IIFL MULTICAP ADVANTAGE PMS (Portfolio Management Service) June 2019

Strategy Objective The portfolio manager is to take a concentrated position in portfolio of 20-25 stocks with a bias towards Large cap stocks# with an objective of generating wealth over long period. At the same time hedge the portfolio using At the Money Nifty 50 Put option to safeguard against downside risk. Investment Allocation: Equity Investment – up to 100% of corpus Put Options (for Hedging) – up to 8% of Corpus* Liquid schemes of Mutual funds and other securities as per discretion of Portfolio Manager

#Portfolio as of 30th Jun '19 has a large cap weightage of over 62% *In case put options are not available in the suitable lots to hedge the equity investment(s), the Portfolio Manager may invest in available lots which may result in either hedge exposure (i.e. contract value of put option) exceeding the value of equity investment(s) or hedge exposure being lesser than value of equity investments (upto 8%). The Portfolio Manager has discretion to buy Put options across tenors (1-3 years).

Investment Philosophy - The SCDV Framework

Cyclical Growth (C) Secular Growth (S) Core Portfolio: S Capital Goods Auto & Auto Ancillaries Cement Consumer Discretionary Merck Private Corp Banks Private Retail Banks Bajaj Finance Infrastructure Non-Banking Financial Co. Logistics HDFC Bank More than More Insurance Metals Retail Oil & Gas Downstream Muthoot Finance 15% PAT Growth PAT Tactical Allocation: C & D

Value Traps (V) Defensive Growth (D) ICICI Bank RBL PSU Banks Consumer Staples Oil & Gas – Upstream Healthcare Infosys Telecom IT Services

Utilities - Power Media Biocon Less than Less Credit Access Grameen

Less than More than 15% Avoid Allocation: V SBI^

Return on Equity

The mentioned securities in the SCDV framework are part of the current portfolio

The above statements / analysis should not be construed as an investment advice or a research report or a recommendation to buy or sell any security covered under the respective sector/s ^SBICyclical is in Value (PAT>15%, Trap due ROE to �inancial <15%) –Companies/performance inSectors the past that but show the highrecent growth data is but positive are affected and is byexpected market to cycles improve hence further need to be timed for entry and exit Secular (PAT>15%, ROE >15%) – High growth companies / sectors which show consistent growth across market cycles Defensive (PAT<15%, ROE >15%) – Companies / sectors that show consistent stable growth across market cycles Value Trap (PAT<15%, ROE <15%) – Companies/ sectors that are at attractive valuation but do not show commensurate growth.

Portfolio changes during the month Stock Action Rationale

Booked some gains in Procter & Gamble Health Ltd and reduced portfolio weightage in same. Investors would be Procter & Gamble Health Reduced getting Rs 440 per share dividend from Procter & Gamble Health Ltd which should be paid out by the company by Ltd. end of June’19

CESC Reduced Booked some gains in CESC as the company reported better than expected numbers and saw the stock giving good rally.

Added small exposure to Emami Ltd as there was some sharp correction in the stock around the time when Emami Added promoters were reducing stake in the company in order to reduce pledge shares. We had trimmed some of our position in Emami the previous month

IIFL Asset Management Limited (Portfolio Manager) Regd Off: 6th Floor, IIFL Centre, Kamala City, Senapati Bapat Marg, Lower Parel, Mumbai -400 013

Tel: (91-22) 4876 5600 • Fax: (91-22) 4646 4706 • Website: www.ii�lamc.com • CIN: U74900MH2010PLC201113 IIFL MULTICAP ADVANTAGE PMS (Portfolio Management Service) All data are as on June 30, 2019 and denominated in INR

Investment Theme & Strategy Performance (%) The objective of the strategy is to generate long Strategy/Benchmark 1 Month 3 Months 6 Months 1 Year 2 Years Since Inception term capital appreciation for investors from a portfolio of equity & equity related securities. IIFL Multicap Advantage PMS (0.23) 4.13 13.34 15.66 NA 10.11 The investment strategy is to invest in companies and in sectors that are available at S&P BSE 200 TRI (1.00) 0.72 6.46 8.24 NA 7.54 As IIFL Multicap Advantage PMS Strategy invest in long dated options which are not very liquid, the valuation of the said option is received from Independent provide earnings visibility. The strategy takes a signi�icant discount to their intrinsic value and concentrated position in stocks and due to multiple market factors, resulting in difference in pricing of the options, impacting the performance. As per the PUT Option price as on 30th June 2019, the returnsValuation mentioned Agencies (CRISIL)above across identi�ied period by would the Portfolio vary upto Manager. ~0.5% The on lower quotes side. received Returns for lesspurchase than oneand yearsale ofare the on said absolute option basis. provided Returns by the less Option than oneprovider year arevaries on endeavours to strategically change allocation absolute basis. Past performance may or may not be sustained in future. between sectors depending on changes in the Returns less than one year are on absolute basis. Past performance may or may not be sustained in future. business cycle. Historical Performance of Other Equity Strategies managed by the Portfolio Manager (%)

Strategy/ Benchmark 1 Year 2 Years 3 Years Since Inception Key Terms IIFL Multicap PMS 18.79 14.57 17.80 19.08

S&P BSE 200 TRI 8.24 10.34 13.34 9.83 Inception Date December 1, 2017 Returns more than one year are on compounded annualised basis. Past performance may or may not be sustained in future.

Sector - Top 6 Holdings Market Capitalization Bloomberg Ticker NA Financials 43.39% Small Cap, 9.73% Information Technology 13.10% Mid Cap, Benchmark Index S&P BSE 200 TRI Health Care 11.17% 19.96%

Industrials 8.55%

Materials 6.59% Large Cap, 62.67% Consumer Discretionary 4.05% Schedule of Charges 0% 25% 50%

Portfolio – Top 10 Holdings (%) Risk Ratios Management As per executed Fee termsheet Company Weightage Beta 0.72 HDFC BANK LTD 7.52 BAJAJ FINANCE LIMITED 7.30 Sharpe Ratio 0.33 Exit Load As per executed PROCTER & GAMBLE HEALTH LIMITED 6.74 termsheet STATE BANK OF INDIA 6.12 Information Ratio* 0.80 ICICI BANK LTD. 5.92 INFOSYS LIMITED 5.49 Treynor Measure 0.02 Minimum Rs. 27 lakhs Investment WIPRO LTD. 4.70 Volatility** 14.66% Amount RBL BANK LIMITED 3.93 LARSEN TOUBRO LTD. 3.39 All risk ratios are calculated since inception AXIS BANK LIMITED 3.36 *Information Ratio is a ratio of portfolio returns above the returns of a 10300 Dec2020 Put option 1.95 benchmark index to the volatility of those returns. Portfolio Manager **Volatility measures the risk of a security by using the standard deviation of CASH 5.69 the asset returns. IIFL Asset Management Limited (IIFL AMC)

Top Gainers in Equity (Since Inception) Performance Top losers in Equity (Since Inception) Performance

Strategy Manager Profile PROCTER & GAMBLE HEALTH LIMITED 198.23% TATA MOTORS LTD (62.14%) - Aniruddha Sarkar BAJAJ FINANCE LIMITED 113.14% QUESS CORP LIMITED (38.53%)

Aniruddha Sarkar, Strategy Manager for IIFL CREDITACCESS GRAMEEN LIMITED 88.17% EMAMI LIMITED (24.66%) Multicap PMS, has over a 13 years of experience in the Financial Services sector. He is associated NAV Movement with IIFL Wealth Management Group for 11 years and has been involved in identifying IIFL Multicap Advantage PMS S&P BSE 200 TRI investment ideas across various sectors and 12.00 market-caps that can generate alpha for the

investors. He has been one of the key members 11.00 involved in setting up the entire equity advisory desk at IIFL Wealth. Prior to working with IIFL Wealth, he was working with a UK 10.00 based hedge fund. He holds an MBA in Finance from IMI, New Delhi and a Bachelor’s degree in 9.00 Commerce from St. Xavier’s College, Calcutta. Dec-2017 Apr-2018 Sep-2018 Feb-2019 Jun-2019

NAV shown is for the model portfolio. NAV of 10 assumed on the inception date (01-Dec-2017)

IIFL Asset Management Limited (Portfolio Manager) Regd Off: 6th Floor, IIFL Centre, Kamala City, Senapati Bapat Marg, Lower Parel, Mumbai -400 013

Portfolio Holdings Valuation Matrix

P/E P/B ROE EPS S. No Company CAGR FY18A FY19e FY20e FY21e FY18A FY19e FY20e FY21e FY18A FY19e FY20e FY21e (FY18-21)

1 MERCK 61.38 61.45 36.50 31.72 8.08 4.05 7.83 6.28 13.4% 8.8% 14.6% 22.0% 24.6%

2 HDFC BANK 35.14 30.59 25.19 20.89 6.00 4.44 3.90 3.39 17.9% 16.5% 16.1% 17.0% 18.9%

3 BAJAJ FINANCE 69.97 44.89 34.72 28.30 11.28 9.23 7.48 6.06 20.4% 22.6% 23.8% 23.7% 35.2%

4 INFOSYS 19.67 20.46 18.61 16.73 4.86 4.85 5.22 4.84 24.5% 23.7% 27.0% 30.0% 5.5%

5 ICICI BANK 28.44 48.67 13.02 10.82 2.02 1.96 1.73 1.52 6.6% 3.7% 12.9% 13.8% 38.0%

6 STATE BANK OF INDIA -30.96 60.56 8.88 7.08 1.07 1.06 0.95 0.85 -3.5% 1.8% 11.5% 12.9% 63.5%

7 WIPRO 16.70 19.04 17.00 15.77 2.77 2.25 1.94 2.26 16.1% 13.0% 12.3% 13.3% 1.9%

8 RBL BANK 44.42 33.09 26.97 19.70 4.22 3.80 2.75 2.45 11.5% 12.2% 12.3% 13.1% 31.1%

9 BIOCON 109.10 44.39 25.63 20.21 7.09 6.19 5.24 4.34 13.5% 14.9% 22.1% 23.5% 75.4%

10 TECH MAHINDRA 18.64 16.52 14.76 13.05 3.72 3.18 2.78 2.44 21.3% 20.7% 20.1% 19.9% 12.6%

11 MUTHOOT FINANCE 14.00 12.30 10.54 9.17 3.10 2.64 2.25 1.92 24.1% 23.2% 23.0% 22.6% 15.2%

12 CREDIT ACCESS GRAMEEN 43.44 21.10 15.54 10.53 4.73 3.17 2.69 2.20 11.8% 16.8% 16.8% 20.6% 60.4%

13 SRF 33.04 22.12 20.32 15.35 3.94 3.42 3.01 2.58 11.9% 15.5% 14.8% 16.8% 29.1%

14 PETRONET LNG 17.04 14.53 12.84 11.80 3.65 3.19 2.82 2.54 21.4% 21.9% 22.0% 21.6% 13.0%

15 SIEMENS 47.47 42.81 36.56 31.17 5.11 4.77 4.40 4.05 10.8% 11.1% 12.0% 13.0% 15.0%

16 ASIAN PAINTS 67.65 59.07 46.94 39.36 16.40 14.51 12.74 11.20 24.2% 24.6% 27.2% 28.5% 19.8%

17 QUESS CORP 34.60 38.36 26.15 20.07 4.30 3.93 3.43 2.94 15.4% 10.7% 14.0% 15.8% 19.9%

18 EMAMI 33.25 32.62 27.99 24.18 8.52 8.47 8.17 7.80 25.6% 26.0% 29.2% 32.3% 11.2%

19 AAVAS FINANCIERS 89.69 54.34 38.78 28.61 7.01 5.13 4.53 3.91 10.6% 11.5% 12.4% 14.7% 46.4%

20 AXIS BANK 70.50 41.62 19.20 15.53 3.06 2.92 2.34 2.06 0.5% 7.2% 14.0% 14.1% 256.8%

21 CESC 8.00 7.87 6.60 6.09 0.83 0.98 0.87 0.78 10.3% 12.5% 13.2% 12.7% 9.5%

22 ULTRATECH CEMENT 0.00 51.62 41.29 32.26 4.45 3.77 3.46 3.12 8.8% 7.9% 8.7% 10.2% 13.3%

23 CROMPTON GREAVES 45.18 38.87 31.41 25.57 18.53 13.99 11.59 9.46 41.0% 36.0% 36.9% 37.0% 20.9% CONSUMER

24 LARSEN & TOUBRO 26.73 22.61 18.71 16.17 3.48 3.10 2.73 2.40 13.0% 13.7% 14.6% 14.8% 18.2%

25 CIPLA 32.23 30.82 25.75 21.28 3.12 2.89 2.65 2.41 10.5% 9.7% 10.7% 11.9% 14.8%

26 TATA MOTORS 5.21 -2.18 9.36 7.46 0.74 1.19 1.12 1.02 7.2% -54.3% 12.0% 13.4% -11.3%

27 L&T INFOTECH 25.06 18.62 16.22 14.06 7.26 5.86 4.80 3.97 34.2% 34.9% 32.5% 30.9% 21.2%

Source : IIFL AMC Research’

IIFL Asset Management Limited (Portfolio Manager) Regd Off: 6th Floor, IIFL Centre, Kamala City, Senapati Bapat Marg, Lower Parel, Mumbai -400 013

Commentary We have crossed the half way mark for CY2019 and the year has been on a positive note for Index and our investors alike. We may question the credibility of the market rally in the last 6 months considering that investors are in a dilemma seeing the markets reaching all-time highs with only selective stocks driving the markets and the broader market showing signs of weakness. However, the market has been behaving in line with our expectations wherein we have been highlighting over last several

movements make valuations uncomfortable for those few selected companies and it is prudent to trim positions in these names when valuations become stretched. We tooquarters have beenthat qualityfollowing earnings, these philosophies quality management over past and few consistencyquarters and of adding earnings into is new where names money where will the �low price into value and comfortthat is what is there. has been happening. But then such Now with Union Budget out of the way, we have crossed another milestone for the year. The budget reiterated the government’s focus on agriculture, MSMEs and

infrastructure. Contrary to the market expectations, the government continued to stick to its path of �iscal prudence, and in fact cut the �iscal pool for investments. The budget aimed to simplify regulations for foreign investors and also increased FDI limits for a few sectors. The decision to borrow in offshore marketsde�icit target is also from a major 3.4% shift to 3.3% in policy. for FY20. The governmentThe budget hasalso made made an key effort announcements to increase foreign in the banking�lows in andthe domesticNBFC space markets with an to aimimprove to provide liquidity relief and to create the sector a capital and encourage investment driven growth. Outlook for Indian markets remains buoyant and one of opportunity. India remains well positioned in the current global environment being an inherently domestic and consumption-driven economy, leaving it less exposed to global growth and trade disruptions. Recent slowdown in domestic consumption should pick up in second half of the year as liquidity in the system gets addressed and festive season picks up. However delayed monsoons could play spoil sport for rural income growth. Till July

while3rd, cumulative one has received rainfall excess was 28.1% rainfall. below normal with the weekly rainfall 6.4% below normal. On a regional cumulative basis, spatial distribution has been de�icient across India. Out of the 36 sub-divisions across India, till date, two have received scanty rainfall, 24 have received de�icient rainfall, nine have received normal rainfall, Clearly the scope for policy easing globally has gained momentum led by the rapid change in US interest rate expectations. With weak economic data out of the US

weakening recently. The recently concluded G20 meeting indicates that the US and China have agreed to disagree, in other words they seem to have reached a temporaryseemingly promptingtruce with ano more real progress dovish rhetoric on the frommain thesticking Fed andpoints. markets The lack not of anticipating any resolution a quick-�ix to the trade resolution dispute to means the US-China that uncertainty trade dispute, will continue, the USD hasand beenwith relative economic growth potentially looking better outside the US the USD could stay weaker for longer which is usually positive for emerging markets in general.

only have many MNCs become over-reliant on China but China itself has been tightening environmental and regulatory controls and is becoming a harder place to With the Indian government �irmly focused on reviving growth help may also come from multi-national companies (MNCs) looking to diversify their supply-chains. Not direct investment (FDI) and the ease of doing business, but it also offers access to a vast and growing domestic market. PM Modi had a busy few days at the G20 in Japan conductingconduct business. 9 bilateral India meetings would be with a key various bene�iciary countries of any on supply-chain trade and other relocation matters as – notexpect only more has the to comecountry as thebeen government improving itsseeks ranking further as FDIa destination opportunities for foreign in the period ahead which would also address another major concern of the government which is Jobs creation.

Portfolio performance during the month

falling by 1.12%. During the last 6 months the portfolio has gained by 13.34% as compared to BSE-200 TRI rising by 6.46% and Nifty-50 rising by 8.53%. The PMS portfolioDuring the has month been of outperformingJune’19, the IIFL the Multicap benchmarks Advantage consistently PMS portfolio over wasall time almost periods �lat at tabulated-0.23% return above as comparedand the Portfolio to BSE 200 manager TRI Index aims falling to generate 1.00% and favourable Nifty-50 risk-adjusted returns for the portfolio. Major gainers in the portfolio during the month of June’19 were SRF Ltd (+6.88%), Bajaj Finance (+6.17%), Aavas Financiers (+5.61%), CESC Ltd (+5.3%) and ICICI Bank (+3.16%). Major drags during the month were from Emami Ltd (-14.13%), Quess Corp (-11.02%), Biocon Ltd (-7.53%), RBL Bank (-7.09%) and Tech Mahindra (-7.07%).

Disclaimer:

Securities investments are subject to market risks and there is no assurance or guarantee that the objectives of the Strategy will be achieved. As with any securities investment, the value of a portfolio can go up or down depending on the factors and forces affecting the capital markets. Past performance of the Portfolio Manager may not be indicative of the performance in the future.

estimates and data included in this document are as on date and are subject to change without notice. The past performance of the Strategy is not indicative of its future performance. Client(s) are not being offered any guaranteed orThis indicative document returns is for throughinformational these services.purposes The only returns and should mentioned not be anywhere regarded in as this an offerdocument to sell are or notas apromised solicitation or guaranteedof an offer toin buyany themanner. securities While or utmost other careinvestments has been mentioned exercised while in it. Allpreparing opinions, this �igures, document, charts/graphs, IIFL Asset Management Limited does not warrant the completeness or accuracy of the information and disclaims all liabilities, losses and damages arising out of the use of this information. While we endeavor to update on a reasonable basis the information discussed in this document, there may be regulatory, compliance, or other reasons that prevent us from doing so.

be treated as advice relating to investment, legal or taxation matters. For tax consequences, each investor is advised to consult his / her own professional tax advisor. This communication is for private circulation only and for the Returns are dependent on prevalent market factors, liquidity and credit conditions. Strategy returns depicted are in the current context and may be signi�icantly different in the future. The contents of this document should not be suited to all categories of investors. Recipient shall understand that the aforementioned statements cannot disclose all the risks and characteristics. exclusive and con�idential use of the intended recipient(s). Any other distribution, use or reproduction of this communication in its entirety or any part thereof is unauthorized and strictly prohibited. The investments may not

availability or use would be contrary to law, regulation or which would subject IIFL AMC to any registration or licencing requirement within such jurisdiction. This document is not directed or intended for Distribution to or use by any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdictions, where such distribution, publication,

fees, management fees, trustee fees, Commission, brokerage, transaction charges, underwriting charges, issue management fees and other fees. For the purpose of trading and investments in securities, the Portfolio Manager transactsIIFL Asset through Management and maintain Limited dematand its account(s) group and withassociate IIFL Securitiescompanies Limited are engaged (associate in providing broker &various depository �inancial participant) services and IIFLfor the Wealth said servicesManagement may earnLimited fees (Holding or remuneration Company in of form IIFL ofAMC). arranger fees, referral fees, advisory

IIFL Asset Management Limited (Portfolio Manager) Regd Off: 6th Floor, IIFL Centre, Kamala City, Senapati Bapat Marg, Lower Parel, Mumbai -400 013

Tel: (91-22) 4876 5600 • Fax: (91-22) 4646 4706 • Website: www.ii�lamc.com • CIN: U74900MH2010PLC201113