Presenting ICICI Prudential Bharat Consumption Fund - Series 3

Transcription

1 Never Ending Consumption Story Participate in One of the biggest consumption markets of the World Presenting ICICI Prudential Bharat Consumption Fund - Series 3 1

2 India: One of the fastest growing large economy GDP (USD bn) 60 Years after independence for First Trillion 7 Years for Next Trillion India took 60 years after independence to enter prestigious Trillion Dollar Club. But it took ~ 7 years to double the size Growing GDP with Young Population makes Consumption a structural story for sustainable period Data as on 31 st Dec Past Performance may or may not sustain in future. 2

3 India Growth Story India with its 1.25 billion population enjoys a demographic advantage with 50% of its population in the working age India s per capita GDP has seen significant growth in last decade. Government s focus to improve rural income through rural focussed initiatives. The proportion of nuclear households, which has been on the rise during the past two decades, is projected to increase to 74% by Decision Makers in such household are Younger and more enthusiastic. Digital Influence on broader consumer spending is significant and growing rapidly. Source: IMF, Citi Research. Data as on

4 Transition of Consumption Pattern Changing Needs and Wants Nuclear Families may further fuel the consumption demand. The stocks/sectors mentioned in this presentation is only for illustration purpose only. The stocks mentioned herein are a part of the scheme benchmark i.e Nifty India Consumption Index. The sector(s)/stock(s) mentioned in this presentation do not constitute any recommendation of the same and ICICI Prudential Mutual Fund may or may not have any future position in these sector(s)/stock(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. 4

5 Aspects of India s Changing Shape of Consumption In terms of consumption & spending, the two top consumer categories Elite and Affluent may become the largest combined segment by 2025, accounting for 40% as compared to 27% in The share of next billion and strugglers may come down from 49% to 36% by Rising Affluence (%) Annual gross household income (thousand dollars) Elite: >30.8 Affluent: Aspires: Next Billion: Strugglers:< Strugglers Next Billion Aspires Affluent Elite E BCG CCI Consumption survey, BCG analysis, March 20, E estimate 5

6 Millennials: Redefining India s Consumption Story In India, the population of individuals born between 1980 and 2000 is 450 mn, which is one of the highest in the world. Millennials forms 35% of India s population With largest millennial population globally, India offers a growth potential for consumer markets and retailers. Millennials have grown up in an increasing urbanized India with a healthy economic environment. Differ from previous generations by their lifestyle choices, consumption pattern, significant need for convenience and brand preferences. Share of Expenditure from Incremental Income Source: Elara Capital Report, March Deloitte Feb

7 Indian s Normal Day Colgate Britannia Page Industries Bajaj Auto Maruti Suzuki ITC Bharti Airtel Zee Entertainment Havells India Alkem Laboratories The stocks/sectors mentioned in this presentation is only for illustration purpose only. The stocks mentioned herein are a part of the scheme benchmark i.e Nifty India Consumption index. The sector(s)/stock(s) mentioned in this presentation do not constitute any recommendation of the same and ICICI Prudential Mutual Fund may or may not have any future position in these sector(s)/stock(s).the 7 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.

8 Needs & Desires Roti Makaan Kapda Eating Better Looking Better Needs are changing faster Mobility & Connectivity Leisure Better Home Well-being (Health & Education) The stocks/sectors mentioned in this presentation is only for illustration purpose only. The stocks mentioned herein are a part of the scheme benchmark i.e Nifty India Consumption index. The sector(s)/stock(s) mentioned in this presentation do not constitute any recommendation of the same and ICICI Prudential Mutual Fund may or may not have any future position in these sector(s)/stock(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. 8

9 Consumption Sector Consumer Sector s topline has been under pressure for past years, post double digit growth since FY06 to FY 14. Growth has picked up in FY 18 helped by favorable base of FY17 and some pick up in volumes due to GST led price cuts. Rural momentum coming back Rural growth is out pacing urban growth over last 3 quarters. Forecast of normal monsoon in FY 19, higher minimum support price for Kharif crops, Robust new launch pipeline and distribution expansion may help further recovery in rural growth. Consumer Sales and Rural wage Growth One year into GST The GST did cause short term challenges in trade channel, but is expected to be game-changer for categories with higher un-organised sector share. Source: ibef.org, Makeinindia, Jefferies, Mar 2018, JM Financial April

10 Opportunities Consumer Durable Media Healthcare Pharma Auto Bharat Consumption Power Paint Telecom Hotel, Resorts Textile Consumer Non Durable The stocks/sectors mentioned in this presentation is only for illustration purpose only. The stocks mentioned herein are a part of the scheme benchmark i.e Nifty India Consumption Index. The sector(s)/stock(s) mentioned in this presentation do not constitute any recommendation of the same and ICICI Prudential Mutual Fund may or may not have any future position in these sector(s)/stock(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. 10

11 Consumer Durable: Structural Demand Drivers Intact Reforms in Electrification Several reforms have been implemented in power transmission and distribution across India. India s Power consumption recorded 7% CAGR for past 3 years. India s Power Consumption Penetration of Electric Goods Strong demand is expected for electricals/durables companies on back of a) Improving Power Penetration b) Higher Disposable Incomes c) Widely available financing schemes d) Push for rural housing Source: ibef.org, Makeinindia, Edeiweiss Research, JM Financial April

12 Consumer Durable: Structural Demand Drivers Intact Key Product Growth TV segment is expected to grow at a CAGR of ~10% over FY Indian Appliances and Consumer Electronics Industry is expected to grow a 9% CAGR over FY Electronics market is one of the fastest growing segment, expected to record ~40% CAGR over FY Air conditioners and refrigerators are perceived as premium products. Cooling product segment is expected to grow at ~15% YoY in FY19E. Television Air conditioner Consumer Electronics Computer/ Laptop Consumer Appliances Washing Machine Refrigerator Audio System Other home appliances Crompton Greaves Consumer Electricals Havells India Ltd Titan Company Ltd Source: ibef.org, Makeinindia, Edeiweiss Research, Sharekhan Research The stocks/sectors mentioned in this Presentation is only for illustration purpose only. The stocks mentioned herein are a part of the scheme benchmark i.e Nifty India Consumption Index. The sector(s)/stock(s) mentioned in this presentation do not constitute any recommendation of the same and ICICI Prudential Mutual Fund may or may not have any future position in these sector(s)/stock(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. 12

13 Auto Indian Auto Industry is one of the largest in the world. Accounts for 7.1% of country s GDP. India is also a prominent auto exporter. Automobile exports grew ~15.8% YoY between Apr-Feb Production of passenger vehicles, commercial vehicles(cv), three wheelers and two wheelers grew at ~14.4% YoY between Apr-Feb Strong growth in the sector is expected owing to (i) New Launches, Rising Income, Easy financing options. (ii) In CVs, Increased demand for last mile connectivity post GST implementation. (iii) Strong traction in rural demand. Automotive sector is likely to contribute in excess of 12% of India s GDP as per AMP Bajaj Auto Ltd Hero Motocorp Ltd Mahindra & Mahindra Ltd Maruti Suzuki India Ltd Source: Auto Motive Mission Plan , Auto Sector Report May 2018 IBEF, Sharekhan Research Report The stocks/sectors mentioned in this Presentation is only for illustration purpose only. The stocks mentioned herein are a part of the scheme benchmark i.e Nifty India Consumption Index. The sector(s)/stock(s) mentioned in this presentation do not constitute any recommendation of the same and ICICI Prudential Mutual Fund may or may not have any future position in these sector(s)/stock(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. 13

14 Entertainment Media & Entertainment Advertising expenditure is expected to revive from the impact of Demonetization & GST Implementation and is expected to grow at 13% YoY. The low base, rising consumer sentiment and upcoming state and national elections may revive the demand in advertising industry. With annual movie releases, India is the one of the largest market. Multiplexes can be the key beneficiary of uptick in discretionary spend. India continues to be a underscreened market with just 8 screens/mn (population) vs. 16 in case of China and 12 in case of Thailand. Radio ad revenue is expected to grow at CAGR of 9.4% during CY18- CY20E Multiplex s Screen Penetration Screens / mn Population Source: Kaviraj Securities, KPMG-FICCI Media and Entertainment industry report 2016, ICICI Securities. IDBI Capital, HDFC Securities. SUN TV Network Ltd. ZEE Entertainment Enterprises Ltd The stocks/sectors mentioned in this Presentation is only for illustration purpose only. The stocks mentioned herein are a part of the scheme benchmark i.e Nifty India Consumption Index. The sector(s)/stock(s) mentioned in this presentation do not constitute any recommendation of the same and ICICI Prudential Mutual Fund may or may not have any future position in these sector(s)/stock(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. 14

15 Aviation, Hotel & Resorts: Flying High Aviation Sector Total Domestic Passengers (In mn) India is the world s third-largest and fastest growing air travel market. Passenger growth has been in double digits over the last 45 months. Domestic passenger volumes grew 26.2% YoY in April Domestic Industry load factor stood ~89.4% in April Hotel & Resorts Total Passenger handled by Airports Revenue per available room(revpar) across premium hotels was up by 6% YoY led by strong growth in demand and benign supply growth. RevPar across business destinations grew on back of strong demand due to conferences and exhibitions organised by Government bodies and trade associations. Events like IPL boosts the industry growth. Occupancy rates across most cities in month of April 2018 was above 70%. INDIAN Hotels Company Ltd Source: Dhanki Research, Elara Capital, External Reports,Motilal Oswal Report on Aviaton March 2018, DGCA. JM Financial. IPL: Indian Premier League The stocks/sectors mentioned in this Presentation is only for illustration purpose only. The stocks mentioned herein are a part of the scheme benchmark i.e Nifty India Consumption Index. The sector(s)/stock(s) mentioned in this presentation do not constitute any recommendation of the same and ICICI Prudential Mutual Fund may or may not have any future position in these sector(s)/stock(s).the portfolio of the 15 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.

16 FMCG India has been one of the fastest growing FMCG markets worldwide. It is fourth largest sector in the economy. House hold and personal care is the leading segment, accounting for around 50% of overall market. Historically, Indian CPG (Consumer Packaged Goods) companies growth has been 7-8% of volume growth and 4-5% of pricing growth. Volume growth has been driven by rural consumption and an increase in distribution reach. Source: Eurometer and Morgan Stanley Research. * indicate number from

17 FMCG On an average over last 10 years, Indian CPG categories have delivered strong top-line growth amidst a higher inflationary environment. Among larger categories Savoury snacks grew at 23% and Yogurt grew at 26%. Among emerging categories: Deodorants grew at 31% and Petcare registered growth of 24%. Revival in earning growth of FMCG companies is attributable to 1) Pickup in consumer sentiments and revival in rural areas. 2) Premiumisation of products. 3) Increased reach in rural areas. 4) Un-organised to organised shift. Britannia Industries Ltd. Colgate Palmolive(India) Ltd Dabur India Ltd Emami Ltd Source: Morgan Stanley Research The stocks/sectors mentioned in this Presentation is only for illustration purpose only. The stocks mentioned herein are a part of the scheme benchmark i.e Nifty India Consumption Index. The sector(s)/stock(s) mentioned in this presentation do not constitute any recommendation of the same and ICICI Prudential Mutual Fund may or may not have any future position in these sector(s)/stock(s).the portfolio of the 17 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.

18 Non-Discretionary Spend Pharma & Healthcare Healthcare has become one of largest sectors both in terms of revenue & employment. Spend on healthcare at ~5% of GDP has been much lower than major economies. India s competitive advantage lies in its large pool of well-trained medical professionals and also its lower cost compared to counter parts in Asia and World. Power India s per capita power consumption was 1075 kwh in FY according to CEA. This is 1/3 of World s average. India s Power consumption has been increasing steadily, recording ~7% CAGR for past 3 Years. As of 2011, only 55% of India s rural households had access to electricity; this jumped to 73% by Dec Source: NTPC Annual Report JM Financial April The stocks/sectors mentioned in this Presentation is only for illustration purpose only. The stocks mentioned herein are a part of the scheme benchmark i.e Nifty India Consumption Index. The sector(s)/stock(s) mentioned in this presentation do not constitute any recommendation of the same and ICICI Prudential Mutual Fund may or may not have any future position in these sector(s)/stock(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. 18

19 Aim to benefit from Rising Consumption of Bharat, Invest In ICICI Prudential Bharat Consumption Fund Series 3 (A Close Ended Equity Scheme following Consumption Theme) NFO Period : June 27 th, 2018 to July 11 th, 2018 Fund Manager*: S Naren and Atul Patel * Priyanka Khandelwal for investment in ADR/GDR/ Foreign securities. 19

20 ICICI Prudential Bharat Consumption Fund -Series 3 Sectors that can benefit from consumption theme like Consumer Non- Durable, Consumer Durable, Auto, Healthcare Services, etc. that are likely to play out well with ~3.5 years investment horizon Helps in bottom-up stock selection with ~3.5 years view Ability to reduce net equity risk at market peaks Aims to limit downside of the portfolio by using hedging strategies The stocks/sectors mentioned in this presentation is only for illustration purpose only. The stocks mentioned herein are a part of the scheme benchmark i.e Nifty India Consumption Index. The sector(s)/stock(s) mentioned in this presentation do not constitute any recommendation of the same and ICICI Prudential Mutual Fund may or may not have any future position in these sector(s)/stock(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. 20

21 ICICI Prudential Bharat Consumption Fund - Series 3 Tenure : 1300 days NFO Period : 27 th June 2018 to 11 th July 2018 MICR cheques : Till end of business hours on 11 th July 2018 RTGS and transfer cheques : Till end of business hours on 11 th July 2018 Switches : Switches from equity schemes and other schemes 11 th July 2018; Till cut off time (specified for switch outs in the source scheme) Plans/Option : ICICI Prudential Bharat Consumption Fund - Series 3 Cumulative & Dividend ICICI Prudential Bharat Consumption Fund Series 3 Direct - Cumulative & Dividend Entry / Exit Load : Nil Minimum Application Amount : Rs.5,000/- (plus in multiple of Re.10 thereafter) Liquidity : To be listed Benchmark : Nifty India Consumption Index Fund Manager* : S Naren and Atul Patel *Priyanka Khandelwal for investment in ADR/GDR/ Foreign securities. 21

22 Riskometer & Disclaimer ICICI Prudential Bharat Consumption Fund - Series 3 is suitable for investors who are seeking:* Long term wealth creation A close ended equity scheme that aims to provide capital appreciation by investing in a well-diversified portfolio of stocks that could benefit from growth in consumption and related activities. *Investors should consult their financial advisors if in doubt about whether the product is suitable for them. Mutual Fund investments are subject to market risks, read all scheme related documents carefully. Disclaimer: All figures and data given in the document are dated unless stated otherwise. In the preparation of the material contained in this document, the AMC has used information that is publicly available, including information developed in-house. Some of the material used in the document may have been obtained from members/persons other than the AMC and/or its affiliates and which may have been made available to the AMC and/or to its affiliates. Information gathered and material used in this document is believed to be from reliable sources. The AMC however does not warrant the accuracy, reasonableness and / or completeness of any information. 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. The AMC (including its affiliates), the Mutual Fund, the trust and any of its officers, directors, personnel and employees, shall not liable for any loss, damage of any nature, including but not limited to direct, indirect, punitive, special, exemplary, consequential, as also any loss of profit in any way arising from the use of this material in any manner. The recipient alone shall be fully responsible/are liable for any decision taken on this material. The sector(s)/stock(s) mentioned in this presentation do not constitute any recommendation of the same and ICICI Prudential Mutual Fund may or may not have any future position in these sector(s)/stock(s). Past performance may or may not be sustained in the future. 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. 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 ICICI Prudential Mutual Fund. The information contained herein should not be construed as a forecast or promise nor should it be considered as an investment advice. 22

23 Thank You 23