 Source: DSP Internal; The sector(s)/stock(s)/issuer(s) mentioned in this note do not constitute any recommendation of the same and the Fund may or may not have any future position in these sector(s)/stock(s)/issuer. Name of stock Sector Weight (%) Larsen & Toubro Ltd. Construction 5.1 RelianceIndustries Ltd. Oil & Gas 4.9 UltratechCement Ltd. Cement and Building Materials 4.5 Siemens Ltd. Automation 3.2 ACC Ltd. Cement and Building Materials 3.1 NTPC Ltd. Power 3.0 BhartiAirtelLtd. Telecom 2.5 Power Grid Corporation of India Ltd. Power 2.4 KNR Constructions Ltd. Construction 2.1 ABB India Ltd. Industrial CapitalGoods 2.1 Top 10 holdings Top Sectors MarketCapitalisation(%) Asset Allocation Large Cap, 32 Mid Cap, 31 Small Cap, 36 Equity, 99.2 Cash, 0.8 7% 9% 8% 9% 9% 16% 18% 0% 5% 10% 15% 20% Automation Consumables/FMIG Consumer Electircals/Durables Utilites Manufacturing Construction Cement & Building Materials
19 Portfolio parameters – Growth, Return ratios & Valuations for DSP T.I.G.E.R Fund Source: Internal; Portfolio as on 31 Jan 2022. Above future estimations can vary with actual results and should not be consider as performance/ return of scheme/ Fund. DSP research estimatesforthe portfoliocompaniesindicate weightedaverage growthof 15.7% in topline and17.6% growth in PAT in FY23E Weightedaverage ROE’s are expectedto expandmarginallyfrom15.1% in FY22E to 16.6% in FY23E Valuationsforthe DSP IndiaT.I.G.E.R. Fundbased on harmonic mean are at 18.4x P/E on FY23E and 2.6x P/B on FY23E Note: Growth & ROE are weighted average; Valuations are harmonic mean 24.3% 24.8% 9.6% 15.1% 15.7% 23.5% 17.6% 16.6% 13.1% 15.4% 18.3% 17.3% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% Sales Growth EBITDA Growth PAT Growth ROE Growth& ROE FY22E FY23E FY24E 22.2 18.4 15.9 3.0 2.6 2.3 11.9 10.1 8.8 - 5.0 10.0 15.0 20.0 25.0 FY22E FY23E FY24E Valuation PE PB EV/EBITDA
20 DSP India T.I.G.E.R. fund - Opportunity to gain exposure to core sectors Source: NSE Index weight of Coresectors in Nifty 50 Index Core sectors may be at the cusp of turnaround ; However,representationinthe Nifty50 index has reducedby 41% from peakin Dec 07. Exposure is mere 14.5% byexcluding RIL DSP India T.I.G.E.R.Fund providesan opportunityfor investortotake overweightexposure onthe core sectors which can bene fit from revival of capital cycle & economic reforms Investormay considerallocating~ 10-15% of equityexposure to the fund for long-terminvestmentofatleast10 years Includes Reliance Industries (RIL) weight – 10.8% Core Sectors Dec-07 Feb-22 Capital Goods 10.5 2.9 Cement 2.1 2.3 Metals 9.0 3.1 Oil & Gas (Ex RIL) 13.5 1.6 RIL 11.9 10.8 Oil & Gas 25.4 12.5 Telecom 11.4 2.2 Utilities 8.2 2.2 Total 66.7 25.3
21 Key Risk - What will make us change our view? Source: Internal Risk Particular Aggressive Government spending plans • Governmenthas set out an aggressive spendingplanfor infrastructure whichcould get delayeddue to eitherfiscal considerationsor change inpriorities.Thiscould impact the earningsof companies across sub-sectors. Delay in adoption of new themes • Delayin adoptionof new themesof automationand digitalizationcouldleadto companiesto shiftto more commoditizedproductcategoriesto drive growth Lack of proper implementation of schemes • Success of keyinitiative Make inIndia is critical for the sector. There is an expectationof increasedcapacity additionsin varioussectors. • Lack of proper implementationof PLI schemesor abilityto attract large foreignplayers could derail these initiatives Changes in technology • Changes intechnologycould de-rate some of the sectors significantlysuchas shiftfrom coal based energyto renewables,changingenergyefficiencynormsacross sectors such as motors, pumps etc. • Inabilityof the companiesto scale up to new requirementscouldimpact theirfuture growth Adverse regulatory changes • Adverse regulatorychangescould lead to de-ratinginsectors such as Gas utilities,power transmissionsector ESG • ESG is becomingan increasinglyimportantfactorfor the companieswhich we track on consistentbasis
[Title to come] [Sub-Title to come] Strictly for IntendedRecipients Only Date * DSP India Fund is the Company incorporated in Mauritius,under which ILSF is the corresponding share class Performance
23 Performance Scorecard 40% 54% 52% 83% -58% 76% 14% -33% 37% -9% 61% 1% 4% 47% -17% 7% 3% 52% 1% 39% 38% 42% 62% -55% 87% 17% -25% 32% 8% 34% -2% 5% 33% 3% 11% 17% 27% 0% 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 YTD 2022 DSP India T.I.G.E.R Fund S&P BSE 100 TRI Infrastructure boom phase – Fund outperforming broader equity market Followed by phase of underperformance Calendar Yearreturns Sector underperformed broader equity market for last 3 years; signs of sector revival evident from 2021 & YTD 2022 fund performance S&P BSE 100 TRI is benchmark of DSP India T.I.G.E.R. fund. Regular plan – Growth option considered. Click here for performance of scheme in SEBI prescribed format and of other schemes managed by same Fund Managers. Past performance may or may not sustain in future and should not be used as a basis for comparison with other investments. Source: MFIE, Data as on 31 Jan 2022
[Title to come] [Sub-Title to come] Strictly for IntendedRecipients Only Date * DSP India Fund is the Company incorporated in Mauritius,under which ILSF is the corresponding share class Appendix
25 Central Govt. Capex – Growth in Railways, Defense; Roads flat Segment (Rs bn) FY21 FY22RE FY23BE FY23/FY22RE Differential FY22RE/FY21 FY23BE/FY22RE Railways 2345.8 2148.0 2456.0 308 -8.43% 14.34% Defense 1399.2 1457.8 1604.2 146 4.18% 10.04% Roads 1546.0 1862.5 1877.4 15 20.48% 0.80% Drinking Water and Sanitation 110.0 450.1 600.0 150 309.19% 33.30% Housing and Urban development 405.0 686.2 719.8 34 69.44% 4.89% RenewableEnergy 95.1 215.8 285.8 70 127.07% 32.42% Power 476.4 490.1 514.7 25 2.88% 5.03% Water resources and rejuvenation 114.0 180.3 189.9 10 58.06% 5.33% Rural 329.6 343.9 390.0 46 4.35% 13.41% Other CPSU's 425.2 618.2 1130.1 512 45.39% 82.81% TotalCapex 7246.2 8452.9 9767.9 16.65% 15.56% Special Assistance as Loan to States for Capital Expenditure 118.3 150.0 1000.0 850 26.79% 566.67% Source: GoI • Significant increase oninfrastructure spending. Budgetary allocations to capex are projectedto go upby a whopping 35% YoY. However,accountingfor the decline incapex spend throughextra-budgetary resources (PSUs/NHAI/Railways ownresources),the overall capex is expectedto grow17% inFY23 against 15% in FY22. • Higher allocationPLI schemes,data centres gettinginfra status,extensionof concessional tax rates fornew mfg. units • Expands available market for local manufacturers materially inthe defense sector as 68% of capital outlay for domestic industry in FY23 from51% inFY22by more. • Railways - Majority spends are towards new lines construction,gauge conversion,doublingof lines and roadsafety.
26 Disclaimer & Product labelling details Fund Product Suitability Riskometer DSP IndiaT.I.G.E.R. Fund Benchmark –S&PBSE 100 TRI DSP India T.I.G.E.R. Fund (The Infrastructure Growth and Economic Reforms) An open ended equity scheme following economic reforms and/or Infrastructure development theme This 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 Scheme is suitable for them. In this material DSP Investment Managers Private Liimited. (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 orvariations 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. 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). 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 which is available at www.dspim.com. Past performance may or may not sustain in future and should not be used as a basis for comparison with other investments. ForIndex disclaimer click here. The strategy/ Investment Framework/ Investment approach mentioned has been currently followed by the Scheme and the same may change in future depending on market conditions and other factors. There is no assurance of any returns/potential/capital protection/capital guarantee to the investors in this Scheme.. All figures and other data given in this document for the fund and the model are as on Sep 30, 2021 (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 the AMC 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 DSP Mutual Fund. MutualFund investmentsare subjectto marketrisks,read allschemerelateddocumentscarefully.
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DSP India T.I.G.E.R. Fund

  • 1.
    [Title to come] [Sub-Titleto come] Strictly for IntendedRecipients Only Date * DSP India Fund is the Company incorporated in Mauritius,under which ILSF is the corresponding share class March 2022 | People | Processes | Performance | DSP India T.I.G.E.R. Fund (The Infrastructure Growth and Economic Reforms Fund) #INVESTFORGOOD
  • 2.
    2 What is DSPIndia T.I.G.E.R. fund ? Fund that aims to capture growth revival in capital cycle & economic reforms Source: Internal. * include only specific industry sectors in consumer durables and consumer non durables which are relevant to the theme InfrastructureGrowth Theme Construction Cement & Cement products Industrial Manufacturing/Engineering Metals Oil & Gas Power Telecom Healthcare services Auto mobiles EconomicReforms theme Chemicals Fertilizer & Pesticides ConsumerGoods * FinancialPlatforms E-Retailing Excludingsectors Information Technology Media & Entertainment Financials Pharma Consumerstaples Paper Textiles Thematic fund focussed on
  • 3.
    [Title to come] [Sub-Titleto come] Strictly for IntendedRecipients Only Date * DSP India Fund is the Company incorporated in Mauritius,under which ILSF is the corresponding share class Why are we recommending DSP India T.I.G.E.R. Fund?
  • 4.
    Investment Cycle has bottomedout, time to ride the investmenttheme Investment contribution to GDP fell to a low of 26.7% in FY21 from 36% in FY07. 4 Has investment cycle bottomed out, yes we think so Source: Internal, Spark Capital GDP C G I Net imports Contribution to GDP (FY00) 100.0% 64.0% 12.2% 28.8% -1.9% Contribution to GDP (FY07) 100.0% 56.1% 9.8% 36.0% -3.2% Contribution to GDP (FY21) 100.0% 59.4% 14.0% 26.7% 0.1% FY04 – FY08 CAGR 14.5% 11.7% 11.4% 23.7% 66.3% FY09 – FY18 CAGR 12.0% 12.2% 14.2% 11.9% 10.1% FY19 – FY21 CAGR 4.7% 5.2% 14.0% -2.7% -34.1% Contribution of Investment to GDP and Real growth rates Historically,wheneverIndia’s GDPgrowth has grown faster, ithas beendrivenby 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 onlya basic growth and can not sustain momentumwithoutgrowth in the economy. Demand Side GDP = C + G + I + (Exports – Imports) GDP = Private Consumption+ Governmentconsumption+ Investment+ Netimports Investment contribution to GDP jumped from a low of 28.8% in FY00 to 36% in FY07.
  • 5.
    5 A new capexcycle – Building blocks are in place Source: Internal, Spark Capital. Data as on March 2022 Bank balance sheets have now improved materially Cost of funds have fallen to over two decades low, which is a big positive for the capex cycle to turn around 22 15 10 15 20 25 30 35 Philippines Sri Lanka Bangladesh China Indonesia Korea Malaysia Japan India Cambodia Taiwan Thailand Vietnam Singapore India* BaseCorporatetaxrateofmajorasian economies Indian Govt. has cut corporate tax rate, making India one of the lowest tax rate country among the peers *Note: GoI has introduced lower tax rate for new manufacturing companies 2.3 1.0 2.0 3.0 4.0 5.0 6.0 7.0 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 Sep'21 (%) Banks' Net non-performing asset 2000s: Improving bank balance sheet led to strong risk 7.95 6.35 4.00 3.00 4.00 5.00 6.00 7.00 8.00 9.00 10.00 2007 2008 2008 2009 2009 2010 2010 2011 2011 2012 2012 2013 2013 2014 2014 2015 2015 2016 2016 2017 2017 2018 2018 2019 2019 2020 2020 2021 2021 G sec Yield (%) Repo rate 899 1,047 1,283 1,537 1,666 1,861 2,242 2,623 3,022 3,177 2,978 4,481 2,026 2,148 2,376 2,604 2,776 3,057 3,203 3,751 4,275 3,695 3,125 5,203 200 1,200 2,200 3,200 4,200 5,200 6,200 Apr-Dec'10 Apr-Dec'11 Apr-Dec'12 Apr-Dec'13 Apr-Dec'14 Apr-Dec'15 Apr-Dec'16 Apr-Dec'17 Apr-Dec'18 Apr-Dec'19 Apr-Dec'20 Apr-Dec'21 Personal income tax (Rs. bn) Corporate tax receipt (Rs. bn) Higher tax buoyancy is leading to govt. revenues running ahead of the budget target
  • 6.
    6 Government push andpick up in Capacity Utilization to kick start the capex cycle Source: GoI, Internal. Spark Capital Capex budgeted to grow at a faster pace of 24.4% in FY23BE to Rs. 7.5tn or 2.9% of GDP – the highest level in over a decade Capacity Utilization has been on the rise post the opening of the lockdown For the firsttime in almost two decades, we see right intentbythe Govt. to set rightpriorities on • Infrastructure spend • Stable taxation • Focus on asset monetisation & Privatisationof state-ownedcompanies • Higher transferto state governments & • Governmentstrategyto not run businesses exceptafew strategically importantones. Data as on 30 Sep 2021 47 68 30 40 50 60 70 80 90 Mar-09 Sep-09 Mar-10 Sep-10 Mar-11 Sep-11 Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 Sep-15 Mar-16 Sep-16 Mar-17 Sep-17 Mar-18 Sep-18 Mar-19 Sep-19 Mar-20 Sep-20 Mar-21 Sep-21 Capacity Utilization (%) 3.91 1.64 1.67 2.91 1.00 1.50 2.00 2.50 3.00 3.50 4.00 4.50 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22RE FY23BE Capital expenditure (% of GDP)
  • 7.
    7 India has alreadywalked the talk in terms large set of reforms Source: Bloomberg, CMIE, Edelweiss research Reform Name Targeted beneficiaries Implementation year Goods and Servicestax Overall economy 2017 Corporate tax cut Corporate sector 2019 Ujjwal Discom Assurance Yojana (UDAY) Powersector 2016 Real estate and regulatory authorities (RERA) Real estate 2017 Productionlinkedincentives (PLI) Manufacturing 2020 Labour reforms Corporate sector 2020 Make in India taking shape across sectors Products in focus Components Factors influencing'Make in India' Air Conditioners Compressor,condensers,PCBs Import disincentives Pharmaceuticals API Intermediates Productionlinkedincentives Textiles Garments/apparel Tax incentivesandfocus on scale Mobile Phones Assemblyof mobile phones Productionlinkedincentives Defense Equipment Various products Import has beenbanned Auto Small cars, 2W, enginesand transmissioncomponents Higher import duties,lowertaxes IT SaaS Digitization,cybersecurity,ban on some foreignapps Major reforms since 2015
  • 8.
    8 Real estate sectorcould revive – multiple sectors likely to benefit Source: Spark Capital, Prop Equity • Real Estate sales likelytogrow led bylow interestrates, reductioninstamp duty, GST concession,etc. • Governmenthas also made keyannouncementsto revive the sector whichinclude o Rs 180 bn additional fundingforPMAY for Urban area, o Income tax relief fordevelopersandhomebuyersforhousesthat cost up to Rs 2 crore, o Approval of the Union Cabinetto set up a Rs 250 bn alternative investmentfund(AIF) torevive around1,600 stalledhousing projects intop cities o Creationof Affordable HousingFund in the National HousingBank withan initial corpusof Rs 100 bn. • Revival in the real estate cycle could surprise the volume growth in each of the categories mentioned. Also Covid has accelerated the shiftfrom unorganized toorganizedplayersthere bybenefittinglargerplayers R E A L E S T A T E Building Materials (Cement, Plywood, Pipes,Tiles) – 18.0% weight Consumer Durables (AC’s, Ref, WM) – 1% weight Cables and Wires – 4.0% weight Paints – 1.5% weight Consumer Electricals (Fans, Water Heaters, Water Purifiers ) – 3.4% weight Sectors benefitting from revival in Real Estate, weights in DSP T.I.G.E.R. Fund Source: Portfolio as on 31 Jan 2022 1,244 2,357 2,687 2,781 2,600 3,120 3,900 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 FY08 FY12 FY16 FY20 FY21 FY22E FY23E Real Esate Sales Value (Rs bn)
  • 9.
    9 Multiple new themesemerging for private capex Source: Internal Themes Particular Cement • Capacity utilisationforthe cement industrywas 63% duringFY21. Cementindustryhas already announced capacity expansionplanof around 40-50mt over nexttwo years Metals • Sharp run up incommodity prices have alloweddomesticcompaniesto generate robustcash flows in FY21 and as prices are expectedto remainelevated,FY22-23E could also witnesswindfall cash generationresultinginultimate capex potential of Rs 2,400 bn over next2-3 yrs. Digitization • Digital technologieshave become increasinglypervasive.Fromautomotive factoriestobanks, digital systemsenable companiesto improve efficiency.The global demandfor digital transformation services is expectedtorise at a Compound Annual Growth Rate (CAGR) of around 16.5% over2021 to 2025. Data Centres • An investmentof INR345 bn on data centers overthe nextfive yearswhich also includeslandcosts as perJLL Research estimates. Performance Linked Incentives (PLI) related capex • In this year's Budget,about Rs 2,410 bn was earmarkedfor the PLI scheme for the nextfive years which isexpectedto increase the productionacross electronics,chemicals,pharma and consumer durablesoverthe nextfive years. • Large proportion of capex to be done byMNC’s innew areas like Electronics,Chemicalswhere specializedsolutionswill be required. Renewable energy • Indiais aiming to attain500 GW of renewable energyby2030. Electric Vehicles • The EV market is expectedtogrow at CAGR of 44% between2020-2027 which wouldleadto increasedspendingon charging infra,relatedpowertransmissionrequirementsandotherinfra. Source: Phillip Capital, Market reports, Veritis, JLL, India Energy Storage Alliance
  • 10.
    10 Focus on capexdrivers that can be in forefront in the next capex cycle Capex drivers are changing - High capital intensity sectors are witnessing lower capex while less capital intensive sectors such as Data Centersare becoming future Source: Internal. Old Capex Drivers Mining Cement Steel Roads & Railways Power Transmission Large greenfieldcapex Coal Based Power Plants New Capex Drivers Water Data Centre, Logistics, Automotive and Electric Vehicles Food & Beverage, Chemicals Roads Expressways Railway, Metro & High Speed Rail Power Distribution Brownfield capex + Industrial automation + Digitalization Renewable Energy
  • 11.
    [Title to come] [Sub-Titleto come] Strictly for IntendedRecipients Only Date * DSP India Fund is the Company incorporated in Mauritius,under which ILSF is the corresponding share class Tracking key data points as investment cycle builds-up
  • 12.
    12 Capex cycle buildupkey indicators 1,880 1,809 2,366 2,118 2,555 3,090 3,916 100 600 1,100 1,600 2,100 2,600 3,100 3,600 4,100 4,600 Apr -Dec'15 Apr -Dec'16 Apr -Dec'17 Apr -Dec'18 Apr -Dec'19 Apr -Dec'20 Apr -Dec'21 Capex (Rs. bn) On a cumulative basis, Govt. Capex grew by 26.8% yoy to Rs. 3.9tn in 9MFY22 from Rs. 3.1tn in 9MFY21 Rs. bn 12-2019 12-2020 12-2021 Growth (9M FY22 over 9M FY20) Total Capex 2555 3090 3916 53% Road 641 643 867 35% Railways 414 412 804 94% Water 120 1 262 118% Housing 96 833 138 45% Defence 884 58 912 3% Road, Railways and water sector are leading the capex Exports of Engineering Goods grew by 39.8% in 10M FY22 over 10M FY20, 17.2% -2.6% 6.6% 14.6% -17.5% 11.1% 17.1% 6.2% -6.2% -2.8% -3.0% -7.5% 39.8% -30.0% -20.0% -10.0% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 10M FY20 10M FY21 10M FY22 Engineering goods exports (%, yoy) Source: GoI, CMIE, Spark Research 6.0 10.1 11.7 10.4 7.6 12.6 6.9 4.1 2.7 6.5 6.1 5.3 5.3 6.9 6.1 3.1 6.5 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 9M CY05 9M CY06 9M CY07 9M CY08 9M CY09 9M CY10 9M CY11 9M CY12 9M CY13 9M CY14 9M CY15 9M CY16 9M CY17 9M CY18 9M CY19 9M CY20 9M CY21 PrivateSectorNewInvestment (Rs. tn) Project announcements by private sector are picking up, announcements over Rs. 6.5tn worth of Capex in FY22 (YTD)
  • 13.
    13 More PLI schemesannounced and in pipeline to drive manufacturing capex Source: GoI •March 2020: It started with 3 sectors namely (i) Mobile Manufacturing and Specified Electronic Components, (ii) Critical Key Starting materials/Drug Intermediaries & Active Pharmaceutical Ingredients, (iii) Manufacturingof Medical Devices •Nov 2020: 10 new key sectors which have been approvedby the UnionCabinet in November 2020. •Dec 2021: Performance Linked Incentive (PLI) scheme for semiconductors and display manufacturing ecosystem with an outlay of Rs760bn. Investments target is Rs 1,700 bn over the next six years. •Two new PLI schemes to be added: PLI Scheme for an additional sector, Drones and Drone Components, has also been approved by the Union Cabinet in September 2021. It is expected that another key sector HydrogenElectrolyzer PLI couldbe announced •Solar manufacturing PLI: MNRE has asked for a total outlay of Rs230bn for solar manufacturing PLI which has been approvedfromearlier outlay of Rs 45 bn Category Overall PLI Incentive committed (Rs. Bn) Committed/Likely Investment/Capex (Rs. Bn) Mobiles 410 110 Pharma 150 100 Pharma – API/KSM 63 54 Pharma - Medical Devices 28 9 WhiteGoods & LED 62 79 Solar PV 45 175 Telecom 122 30 Food 109 61 Automobile& Auto Components 260 425 IT Hardware 50 24 Speciality Steel 63 400 Textile 107 190 EV Battery 181 450 Semiconductor 760 2300 Total 2,410 4,407
  • 14.
    [Title to come] [Sub-Titleto come] Strictly for IntendedRecipients Only Date * DSP India Fund is the Company incorporated in Mauritius,under which ILSF is the corresponding share class Investment team & Investment Framework
  • 15.
    15 Investment team Rohit Singhania–managingthefund sinceJune2010 • Rohit is the Fund Manager for DSPTax Saver Fund. He is also the co-Fund ManagerforDSP India T.I.G.E.R.fund* (The InfrastructureGrowthand Economic Reforms), DSP Equity Opportunities Fund* and DSP NaturalResources and New EnergyFund *. • Rohit joined DSPInvestment Managersin September 2005, as Portfolio Analyst for the firm's Portfolio Management Services (PMS) division and then transferred tothe Institutional Equities Teamin June 2009. He focused on sectors like Auto, Auto Ancillaries, Metals, Infrastructure, SugarandHotels. FUND MANAGER* * Jay Kothari -Dedicated Fund Manager for overseas investments. Years in brackets ( ) is years of experience. Experienced investment team with a wide coverage of Indian equity markets TEAM SUPPORTING THE FUND MANAGER Chinmay Sapre (9) AVP, Aviation, Realty Abhishek Ghosh (12) AVP, Small & Mid Caps, Transportation Kaushal Maroo (11) AVP, Autos, Ancillaries, Cement Dhaval Gada (10) AVP, Banking and FinancialServices Abhishek Rathi (13) AVP, Financials & Industrials for Long / Short Aayush Ganeriwala Manager, Oil& Gas, Metals Suryanarayanan Manian, CFA (10) VP, Tech, Telecom, Media, FMCG Nilesh Aiya(12) AVP, ForensicResearch Resham Jain, CFA (14) VP, Small & Mid Caps,Agri inputs, Textiles, Chemicals, Retail Charanjit Singh – managing the fund sinceJan 2021 • Joined DSPIM in Sep 2018 to cover Industrials, Utilities, Infrastructure and Consumer Durables sectors • Prior to joining DSPIM, he was working with B&Ksecurities • He has been rated as No. 2 analyst in 2017 Asia Money Polls in Industrials sector & been consistently voted in top quartile by leading investment managersin previous roles Chirag Dagli VP, Healthcare Abhishek Singh (14) AVP, Portfolio Manager Bhavin Gandhi (15) AVP, Portfolio Manager
  • 16.
    16 Investment Framework forstock selection & portfolio construction Source: Internal. Stock Selection Identificationof themes/business • Visibilityfornext3-5 years • Lower cyclicalityand abilityto grow eveninlow industrial growth • Simple businesses fromsectorswith secular growth potential • Focus on executionand not on narratives • Leadershipinthe industryor among the top 3 players • Innovationledby access to technology FinancialMetrics • Stable margin, focuson cash flowsand low leverage • SuperiorROCE/ROE over cycles Management • Credible,capable & passionate withpast track record • Prudentcapital allocationdecision Valuations • Reasonable valuationsinconjunctionwith fundamentals Portfolio Construction o Fund seeksto reduce concentration risk by owninghighernumber of good qualitystocks & follow approach to own basket of stocks inindustrial products,buildingmaterialsand construction o Fund preferstockswith lowervolatilityand drawdowns
  • 17.
    [Title to come] [Sub-Titleto come] Strictly for IntendedRecipients Only Date * DSP India Fund is the Company incorporated in Mauritius,under which ILSF is the corresponding share class Portfolio Positioning
  • 18.
    18 Portfolio Snapshot ason Jan 31,2022 Source: DSP Internal; The sector(s)/stock(s)/issuer(s) mentioned in this note do not constitute any recommendation of the same and the Fund may or may not have any future position in these sector(s)/stock(s)/issuer. Name of stock Sector Weight (%) Larsen & Toubro Ltd. Construction 5.1 RelianceIndustries Ltd. Oil & Gas 4.9 UltratechCement Ltd. Cement and Building Materials 4.5 Siemens Ltd. Automation 3.2 ACC Ltd. Cement and Building Materials 3.1 NTPC Ltd. Power 3.0 BhartiAirtelLtd. Telecom 2.5 Power Grid Corporation of India Ltd. Power 2.4 KNR Constructions Ltd. Construction 2.1 ABB India Ltd. Industrial CapitalGoods 2.1 Top 10 holdings Top Sectors MarketCapitalisation(%) Asset Allocation Large Cap, 32 Mid Cap, 31 Small Cap, 36 Equity, 99.2 Cash, 0.8 7% 9% 8% 9% 9% 16% 18% 0% 5% 10% 15% 20% Automation Consumables/FMIG Consumer Electircals/Durables Utilites Manufacturing Construction Cement & Building Materials
  • 19.
    19 Portfolio parameters –Growth, Return ratios & Valuations for DSP T.I.G.E.R Fund Source: Internal; Portfolio as on 31 Jan 2022. Above future estimations can vary with actual results and should not be consider as performance/ return of scheme/ Fund. DSP research estimatesforthe portfoliocompaniesindicate weightedaverage growthof 15.7% in topline and17.6% growth in PAT in FY23E Weightedaverage ROE’s are expectedto expandmarginallyfrom15.1% in FY22E to 16.6% in FY23E Valuationsforthe DSP IndiaT.I.G.E.R. Fundbased on harmonic mean are at 18.4x P/E on FY23E and 2.6x P/B on FY23E Note: Growth & ROE are weighted average; Valuations are harmonic mean 24.3% 24.8% 9.6% 15.1% 15.7% 23.5% 17.6% 16.6% 13.1% 15.4% 18.3% 17.3% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% Sales Growth EBITDA Growth PAT Growth ROE Growth& ROE FY22E FY23E FY24E 22.2 18.4 15.9 3.0 2.6 2.3 11.9 10.1 8.8 - 5.0 10.0 15.0 20.0 25.0 FY22E FY23E FY24E Valuation PE PB EV/EBITDA
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    20 DSP India T.I.G.E.R.fund - Opportunity to gain exposure to core sectors Source: NSE Index weight of Coresectors in Nifty 50 Index Core sectors may be at the cusp of turnaround ; However,representationinthe Nifty50 index has reducedby 41% from peakin Dec 07. Exposure is mere 14.5% byexcluding RIL DSP India T.I.G.E.R.Fund providesan opportunityfor investortotake overweightexposure onthe core sectors which can bene fit from revival of capital cycle & economic reforms Investormay considerallocating~ 10-15% of equityexposure to the fund for long-terminvestmentofatleast10 years Includes Reliance Industries (RIL) weight – 10.8% Core Sectors Dec-07 Feb-22 Capital Goods 10.5 2.9 Cement 2.1 2.3 Metals 9.0 3.1 Oil & Gas (Ex RIL) 13.5 1.6 RIL 11.9 10.8 Oil & Gas 25.4 12.5 Telecom 11.4 2.2 Utilities 8.2 2.2 Total 66.7 25.3
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    21 Key Risk -What will make us change our view? Source: Internal Risk Particular Aggressive Government spending plans • Governmenthas set out an aggressive spendingplanfor infrastructure whichcould get delayeddue to eitherfiscal considerationsor change inpriorities.Thiscould impact the earningsof companies across sub-sectors. Delay in adoption of new themes • Delayin adoptionof new themesof automationand digitalizationcouldleadto companiesto shiftto more commoditizedproductcategoriesto drive growth Lack of proper implementation of schemes • Success of keyinitiative Make inIndia is critical for the sector. There is an expectationof increasedcapacity additionsin varioussectors. • Lack of proper implementationof PLI schemesor abilityto attract large foreignplayers could derail these initiatives Changes in technology • Changes intechnologycould de-rate some of the sectors significantlysuchas shiftfrom coal based energyto renewables,changingenergyefficiencynormsacross sectors such as motors, pumps etc. • Inabilityof the companiesto scale up to new requirementscouldimpact theirfuture growth Adverse regulatory changes • Adverse regulatorychangescould lead to de-ratinginsectors such as Gas utilities,power transmissionsector ESG • ESG is becomingan increasinglyimportantfactorfor the companieswhich we track on consistentbasis
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    [Title to come] [Sub-Titleto come] Strictly for IntendedRecipients Only Date * DSP India Fund is the Company incorporated in Mauritius,under which ILSF is the corresponding share class Performance
  • 23.
    23 Performance Scorecard 40% 54% 52% 83% -58% 76% 14% -33% 37% -9% 61% 1% 4% 47% -17% 7% 3% 52% 1% 39%38% 42% 62% -55% 87% 17% -25% 32% 8% 34% -2% 5% 33% 3% 11% 17% 27% 0% 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 YTD 2022 DSP India T.I.G.E.R Fund S&P BSE 100 TRI Infrastructure boom phase – Fund outperforming broader equity market Followed by phase of underperformance Calendar Yearreturns Sector underperformed broader equity market for last 3 years; signs of sector revival evident from 2021 & YTD 2022 fund performance S&P BSE 100 TRI is benchmark of DSP India T.I.G.E.R. fund. Regular plan – Growth option considered. Click here for performance of scheme in SEBI prescribed format and of other schemes managed by same Fund Managers. Past performance may or may not sustain in future and should not be used as a basis for comparison with other investments. Source: MFIE, Data as on 31 Jan 2022
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    [Title to come] [Sub-Titleto come] Strictly for IntendedRecipients Only Date * DSP India Fund is the Company incorporated in Mauritius,under which ILSF is the corresponding share class Appendix
  • 25.
    25 Central Govt. Capex– Growth in Railways, Defense; Roads flat Segment (Rs bn) FY21 FY22RE FY23BE FY23/FY22RE Differential FY22RE/FY21 FY23BE/FY22RE Railways 2345.8 2148.0 2456.0 308 -8.43% 14.34% Defense 1399.2 1457.8 1604.2 146 4.18% 10.04% Roads 1546.0 1862.5 1877.4 15 20.48% 0.80% Drinking Water and Sanitation 110.0 450.1 600.0 150 309.19% 33.30% Housing and Urban development 405.0 686.2 719.8 34 69.44% 4.89% RenewableEnergy 95.1 215.8 285.8 70 127.07% 32.42% Power 476.4 490.1 514.7 25 2.88% 5.03% Water resources and rejuvenation 114.0 180.3 189.9 10 58.06% 5.33% Rural 329.6 343.9 390.0 46 4.35% 13.41% Other CPSU's 425.2 618.2 1130.1 512 45.39% 82.81% TotalCapex 7246.2 8452.9 9767.9 16.65% 15.56% Special Assistance as Loan to States for Capital Expenditure 118.3 150.0 1000.0 850 26.79% 566.67% Source: GoI • Significant increase oninfrastructure spending. Budgetary allocations to capex are projectedto go upby a whopping 35% YoY. However,accountingfor the decline incapex spend throughextra-budgetary resources (PSUs/NHAI/Railways ownresources),the overall capex is expectedto grow17% inFY23 against 15% in FY22. • Higher allocationPLI schemes,data centres gettinginfra status,extensionof concessional tax rates fornew mfg. units • Expands available market for local manufacturers materially inthe defense sector as 68% of capital outlay for domestic industry in FY23 from51% inFY22by more. • Railways - Majority spends are towards new lines construction,gauge conversion,doublingof lines and roadsafety.
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    26 Disclaimer & Productlabelling details Fund Product Suitability Riskometer DSP IndiaT.I.G.E.R. Fund Benchmark –S&PBSE 100 TRI DSP India T.I.G.E.R. Fund (The Infrastructure Growth and Economic Reforms) An open ended equity scheme following economic reforms and/or Infrastructure development theme This 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 Scheme is suitable for them. In this material DSP Investment Managers Private Liimited. (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 orvariations 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. 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). 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 which is available at www.dspim.com. Past performance may or may not sustain in future and should not be used as a basis for comparison with other investments. ForIndex disclaimer click here. The strategy/ Investment Framework/ Investment approach mentioned has been currently followed by the Scheme and the same may change in future depending on market conditions and other factors. There is no assurance of any returns/potential/capital protection/capital guarantee to the investors in this Scheme.. All figures and other data given in this document for the fund and the model are as on Sep 30, 2021 (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 the AMC 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 DSP Mutual Fund. MutualFund investmentsare subjectto marketrisks,read allschemerelateddocumentscarefully.
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