HDFC Nifty 100 Low Volatility 30 ETF · NSE:HDFCLOWVOL
HDFC Nifty 100 Low Volatility 30 ETF — HDFC Manufacturing Fund — Investor Presentation (April 2024)
37 slides from HDFC Nifty 100 Low Volatility 30 ETF's investor presentation, April 2024
Slide 1: Step into the Amrit Kaal with HDFC Manufacturing Fund
STEP INTO THE AMRIT KAAL WITH HDFC MANUFACTURING FUND NFO PERIOD: 26th April to 10th May, 2024
Slide 2: FY23 to FY30E growth in GDP, manufacturing and exports
FY23 FY30E Nominal GDP 3,353 2X 7,000 Manufacturing GVA 453 2.8X 1,281 Overall exports 778 2X 1,552 Merchandise exports 453 2.6X 1,198 Overall capex, GCF 1,080 2X 2,112 All figures in USD bn Source: PIB, UBS, Morgan Stanley Research GDP -Gross Domestic Product ₹ GVA- Gross value added GCF - Gross Cap
Slide 3: Need for Manufacturing in India's Amrit Kaal
Need for Manufacturing in India's Amrit Kaal MUTUAL FUND BHAROSA APNO KA HOLISTIC GROWTH Sistine ad se Groth LARGE SCALE EMPLOYMENT MACROECONOMIC [ - =2's-si STABILITY - Foreign Currency and Current Account Balance « Inflation
Slide 4: Most Asian peers have higher share of manufacturing in GDP
Average Real GDP Manufacturing Manufacturing share at Country High growth growth in high share at start of the end of high phase growth phase high growth phase growth phase Thailand 1985-1991 9.3% 21.9% 28.2% China 1990-2005 9.8% 9.1% 32% Indonesia 1983-1996 6.3% 13.4% 24.1 Vietnam 2010-2022 6.1% 19
Slide 5: Manufacturing leads to holistic growth and large-scale employment
Manufacturing leads to holistic growth and large-scale employment ~45% of India's labor force is employed in Agriculture China's journey to an upper-middle income country saw people moving from ‘farms’ to ‘factories’ Manufacturing adds ~4x more value vs. Agriculture… .....Explaining China’s jour
Slide 6: Manufacturing key to macroeconomic resilience
India’s merchandise import (Excl. Oil & Gold) has been increasing INR has depreciated 3.3% against USD (10Y CAGR) and median inflation has been ~5.2% Vietnam and China, with high manufacturing exports, have current account surpluses; leading them to enjoy much lower currency depreciation* and
Slide 7: Convergence of Several Enablers to provide Multi Decadal Growth
Convergence of Several Enablers to provide Multi Decadal Growth Large Consumer base Large & skilled Labour pool Focus on Atmanirbharta Large Export opportunity in the Multipolar World + Cost advantages vs peers + Low leverage + higher capacity utilization Improving infrastru
Slide 8: What ailed Manufacturing over the years? Steps taken to address these
What ailed Manufacturing Steps taken to address these Outcomes over the years? issues National Logistics Policy - Rank improved from 54 (in 2014) to 38 (in 2023) in High logistics costs Road and Rail infrastructure World Bank's Logistics Performance Index Investments in roads, power Road constru
Slide 9: India is Fastest Growing Consumer Market
India is Fastest Growing Consumer Market ..providing sufficient scale to support local manufacturing Trend in Consumption % India Share in World (Ex China) x India’s Rank in the World (Ex China) demand 90% The size of the bubble is Smart Phone Room ACs Fully Automatic Referigerators Cars 80% Phil
Slide 10: The shift away from China has accelerated post Covid pandemic
The shift away from China has accelerated post Covid pandemic China’s share in US Goods imports has declined from 21% in 2018 to 13% in 2023 India, Vietnam, Taiwan and Thailand have seen rising Manufacturing a product in India is on an average 15% share in US Goods imports cheaper relative
Slide 11: India's merchandise export market share to increase to 3.5% by 2031
India’s merchandise export market share to increase from 1.8% to 3.5% by 2031 implying CAGR of ~11% Merchandise exports is expected to grow faster than services India Exports (US$ bn) India Share in World Exports 2,000 7% 6.4% 6% 1,500 683 5% 4.4% 4.5% 4% 3.5% 9% 1,000 3% 2.4% 1.8% 2% 309
Slide 12: India largest pool of labor supply with lowest labour cost
India to become the largest pool of Labor supply…. ...with lowest labour cost globally Addition in 30-60 age cohorts by 2045 Average Monthly Earnings of Employees in Manufacturing Sector Increase/Decrease in age (30-60) population by 2045 US$ 200 6000 152 5058 150 5000 (mn people) 100 400
Slide 13: Projected exports by sector to FY28
FY28 Projected exports (US$ bn) Projected exports CAGR (FY22-28) Chemical ~$110 - $130 19% - 23% Pharma ~$45 - $50 16% - 18% Industrial machinery ~$70 - $75 18% - 20% Electrical & electronics ~$120 - $145 35% - 40% Automotive ~$45 - $55 15% - 18% Textile & apparel ~$95 - $110 13% - 16% Source:
Slide 14: China vs India production cost
Production cost per unit to manufacture a Fan Cost benefit for India vs Peer Manufacturing Nations China vs India US$ Cost assuming Total Production per year - 8,254,615 Estimated Cost for producing a fan in US$ China India 13 12.5 Cost of Goods Sold 4.25 4.67 12 Labour cost 0.83 0.34 11 10
Slide 15: Infrastructure improvements in India
1.76x in 2023 vs. 2014 2.5x Rail Network Electrified 2x in last 10 years 2.5x in 2023 vs 2015, in last 10 years (1,535 vs. 871 MTPA) (1.5 lakh km highway network) Target 500 GW by 2030 (85% vs. 33%) Average TAT improved DFC – Rail has increased Road avg kms/truck/day Peak power shortage of 1
Slide 16: India's presence in high value manufacturing supply chain services
India has significant presence in the services segment of the high value manufacturing supply chain Advanced manufacturing is also on the horizon underpinned by high-end service economy 20% of global chip design engineers are in India Qualcomm- one of the largest chip supplier has 35% of its empl
Slide 17: PLI schemes, corporate tax rates and defence production
Snapshot of PLI schemes and their impact Base Corporate Tax Rate in Asian Economies Indian Defence production could grow 4x by 2030 Number of sectors: 14 30% Indian Defence Production (US$ bn) 25% 43 22% Actual Investment Incremental Domestic till FY23 Production till FY23 20% +18.6% 15% Exports
Slide 18: Low Leverage and Improved Capacity Utilisation
Low Leverage within Listed Companies Improvement in Capacity Utilisation Levels Gross D/E ratio for large listed companies 85 1.2 (x) 0.99 Corporate leverage 80 1.0 at ~15 year lows Current : 74.6% 75 0.8 (%) 0.57 70 0.6 65 0.4 60 0.2 Sep-09 Mar-10 Sep-10 Mar-11 Sep-11 Mar-12 Sep-12 Mar-13 S
Slide 19: Manufacturing share in new company registrations and FDI
Share of Manufacturing Sector in New Company Manufacturing FDI (3 year rolling avg) (US$bn) Registrations 30% 17 15.0 15.3 28% 28% 15 13.7 13.7 13.0 13.0 13.0 12.7 13 12.3 12.3 26% 10.3 10.7 24% 11 22% 22% 8.3 21% 9 8.0 20% 7 18% 5 2015 2018 2022 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY1
Slide 20: Case Studies depicting India's rise as a Manufacturing Powerhouse
\ eS | Case Studies depicting India’s rise as a Manufacturing Powerhouse
Slide 21: Mobile phone manufacturing in India
Mobile phones were a large import item with import mix of 78% Over time local manufacturing ecosystem developed supported by PLI Value of production has increased ~7x and exports by 60x since FY16 India’s rank in global mobile phone exports has improved from 178 in FY16 to 5 in FY23 Production
Slide 22: iPhone production ramping up in India
iPhone Production ramping up in India Samsung led a large push in exports from Vietnam, and today accounts for >US$65bn of goods exports Year Models Global Shipment Share (%) US$ bn Samsung's Vietnam subsidiaries' exports, US$ bn 70 as % of Vietnam's merchandise exports, RHS 66 30% 2017 iPho
Slide 23: Auto parts and pharma manufacturing
Did you know? Indian pharma manufacturing has been a major success India is now the one of the largest manufacturer of 3Ws story, with formulations and biologicals exports growing and tractors (first), two-wheelers (second), heavy trucks at 8% CAGR vs 5% for the global market (third), and ca
Slide 24: Air conditioners, toys and EMS
Value of imports for AC and its components Toys exports have started to increase EMS Industry could mimic this success has nearly halved, and Import content per gradually & imports are declining fast story, with expectations of 25% CAGR unit has declined by ~60% in exports Import Value ($mn) Ind
Slide 25: Tiles market and cables and wires exports
Tiles market – India gaining an edge Cables and Wires – Exports have nearly doubled in 5 years China Tile Exports volume (MSM) India Tile Exports volume (MSM) India' C&W Exports 1,800 1,717 1,200 1,600 1,000 1,400 1,274 800 1,133 US$ mn 1,200 1,003 600 1,000 891 400 800 200 600 - 400 CY14 CY15
Slide 26: HDFC Mutual Fund
: MUTUAL FUND BHAROSA APNO KA
Slide 27: Core Portfolio, Investment Style and Stock Selection
Core Portfolio Investment Style / Portfolio Market Cap Stock Selection Concentration Core of the portfolio Stock selection will be Reasonably well Flexible across market (at least 80%) will be based on bottom-up diversified portfolio capitalisation invested in stocks that research ideas which are
Slide 28: Manufacturing covers ~37% of the overall market cap
Number of companies Market Cap (Rs lac cr) % Manufacturing Universe (Mcap >1000cr) 691 154.34 100% By Sector The Fund shall invest in companies: Capital Goods 190 25.89 17% Oil, Gas & Consumable Fuels 12 25.02 16% that are engaged in manufacturing Automobile and Auto Components 72 24.19 16% ac
Slide 29: NIFTY India Manufacturing Index has outperformed broader markets
Period CAGR returns Volatility Return-risk NIFTY India NIFTY India NIFTY India Manufacturing NIFTY 500 NIFTY 50 Manufacturing NIFTY 500 NIFTY 50 Manufacturing NIFTY 500 NIFTY 50 Since Inception 15.6% 14.9% 14.7% 21.4% 20.7% 21.4% 0.73 0.72 0.69 15 years 18.4% 16.9% 15.6% 18.6% 17.5% 18.0% 0.9
Slide 30: Risks and Mitigants
Risks Mitigants Slowdown in domestic and/or global With India emerging as the largest source of cost growth could impact revenue and effective labor supply its manufacturing value profit growth proposition should allow it to be able to grow faster than rest of the world Pace of reforms and impleme
Slide 31: Key themes supporting manufacturing growth
Growing consumption, investments and exports Changing geopolitical dynamics (China + 1) Emergence of India as a manufacturing powerhouse Government’s push for self-reliance (Atmanirbhar Bharat) by way of reforms and incentives Supportive macroeconomic environment with rising ca
Slide 32: Fund manager: Rakesh Sethia
Rakesh Sethia is a Fund Manager and Senior Equity Analyst and has collectively over 19 years of experience, of which 17 years in Equity research and 2 years in other corporate roles. In the current role, he covers Energy, Telecom, Logistics and Transportation and Consumer durables. He joined HDFC As
Slide 33: HDFC Manufacturing Fund scheme particulars
Particulars HDFC Manufacturing Fund Type of Scheme An open ended equity scheme following manufacturing theme Investment Objective To provide long-term capital appreciation by investing predominantly in equity and equity related securities of companies engaged in the manufacturing activity. There is
Slide 34: Asset allocation of the Scheme's portfolio
Under normal circumstances, the asset allocation (% of Net Assets) of the Scheme's portfolio will be as follows Minimum Allocation Maximum Allocation Types of Instruments Risk Profile (% of Net Assets) (% of Net Assets) Equity and Equity related instruments of companies 80 100 Very High in engaged in
Slide 35: Product suitability and Riskometer
This product is suitable for investors who are seeking*: Riskometer# • To generate long-term capital appreciation • Investment predominantly in equity & equity related securities of companies engaged in the manufacturing theme. *Investors should consult their financial advisers, if in doubt abou
Slide 36: Mutual fund investments are subject to market risks
The views expressed herein are as of 8th April, 2024 and are based on internal data, publicly available information and other sources believed to be reliable. Any calculations made are approximations, meant as guidelines only, which you must confirm before relying on them. The information contained i
Slide 37: Thank You
THANK YOU |
HDFC Manufacturing Fund — Investor Presentation (April 2024) on 6ix