Investing in a bull run

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Investing in a Bull Run Where To From Here?
Speaker Mr. Nilesh Shetty, Fund Manager
Equities August 20th 2021
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Vertical Takeoff after the Covid Scare
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520 500 480 460 440 420 400 380 360 340 320 300 28
0 260 240 220 200 180 160 140 120 100 80
SP BSE Smallcap Index
SP BSE Midcap Index
SP BSE Sensex Index
Rebased in INR
Aug-13 Dec-13 Apr-14 Aug-14 Dec-14 Apr-15
Aug-15 Dec-15 Apr-16 Aug-16 Dec-16 Apr-17
Aug-17 Dec-17 Apr-18 Aug-18 Dec-18 Apr-19
Aug-19 Dec-19 Apr-20 Aug-20 Dec-20 Apr-21
Source Bloomberg Finance L.P., As of July 31,
2021, Past Performance may or may not be
sustained in future. Aug 28, 2013 is the day
when the Rupee hit an all-time low and Sensex hit
2013 intra-day low
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2020- Flight to Safety 2021- Play on Recovery
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Securities Name YTD 2021 CY 2020 CY 2019 CY 2018 CY 2017 CY 2016 CY 2015 CY 2014 CY 2013 CY 2012 CY 2011 CY 2010 CY 2009
BSE-30 INDEX SP BSE SENSEX 30 INDEX 11.0 17.2 15.7 7.2 29.6 3.5 -3.7 32.0 10.7 28.0 -23.6 19.1 83.3
BSE200 INDEX SP BSE 200 IDX 17.4 17.9 10.4 0.8 35.0 5.4 -0.2 37.6 6.2 33.2 -26.0 17.8 90.9
BSE500 INDEX SP BSE 500 IDX 19.8 18.4 9.0 -1.8 37.6 5.2 0.4 39.1 5.0 33.4 -26.4 17.9 92.7
BSETCD INDEX SP BSE INDIA Cons.Dur IDX 20.0 22.2 21.5 -8.3 102.9 -5.8 24.8 67.3 -23.9 47.1 -16.2 69.6 100.6
SPBSHLIP INDEX SP BSE INDIA HEALTHCARE IDX 21.1 62.6 -2.8 -5.4 1.1 -12.5 15.9 48.8 24.9 39.8 -12.1 35.4 71.2
SPBSITIP INDEX SP BSE India IT IDX 28.5 60.3 11.8 27.3 13.3 -6.1 6.4 19.5 62.3 0.7 -14.6 34.1 135.9
BSETECK INDEX SP BSE India TECK Index 22.5 46.5 11.1 12.4 18.8 -7.6 5.4 18.2 49.3 3.0 -15.5 25.4 69.9
SPBSCGIP INDEX SP BSE India FMCG Index 8.9 13.2 -2.2 12.1 33.3 4.8 3.6 20.1 12.5 49.5 11.7 35.5 43.3
BSEAUTO INDEX SP BSE India Auto IDX 9.0 14.3 -9.9 -21.3 33.3 10.4 0.1 53.8 8.9 42.8 -18.6 40.3 208.3
BSEOIL INDEX SP BSE India OilGas Index 13.3 -0.6 10.6 -12.6 37.8 30.4 -1.2 14.1 5.9 15.8 -28.3 2.7 75.0
BSEPOWR INDEX SP BSE INDIA POWER INDEX 28.9 11.4 -0.6 -14.3 22.0 3.0 -5.3 25.5 -12.4 12.8 -39.1 -5.4 76.1
BSETCG INDEX SP BSE India CapGoods IDX 27.3 12.5 -8.8 -0.5 41.4 -2.3 -7.8 51.9 -4.0 36.6 -47.1 10.0 106.1
BANKEX INDEX SP BSE INDIA BANKEX IDX 9.5 -2.1 21.1 5.7 40.0 8.4 -9.0 67.1 -8.0 59.1 -30.7 35.0 86.8
BSEREAL INDEX SP BSE India Realty Index 28.5 9.2 27.6 -30.7 107.2 -5.3 -12.8 9.4 -31.2 54.4 -51.6 -25.7 70.0
BSETPSU INDEX SP BSE INDIA PSU IDX 37.4 -12.8 -1.1 -18.7 22.7 16.9 -14.9 44.8 -16.5 18.6 -31.6 1.2 82.5
BSEMETL INDEX SP BSE INDIA METAL INDEX 83.9 18.4 -10.2 -16.3 52.8 43.2 -28.8 11.1 -7.5 21.5 -46.5 2.1 238.8
Source Bloomberg Finance L.P. based on daily
total returns as of July 31, 2021. Past
Performance may or may not be sustained in future.
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Corporate Profits at an all time High,
Expectations of Strong Demand Rebound
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Corporate profitability hit a record in Q4FY21
driven by strong revenue growth and strict
control on costs Demand is expected to rebound
post unlock driving sales, but higher input costs
and normalizing other costs may see profit growth
lag revenue growth
Source CMIE- Economic Outlook. Past Performance
may or may not be sustained in future.
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Consensus Earnings Upgrades After Many Years of
Flat Growth
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Source Bloomberg Finance L.P as of July 31,
2021. Past Performance may or may not be
sustained in future.
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Demonetization, GST, Covid Large Companies
Getting Larger
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Listed Company Growth YoY
Industry Growth YoY
20 15 10 5 0 -5 -10 -15 -20 -25 -30
16
14
14
9
6 5
6
3
3
-1
-5
-7
-8
-12
-13
-15
-16 -17
-18
-25
Paints
Steel
Cement
Ceramic tiles
Passenger cars
CV
Bank Credit
AMC AUM
Gen. Ins. Premium
Two-wheelers
Source CMIE, RBI, IRDAI Note YoY growth in
FY21, Volume Growth for manufacturing sectors
like paint,steel,auto etc. Credit growth for
private sector banks is compared to
systemic credit growth. Source CMIE- Economic
Outlook, Data as of March 2021
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Economic Activity Gradually recovering
Economic activity in some sectors are at similar
or higher than pre Covid-19 level.
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Production Trends June 2021 as of Feb 2020 Credit and Consumption Trends June 2021 as of Feb 2020
Cement Production 89.2 Bank Credit 107.1
Steel Production 99.2 Bank credit to Industry 102.7
Fertilizer Production 108.4 2 Wheeler Sales 87.3
Coal Production 65.5 Passenger Car Sales 93.2
Crude Oil Production 103.5 Tractor Sales 185.5
Natural Gas Production 120.2 Air Cargo 88.5
Petroleum Refinery Products 87.9 Rail Freight traffic 105.9
Electricity Generation 108.6 Port cargo 96.1
Source Advisor Office of Economic, RBI Bulletin,
SIAM, CMIE, Tractor Manufacturer Association,
AAI, Indian Railways, Indian Port
Association Data as on June 2021.
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Risks to the Recovery
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Low Vaccine coverage increases probability of a
third wave. Festive season to start from Sep 2021
Job Losses amongst salaried employees and Rising
Inflation may impact consumer discretionary spend
Since the pandemic began, there has been a
reduction in number of employed by 20 million
Inflation in Raw materials and increase in Crude
prices may force RBI to raise interest rates
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Covid Containment To Accelerate Inflows
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Period Net Foreign Activity (USD bn) Net Local Activity (USD bn) Total Activity (USD bn) Change in SP BSE-30 TRI in that period ( ) ( USD)
CY 2003 6.6 0.1 6.7 86.5
CY 2004 8.7 -0.3 8.4 20.5
CY 2005 10.7 3.0 13.7 40.2
CY 2006 8.1 3.4 11.5 51.6
CY 2007 17.7 1.7 19.4 67.0
CY 2008 -12.0 3.3 -8.7 -60.8
CY 2009 17.5 -1.2 16.3 90.3
CY 2010 29.4 -6.1 23.3 24.2
CY 2011 -0.4 1.3 0.9 -35.7
CY 2012 24.4 -3.9 20.5 24.1
CY 2013 20.1 -3.7 16.4 -1.9
CY 2014 16.1 3.9 20.0 29.2
CY 2015 3.2 11.1 14.3 -8.1
CY 2016 3.2 7.1 10.3 0.9
CY 2017 7.8 18.4 26.2 37.8
CY 2018 -4.4 17.6 13.2 -2.0
CY 2019 14.4 7.6 22.0 13.1
CY 2020 23.0 -7.5 15.5 14.5
YTD 2021 6.8 0.6 7.4 9.0
July 2021 -1.5 2.6 1.1 0.2
Cumulative 200.9 56.4 257.3 1218.9
Source Sebi.gov.in, NDSL, As of July 31, 2021.
Past Performance may or may not be sustained in
future.
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Domestic Institutional Flows Come Back After
Second Wave ebbs
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Source CLSA and Bloomberg Finance L.P., as of
July 31, 2021
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Rise Rise of the Retail Investor
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Spiking PER Overstates Valuation Given The Prior
Quarters Gap Down
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Source Bloomberg Finance L.P., as of July 31,
2021. Past Performance may or may not be
sustained in future.
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PER Elevated Will Mid Caps Deliver on Market
Expectations?
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Source Bloomberg Finance L.P., as of July 31,
2021. Past Performance may or may not be
sustained in future.
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Scenarios To Ponder
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Corporate Earnings Liquidity Equity Valuations Equity Returns
Rising Easy High Positive
Rising Tight Moderate Slight Decline
Stagnant/Falling Easy Moderate Slight Decline
Falling Tight Falling Sharp Correction
Most Likely Scenario, But Returns may moderate
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Dont Be Distracted By Global Macro
Economic Activity Led To A 10x Growth In Earnings
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Source CLSA and Bloomberg Finance L.P., as of
July 31, 2021 CY 21 and CY 22 are estimate
numbers. Past Performance may or may not be
sustained in future.
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Portfolio Reflects Value
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QLTEVF As Of SP BSE-30 Index SP BSE-30 Index
Number of equity stocks 28 30
Median market capitalization (USD mn) 11,693 39 30,317
Weighted dividend yield 1.4 132 1.1
Weighted PER March 2023E 13.7x 71 19.3x
Weighted EPS Growth March 2023E 22.6 98 23.0
PEG Ratio (excludes cash) 0.61x 72 0.84x

T12M PE 22.6x 62 36.6x
Weightage of stocks with PER gt 20 72 91
Weightage of stocks with PER gt 30 47 66
Source Quantum AMC As of July 31, 2021 QLTEVF -
cash weight excluded SP BSE-30 Index weight
is based on free-float. SP BSE 30 Index column
depicts the QLTEVF as a percentage of SP BSE 30
Index fundamentals. The figures mentioned in WTD
PER, WTD EPS and PEG ratio are calculated on the
basis of Bloomberg consensus estimates for
companies owned by the Composite as well as the
companies in the SP BSE 30 as of the reporting
date i.e. July 31, 2021. Past Performance may or
may not be sustained in future.
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Trying to Time Markets is a Folly Follow a Simple
Asset Allocation Strategy to Deal with Market
Cycles
6-24 months Expenses Balance Surplu?s 80-85

• Liquid Fund/ Bank Deposit

• 4-5 Diversified Mutual Funds

Wealth Builder
Stress case scenario Diversification

• Gold/Gold ETF

15-20
Keep 6-24 months of expenses in Liquid Fund, Bank
Fixed Deposit to be withdrawn in case of
emergency
Please note that the above is the suggested fund
allocation only and is not to be considered as
investment advice / recommendation, please
seek1i7ndependent professional advice and arrive
at an informed investment decision before making
any investments
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2021- A Simple Asset Allocation Strategy to Deal
with Market Cycles
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Solutions to meet Sustainable Development Goals
SGD-17
SMILE
WHAT IS SMILE?
THE SMILE STORY
OUTCOME SO FAR
SMILE was born out of our desire to support
credible NGOs and create a steady stream of
money flow for them
Since 2018, Quantum MF investors have supported
7 NGOs from diverse sectors via the SMILE
facility
SMILE enables Quantum MF investors to contribute
10 of their investment in eligible schemes to
charities vetted by HelpYourNGO
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SMILE Process Flow
DONATION RECEIPTS HelpYourNGO sends donation
receipts and 80G Liaises with NGO grantees
Monitors reviews
DONATE TO NGOS
INVEST IN SMILE FACILITY Q Long Term Equity Value
Fund Q Equity Fund of Funds Q Dynamic Bond
Fund Q Multi Asset Fund of Funds Q Gold Savings
Fund Q Liquid Fund
Donated to NGOs selected by investors and
vetted by HelpYourNGO
Q Stands for Quantum for scheme names
Investors receive periodic program reports from
HelpYourNGO on the NGOs supported by them
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Disclaimer Terms of Use
The data in this presentation are meant for
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