Professional Documents
Culture Documents
Contents
Phillipines
India
China
Thailand
Hong
Malaysia
Japan
Indonesia
Kong
Singapore
Korea
Taiwan
-2
1QFY05
2QFY05
3QFY05
1QFY06
2QFY06
3QFY06
4QFY06
1QFY07
2QFY07
4QFY05
Australias 0 0
India China Indo Phil Japan Thai Korea Malay HK Sing
Source: CLSA
India Growth Story: Penetration
Low product penetration offers tremendous opportunities…
120
PC/Laptop 12.5
60
Malay
Thai
Phil Air Conditioners 7.6
40
R&D 0 0
FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06
Wal-Mart is already sourcing goods Auto exports Auto component exports (RHS)
worth US$2.5bn from India
centers in
MNC R&D
India
Source: CLSA
India Growth Story: Global Size
(mt)
Achieving
Tata+Corus will become 5th largest steel company
120 110
100
Global 80
60
Size!!! 40
20
32 31 30 24 23 19 18 18
5
Tata Steel targets to be a 40mt 0
Tata+Corus
Tata Steel
Baosteel
JFE Steel
US Steel
Arcelor-
Nippon
Posco
Nucor
Corus
Steel
Mittal
company by 2012, from 7mt today
PX: Paraxylene
MEG: Mono Ethylene Glycol
PTA: Purified Terephthalic Acid
PP: Polypropylene
India Growth Story: Infrastructure
SPENDING
Spend on key infrastructure to double in next five years TO BOOST
GROWTH!
Public-private partnership – airports, ports, roads
Buoyancy in tax revenues supports enhanced government participation
Airports 20 15 15 24 25 400
Irrigation 151 139 208 222 252 1300
Ports 7 5 5 10 20 500
Power 232 312 340 350 346 2000
Earnings growth
Risks
Overview
Equity Market: Valuations
Average 10000 20
8000
15
Driver to returns 6000
4000 10
Earnings Growth 2000
0 5
Aug-99
Jun-00
Aug-04
Jun-05
Apr-96
Apr-01
Feb-97
Dec-97
Oct-98
Feb-02
Dec-02
Oct-03
Apr-06
Feb-07
PE Rerating
The Index was a capitalization weighted composite of stocks traded on the New York Stock Exchange
(NYSE), American Stock Exchange (ASE) and the National Association of Securities Dealers Automated
Quotation system (NASDAQ)
All returns are annualized by compounding the arithmetic average of daily returns
Equity Market: Earnings Growth
Earnings may slow but should remain at >15%
Profit growth has Net Profit Growth (%)
consistently Sector FY06 FY07E FY08E
outperformed Auto 25.0% 20.1% 8.4%
expectations Banks 17.5% 21.0% 26.9%
45
(%) Expected profit growth
Cement 22.7% 124.7% 1.4%
40 Consumer 21.2% 19.9% 8.7%
Actual profit growth
35 E&C 59.8% 42.4% 23.6%
30 Energy 15.8% 17.9% 10.8%
25 IT 32.7% 46.4% 29.0%
20 Metals 8.2% 35.7% 1.7%
15 Pharma -16.4% 121.2% 11.3%
10 Telecom NA 158.2% 54.2%
5 Utility 12.8% 18.7% 17.5%
0 Sensex Total 19.6% 36.3% 17.1%
Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep
Source: Merrill Lynch
03 03 04 04 04 04 05 05 05 05 06 06 06
Source: CLSA
Equity Market: Risks
May-05
Jan-07
Jan-05
Jan-06
Sep-05
Sep-06
May-06
proactive
Global slowdown
Headline WPI Primary Articles Manufactured Products
Liquidity
Political risks
Be genuinely diversified
Jul-05
Jul-06
Jan-04
Apr-04
Jan-05
Oct-04
Apr-05
Jan-06
Oct-05
Apr-06
Jan-07
Oct-06
Apr-07
68%
Jul-04
Jul-05
Jul-06
Jan-04
Apr-04
Jan-05
Jan-06
Oct-04
Apr-05
Oct-05
Apr-06
Jan-07
Oct-06
Apr-07
Source: NSE
Why “Small & Mid Cap” Companies?
Faster but cheaper!
Sector Comparison - Large vs Mid Cap
Carborundum
Thermax Ltd
Greaves Ltd
Products Ltd
Blue Star
Crompton
Consumer
Godrej
Univ
Source: Enam
HDFC Mid-Cap Opportunities Fund
Investment Objective The investment objective of the Scheme is to
generate long-term capital appreciation from
a portfolio that is substantially constituted of
equity and equity related securities of Small
and Mid-Cap companies
What are Mid-Cap Those companies that are either a
Companies? constituent of CNX Midcap Index or
companies that have market capitalisation of
Rs. 500 crore or more but does not exceed
the market capitalisation of the largest
constituent of CNX Midcap Index
What are Small-Cap Those companies whose market
Companies? capitalisation is lower than Rs. 500 crore
HDFC Mid-Cap Opportunities Fund: Product Features
*The balance proportionate unamortised initial issue expenses will be recovered from the unitholder if
the unitholder exits the scheme before the amortisation of initial issue expenses is completed.
HDFC Mid-Cap Opportunities Fund: Asset Allocation
The investment in Securitised Debt will not normally exceed 25% of the net assets of the Scheme
HDFC Mid-Cap Opportunities Fund: Risk Management
Small and Mid-Cap companies carry higher risk than large cap companies,
particularly over the short and medium term. The Scheme endeavors to control risk
by adopting following investment strategy:
companies
Risk Management
Why “Close – Ended” Fund?
25000
13404
20000
12606
7002 11632
15000
3596
5382
5612 8390
10000 4420
6150 3900 4424
5000
7443 7420 6564
5289 5679 5493
0
Statutory Details: HDFC Mutual Fund has been set up as a trust sponsored by Housing Development Finance Corporation Limited and Standard Life Investments Limited (liability restricted to their contribution
of Rs. 1 lakh each to the corpus) with HDFC Trustee Company Limited as the Trustee (Trustee under the Indian Trusts Act, 1882) and with HDFC Asset Management Company Limited (“HDFC AMC”) as the
Investment Manager.
Disclaimer: CRISIL Fund Governance & Process Quality Rating (FGP) reflects CRISIL’s current opinion of HDFC AMC’s (“the AMC”) governance and process quality. The rating of CRISIL is not an opinion
of the HDFC AMC’s willingness or ability to make timely payments to the investor. The rating is also not an opinion on the stability of the NAVs of the funds under the management of this AMC, which could vary
with market developments. A CRISIL rating is not a recommendation to buy / sell/ hold the units of various schemes of the AMC. CRISIL ratings are based on the current information provided to CRISIL by the
AMC or obtained by CRISIL from sources it considers reliable.
CRISIL may revise, suspend or withdraw a rating as a result of new information or changes in circumstances or unavailability of information. CRISIL is not responsible for any errors in transmission and
especially states that it has no financial liability whatsoever to the subscribers / users / transmitters / distributors of this rating.
Fund House ratings involve a detailed assessment of all aspects of an AMC’s functioning: organisational structure and corporate governance; investment processes; risk management practices; operational
processes, selling and client servicing practices.
Thank You