India - Positioned to perform in 2016

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India - Positioned to perform
Its not ‘2008’…limited room for downside risk

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Table of contents
India: Fundamentally sound micro story
What globe is saying about India
Why year 2016 could be strong for India
Our portfolios & Performance overview
1
2
3
5
Super Value – A bunch of next generation super stars
Flexicap – All weather PF with a perfect mix of large, mid & small cap
Nifty Plus – Opportunity to get extra over index
A
B
C
Alliance – A fair mix of both the worldsD
AUM expectations6

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India: Fundamentally sound micro story1
A recent Goldman Sachs study forecasts India to grow at a sustainable
rate of 8% growth until 2020. The current infrastructure thrust could lead
to strong uptick in economic activity.

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IMF projected 7.5% growth rate for India in FY17
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7.3
5.9
30.2
31.6
7.3
5
29.8
31.1
7.5
5.3
29.6
31.1
GDP (YoY %)
CPI (YoY %)
Gross Savings (% of GDP)
Gross Investments (% of
GDP)
FY17 FY16 FY15
The macro story of India
continues to present
opportunity and nothing to
the contrary has happened
so far to change the view
The concerns in the equities
market in 2015 were on
valuations and that item also
seems to favorable now
given corporate earnings
have been steady and could
move into the robust territory
in a few quarters from now

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Redemption from ‘Emerging Markets’ impacted India, no
issues over fundamentals
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 India, the strongest BRIC. Unlike Brazil,
China, Russia and even Australia, etc; India’s
position with a net commodity importer reaps
rewards in the current economic situation.
 Market resilience: 35 out of BSE 200 reported
>10% YoY growth in operations during Dec 15
quarter; however, their stocks declined by >10%
during past 1 yr
 Market stress limited to: Commodity
companies such as Metals, Oil Exploration,
Agri, etc and PSU Banks got impacted due to
global slowdown and NPAs and Bad loans
respectively
 Consumption theme expected to continue
for a long time: Infra, Autos and other
domestic consumption stories are strong
positioned. Retail banking is robust.
 Rural thrust augers well: Improving
fundamentals and strong outlook for economy
due to higher budgetary allocation towards core
segments confirms that market will bounce
back in the next couple of months.

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Strong fundamentals but cheap valuations
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01-Jan-2013 01-Jun-2013 01-Nov-2013 01-Apr-2014 01-Sep-2014 01-Feb-2015 01-Jul-2015 01-Dec-2015
P/E of 16x was touched
historically, when the things were
really bad and economy was
growing at 5+%
There is no reason for such valuation
when economy is growing at 7+%
TTM P/E valuation of SENSEX

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Why downside appears limited; get used to volatility
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 Two successive monsoon failures, 3rd is expected to be better: YET 10 out of
Top15 sectors of BSE 200 reported better December quarter numbers. Normal
monsoon this year could significantly change this picture positively.
 Expected Boost in Retail Investments: OROP and 7th Pay Commission could
trigger discretionary spend and improve retail investments.The equity MF SIP
book growth is significant and now amounts to over Rs.30,000 Crores additions
annually, thereby strengthening domestic MF industry to counter FIIs selling
pressure.
 Indian corporate continue to reduce debt: December 2015 earnings witnessed
decline in interest cost due to debt repayment and easing interest cycle.
 Economy on the path to grow over 7% for next few years: This presents an
excellent opportunity to pick a growth economy at valuations (17x FY16) of
developed economies.

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What globe is saying about India2
One Voice from all majors – “India is on right track”

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Global view on Indian economy
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the headline
 Prospects for India’s economy are brighter than other emerging
markets. After a slow start, Mr Modi’s government in pursuing reforms
more urgently
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your text
 At a time when global economies are facing tumoil, India is poised to
evolve into an even more attractive and stable destination for investors
on account of favorable macroeconomic conditions
Insert your own
text here
 Unlike China, India is less exposed to external headwinds and would
benefit from local consumption and lower commodities. Pegs GDP
growth at 7.5%, fastest in the world.
Placeholder for
your text
 Modernization of infrastructure underway, Indian productivity growth on
the rise and civil servant pay hike set to boost the domestic
consumption. Among all emerging markets, India will be the leading
grower for next 3-5 years
What are the big guys saying on India?

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Why year 2016 could be strong for India3

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Factors to play in 2016
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POSITIVES NEGATIVES
Growth in Domestic Consumption Exports to struggle
Modest revenue growth for ‘Prosumer’ Geopolitical instability
Lower commodities: Lower inflation &
Higher margins
Sales to drag for commodity players
Stable currency Uncertainty over Monsoon
Higher infra spending PSU Bank NPAs
Lower interest rates: Lower interest
expense & higher operating cash flow
Better balance sheet
Investment climate favorable

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Year 2016 offers a strong foundation
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 Consumption continues to be resilient and demand would pick up
 Commodity price weakness expected to continue and is expected
to keep infaltion in check
 Policy level movement has started and budgetary support could be
a major boost
 Market bouyancy expected to return with expected resilient
earnings on the back of continued margin strength due to lower
commodity prices and easing interest rates
 We believe that the SENSEX could end year 2016 comfortably
over 30,000; a 22% upside from current level.

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Our portfolios & Performance overview5
We invest in what we understand
We have been consistently outpacing the best 4 STAR or 5 STAR
rated MF offerings of industry

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RH NIFTY PLUS
RH
FLEXICAP
RH SUPER
VALUE
A mix of Mid & Small
cap stocks which
have a strong intrinsic
value and have ability
to become large cap
in long run
A perfect blend of
Large, Mid & Small
cap stocks selected
rigorously from CNX
500 list only.
A tightly aligned
scheme to CNX Nifty
along with few names
of high quality value
mid caps from BSE
200 list
A perfect categorization of value investing…

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We are comparing with the top performing 4-5 star rated Midcap Equity MFs
Performance 1 Month 3 Months 6 Months 1 Year
RH Super Value 7.42% -5.03% -3.74% -4.13%
Nifty Midcap 100 Index 6.10% -3.96% -3.22% -6.31%
DSP BR Small & Midcap 3.65% -6.56% -5.40% -8.96%
HDFC Midcap Opportunities 3.76% -5.81% -5.94% -8.30%
ICICI Prudential Value Discovery 4.70% -5.81% -6.21% -11.02%
 Best performance in all time frames.
 Scheme remains a value based highly rated mid-cap stock strategy and we have
demonstrated that superior 5 star rated consistent performance is possible by
sticking to value based approach
Performance overview
SUPER VALUE – A bunch of next generation super stars(A)
All returns are net returns as on 11th Mar 2016 for the respective periods (including Fees & Expense Ratios)

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We are comparing with the top performing 4-5 star rated Multi-Cap Equity MFs
Performance 1 Month 3 Months 6 Months 1 Year
RH Flexi cap 6.36% -5.92% -6.28% -8.49%
Nifty 500 Index 7.11% -2.60% -3.89% -12.18%
HDFC Equity 9.10% -8.15% -9.85% -17.13%
Franklin India Flexi cap 5.00% -2.97% -4.79% -8.80%
Birla Sun Life Equity 7.37% -1.93% -4.19% -9.48%
 Competitive performance in all time frames.
 Restructuring of this scheme started during March 2015 for legacy portfolios and
expected to improve its 1 year ranking by the end of FY16 due to recent
transformation.
 RH Flexicap remains a perfect blend of top performing large, mid and small cap,
which are value based and highly rated stocks in CNX 500.
FLEXICAP – All weather PF with a perfect mix of large, mid & small cap(B)
All returns are net returns as on 11th Mar 2016 for the respective periods (including Fees & Expense Ratios)

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We are comparing with the top performing 4-5 star rated Large Cap Equity MFs
Performance 1 Month 3 Months 6 Months 1 Year
RH Nifty Plus 5.54% -6.34% -8.59% -14.02%
Nifty 50 Index 7.65% -1.32% -3.58% -13.68%
HDFC Top 200 8.94% -6.02% -7.71% -15.97%
ICICI Prudential Focused Blue-chip 5.71% -4.10% -4.65% -12.47%
Birla Sun Life Top 100 6.51% -2.33% -3.88% -9.91%
 RH NiftyPlus is a tightly aligned portfolio of maximum 25 stocks, out of which 18-
20 are Nifty 50 large cap names.
 Though the scheme’s objective is to provide ‘PLUS’ return over CNX Nifty which it
has already reported; however, continued decline in marquee names and volatility
in market impacted the 12 months performance.
NIFTY PLUS – Opportunity to get extra over index(C)
All returns are net returns as on 11th Mar 2016 for the respective periods (including Fees & Expense Ratios)

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We are comparing with the top performing 4-5 star rated Balanced MFs
Performance 1 Month 3 Months 6 Months 1 Year
RH Alliance 2.75% -2.93% -3.72% -1.37%
VR Balanced Index 5.76% -1.10% -2.60% -10.49%
HDFC Prudence 5.71% -6.92% -6.43% -11.25%
ICICI Prudential Balanced 5.15% -2.80% -2.41% -6.72%
Franklin Balanced 4.01% -0.68% -1.49% -3.58%
 RH Alliance is a tightly aligned portfolio of maximum 25 securities, out of which 10-
15 are equity securities and rest in debt.
 Though the scheme’s objective is to provide stable return over VR Balanced Index
which it has already reported; however, continued decline in marquee names and
volatility in market impacted the 12 months performance.
ALLIANCE – A fair mix of both the worlds(D)
All returns are net returns as on 11th Mar 2016 for the respective periods (including Fees & Expense Ratios)

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AUM addition – Going for the kill !6
The base of the foundation is good; with the outlook presented earlier; it is
the right time to increase exposure to equties.
Get the momentum going – Take the AUM to 100 crores.
We believe that the quality Large & Mid cap segment with good
corporate governance and also sound fundamentals would see
smart rallies.

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Top-ups required to fuel numbers
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85
160
65
125
200
225
125
175
0
50
100
150
200
250
RH Flexicap RH Nifty Plus RH Super Value RH Alliance
INRMillion
AUM: Current & Targetted
Current Ideal
135%
41%
92%
40%
Market growth could be 20-25% for equities, and for balanced it might be 15%; however, to get
maximum in expected rally we need a higher base
1 Cr a
month 50
lacs a
month
25-30
lacs a
month
25-30
lacs
each a
month

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Currently our Equity AUM is at Rs.43.5 Cr. Despite recent infusions happened in past 3
months, the AUM level is stagnant due to continued fall in market. To get the maximum out of
upcoming rally, we need to focus strategically over our equity schemes. We could target at least
Rs.30 Cr of additional AUM by the end of Dec 2016.
 Flexicap Portfolio Despite its perfect blend and turnaround in recent past, AUM
allocation towards portfolio is lesser than it deserves.
 Nifty Plus Portfolio Continued decline in large caps impacted PF performance;
however, its elements are marquee names of Nifty 50 and have sound fundamentals.
Though it’s a largest PF amongst our equity offerings; however a continued infusion would
provide descent exposure to Large caps to the clients
 Super Value Portfolio Despite its exposure to Mid & Small cap stocks; we have
operated it as ‘Value Investing’ model. All the names have good corporate governance and
well known brands in their respective market. Investors with adequate risk apettite could go
for such schemes
 Alliance Portfolio A fair mix of debt and large cap equities. Though the scheme could
underperform in short term with equity indices; however it’s a perfect offering for retirement
planning of 10-15 years
Top-ups required…contd.

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Reach us:
tushar.p@righthorizons.com;
vinayak.k@righthorizons.com
+91 22 4100 2018
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