EIP Presentation

ENAM ASSET MANAGEMENT
Portfolio Update Emerging India Portfolio (EIP)

June-2012
This document is provided for informational purposes and is not intended as an offer to sell or solicitation of an offer to buy securities or other instruments. Our services will be rendered strictly in accordance with the SEBI (Portfolio Managers) Regulations, 1993. Please read the Disclosure Document prior to engaging our services. The information contained herein is based on our assumptions and can be changed without any prior intimation. This information must not alone be taken as the basis for an investment decision. Please consult your financial, legal or tax advisors. Investment in securities is risky and there is no assurance of returns or preservation of capital. Neither the firm, nor its directors, employees, agents or representatives shall be liable for any damages whether direct or indirect, incidental, special or consequential including lost capital, lost revenue or lost profits that may arise from or in connection with the use of this information. No part of this material may be copied or duplicated or redistributed without prior written consent.
Agenda
1
2 3 4 5
Fundamental Equities Platform

The India Story
Outlook
Market Cycles Emerging India Portfolio
ENAM Fundamental Equities Platform

INVESTMENT PHILOSOPHY
Seek to identify high-quality businesses that are structurally well-positioned, have sustainable competitive advantages and strong execution capability for consistent long-term growth
Opportunity
Size and attractiveness Addressability
Longevity
Sustainable competitive advantages and their lead time
Management
Intellect + Integrity Alignment of objectives
Value Accretive
EVA Positive, duration and magnitude Free cash flows Return on incremental capital Improper capital allocation can be destructive
Discipline
Focus Avoid distractions Volatility is not a threat, its an opportunity ! Correcting mistakes ought to be a religion Ignorance and denial drive averaging
Quality and sustainability of growth

Risk mitigation
Predictability, adaptability, resilience

Entry barriers Technology and processes Access to natural resources / markets Costs, productivity and efficiency Brands and distribution network Replicability and scalability of business model
Orientation towards minority

Adaptability and innovation Ambition tempered by reality
Incremental improvements can generate disproportionate returns
Being part of a herd never helped anybody

Differentiate between value based / event based and hype based buying
Enam / Asset Management / India Fundamental Equities Platform / EIP / - 4 -

RESEARCH PROCESS
Research and investment process
S&P CNX 500, other select ideas
Prospective Investment Universe

BSE 500, CNX S&P 500 Selective coverage outside the above Special cases, such as stocks with PIPE investments
Investment Universe Research & Analysis Idea Generation
Over 250 companies
Selection criteria
Market cap > INR 10 Bn (~USD180 mn) Key ratios Qualitative aspects Thematic views
40-50 stocks ~25 stocks
ENAM Investment Universe

Universe selection is a comprehensive and ongoing feature of the investment process, done using sophisticated proprietary financial models Over 250 companies thus selected are covered using rigorous research process Represents over 80% of market cap Revised quarterly
Portfolio Construction, Risk Management & Monitoring

INVESTMENT PROCESS
UNIVERSE Defining the playing field
DETAILED FINANCIAL ANALYSIS In-depth Analysis
IDEA GENERATION & PORTFOLIO CONSTRUCTION High Conviction Investments
PORTFOLIO REVIEW Tracking existing investments
UNIVERSE SELECTION IS A COMPREHENSIVE & ON-GOING FEATURE OF OUR INVESTMENT PROCESS: 1) Quarterly review by the Investment team 2) Process involves comprehensive analysis based on various criteria

WE UNDERTAKE A VERY COMPREHENSIVE BUT A SIMPLE MODEL FOR FINANCIAL ANALYSIS. THIS INVOLVES: 1) Dissecting the P&L to arrive at real profits from Operations - This goes a long way to determine the sustainable margins 2) Balance Sheet Analysis to evaluate efficient utilization of capital 3) Close monitoring of key drivers that may impact the operating performance
TEAM HAS EXTENSIVE KNOWLEDGE OF COMPANIES AT GRASS ROOT LEVEL
OUR PROCESS INVOLVES: 1) Financial Analysis 2) Discussions amongst internal and external analysts 3) Management meetings 4) Understanding of internal and external levers governing the sustainability of performance 5) Meeting competitors to assess competitive strengths 6) Evaluating attractive entry levels and potential returns 7) Strict adherence to risk management guidelines
PORTFOLIO MONITORING INVOLVES: 1) Closely monitoring domestic and global macro factors 2) Actively engaged with the company management 3) FORECAST SHEET Acts like an investment monitoring radar screen across our investee Cos and alternate opportunities in the market 4) Track portfolio as per risk management guidelines 5) Target valuations to rebalance portfolio
Market Cap Key Ratios Qualitative aspects Thematic views
Risk Management
The investment team strictly follows a well designed, dynamic and prudent risk management policy to mitigate the inherent risk in equities Comprehensive risk management comprises:
Flexibility to deploy the total portfolio in cash for downside protection
Diversification and liquidity management

Adherence to stringent exposure limits on sectors, business groups and individual companies Regular monitoring to ensure compliance with risk management guidelines No use of derivatives / leverage trades Third party independent assurance of activities, processes and controls
The India Story Down But Not Out
India Remains On The Economic Growth Path

1990 GDP Average GDP Growth Market Cap USD Bn % USD Bn 313 5.6 27 2000 461 5.6 209 2010 1,380 7.3 1,372 2012 1,750* 6.5* 1,131
BSE Sensex
Global Trade Import Export Foreign Exchange Reserves Population Working Age Population INR / USD
Source: Bloomberg, IMF, Business Beacon, ENAM Research * 2012 Estimates
Index
781
5,001
17,528
17,404
USD Bn USD Bn USD Bn Mn % INR
21 17 6 838 58 18.1
50 37 38 1,006 61 46.7
278 176 277 1,173 64 44.7
397* 286* 295 1,210* 65* 50.9
Data as of financial year ending 31st March, 2012
India took more than 60 years to cross a GDP of USD 1Trn By end of this decade, Indias GDP may rise over USD 6 Trn
Rapid Growth Across Key Industries

Growth 100 Most Profitable Companies Aggregate Profits of 100 most profitable companies (INR bn.)
6000 5000 4000 3000 2000 1000
Software Exports (INR bn.)

3,500 3,346
5138
3,000
2,500
2,000 1,500
30% CAGR
1981 332 861
1,000
500 0 109
0
FY99 FY04 FY09 FY14(e)
Telecom Subscriber Growth
Airline Industry Growth
Source: ENAM Research

(Source: AAI, DGCA)
India To Emerge As One Of The Largest Economies

GDP of key countries (USD Trn) 2000
1 2
2010-30 Estimated GDP growth (%) 2020 (e) 14.6 5.7 China US 23.2
India
China
9.3
7.0
2010 9.6 4.7 US China
US Japan
2.8
1.7
1.7
1.2
1.2
France
3
4 5 6 7 8 9 10
Germany
UK France China Italy Canada Brazil Mexico India
1.9
1.4 1.3 1.2 1.1 0.7 0.6 0.6 0.5
Japan
Germany France UK Italy Brazil Canada Russia India
5.4
3.3 2.6 2.3 2.0 2.0 1.6 1.5 1.4
Japan
India Germany Brazil Russia UK France Canada
6.8
6.5 4.6 4.3 3.8 3.6 3.6 2.7
16.0 12.0 8.0 4.0 0.0 (4.0) (8.0)
India: Resilient to external shocks

GDP (Y-o-Y %)
USA GDP Brazil GDP China GDP India GDP
Mar-99
Germany
Japan
Italy
Mar-12
Mar-10 Mar-11
Mar-98
Mar-00
Mar-01
Mar-02
US
Mar-03
23.0
Mar-04
Mar-05
Mar-06
Mar-07
Mar-08
Source: ENAM, Bloomberg Source: Standard Chartered, Citigroup
Improvements in infrastructure, deregulation and education could allow India to grow rapidly for decades
Mar-09
Market Capitalization Will Reflect The Size And Growth

Population
Mn
GDP
USD Bn
GDP / Capita
USD (PPP)
Market Cap
USD Bn
MKT / GDP
Developed
US Canada UK Germany France Japan Italy Brazil China India* 311 34 62 82 66 128 61 191 1,341 1,210 14,587 1,577 2,249 3,281 2,560 5,459 2,051 2,088 5,927 1,750** 48,387 40,541 36,090 37,897 35,156 34,740 30,464 11,769 8,382 3,694** 11,661 1,894 3,034 1,239 1,412 3,502 460 1,195 3,131 1,131 0.8 1.2 1.3 0.4 0.6 0.6 0.2 0.6 0.5 0.7
Market cap could grow

Source: Bloomberg, IMF, EAMC, as on 31 Dec 2011 India Data as of 31 Mar 2012 ** 2012 Estimates
over USD 4 Trn by 2020
India - Long-term Pillars Of Growth

SAVINGS
CONSUMPTION
INFRASTRUCTURE
Savings: Favourable demographics, rising urbanization and higher income levels are likely to boost Indias savings pool to ~USD 1.4 Trn by 2020 (~todays GDP), of which financial savings corpus is likely to be ~USD 540 Bn This will form the bulwark of discretionary consumption and also fund infra creation A bulk of Indias savings come from households rather than corporates, making it a stable source of funds
Consumption J-Curve: Indias already sizeable domestic consumption will take off in ~201520 as demographics result in the figure of 50:40 for dependency : working pop, as it did for the US in the 60s & China in the 90s
Infra & Capex: India is putting up a massive across-the board Core Infra backbone with an overall investment of ~USD 1 Trn over the next five years Power, roads, ports, airports etc will be the key segments that will witness explosive growth
In sharp contrast to major economies which have long term issues to be addressed, Indias issues are more immediate term, with structural pillars in place
Indian Households Are Wealthy

GDP growth, savings and investment rate Urban housing stock ~$ 5 trn
Source: Bloomberg, ENAM Research
Gold: 19,000 tons (approx.) = ~ $1 trn

2100 1800 1500 1200 900 600 300 0 c (USD/troy ounce)
1.4 1.2 1.0 0.8 0.6 0.4 0.2 0.0
Indians holding ~$ 1 trn in Deposits

(USD trn)
Jan-01
Jan-02
Jan-03
Jan-04
Jan-05
Jan-06
Jan-07
Jan-08
Jan-09
Jan-10
Jan-11
FY01
FY02
FY03
FY04
FY05
FY06
FY07
FY08
FY09
FY10
Source: RBI
Indian citizens have witnessed a generational wealth effect

FY11
Consumption
MULTIPLE SECTORS SET FOR HIGH GROWTH
2010: Low penetration (mortgages as a % of GDP)
Consumption boom across categories Industry

Organized Retail Home Mortgage
100 75 50 25 0
(%)
80
86 93
Units
US$ bn US$ bn mn p.a. mn subs mn p.a. US$ bn
2010
24 91 3 24 6 22
2020(e)
266 646 18 116 25 89
CAGR(%)
27 22 20 17 16 15
7
India
12
17
32 26 29
39 41
48
Air Conditioners Digital Pay TV Refrigerators Packed Foods
Two-Wheelers
mn p.a.
US$ bn
9
10
35
34
14
13
Thailand
Taiwan
Singapore
Denmark
Germany
China
Malaysia
Korea
HK
USA
UK
HPC Products
Consistent economic growth to be followed by consumption boom

Infrastructure Opportunity Is Equally Large

India is visibly under-invested in infrastructure USD 1 Trn investment required by 2017 of which over 50% expected from private sector Infrastructure spend is barely 5% of GDP (incl. Energy, Telecom, Power, Transport) vs. approx. 12% in China
Government plans to increase infrastructure spend to 11% of GDP in FY17
11th Plan Sectoral Funding Break-Up

Electricity Roads & Bridges Telecom Railways Irrigation Water Supply & Sanitation Ports Airports Storage Oil & Gas Pipeline
12th Plan Total USD Bn

310 170 138 108 108 113 45 23 10 5
Total USD Bn
165 70 88 50 63 28 10 10 3 33
% of total invt.
32% 14% 17% 10% 12% 5% 2% 2% 0.4% 6%
% of total invt.
30% 17% 13% 11% 11% 11% 4% 2% 1% 1%
300 250 200 150 100 50 0 155 178 203 230 9.0% 9.5% 10.3% 9.9%
10.7%
11.0% 10.5% 10.0% 9.5% 9.0%
260
8.5% 8.0%
2012-13 2013-14 2014-15 2015-16 2016-17 Total Infra Investment (USD Bn) Infra Investment as % of GDP
Total Infra Investment
513
100%
1,025
100%
Unique opportunity to own annuity assets in a reflating economy

Indians & Corporates Are OK But Not The Government

Households Steady
Gross Dom savings = $340bn

India Inc. Resilient

Corporates

Government Under Stress

Fiscal Def = ~$100bn
On B/S: Interest: $60 bn Subsidies: ~$35bn
Household Savings: $230bn Low leverage Wealth effect: Property Stocks Gold
Corporate profits ~$80bn High RoE Competitiveness Low leverage Earnings slowing, but not at precipice unlike developed world
WAY OUT
Asset sales & Collections
Telecom: Spectrum auction Coal auctions Disinvestment of PSUs Land bank unlocking (ie land etc) Railways, LIC etc Higher Tax/ GDP collections GST, DTC NELP VIII/ KG Basin Gas profit share
The deficit of the government can be funded with proactive asset sales
But Government Is Not Bankrupt

Government Has a Large Asset Bank which can be Unlocked Government Debt as % of GDP
Prime Land in Cities
Abundant Natural Resources: Coal (fourth-largest reserves in the world), Iron ore, Manganese, Mica, Bauxite, Titanium ore, Chromite, Natural gas, Diamonds, Petroleum, Limestone and Thorium (world's largest along Kerala's shores) Investments in Public Sector Companies and Undertakings Disinvestments Official Gold Reserves 615 Tonnes ~ $36Bn
Indias tax incidence is the lowest among its EM peers Increase leads to
additional revenue
Iron Ore - Reserves
% Disinvestment from PSU (USD Bn)
Governments hidden weapons in a fight for liquidity

Enam / Asset Management / India Fundamental Equities Platform / EIP / - 18 Source: ENAM Research
Outlook
Positives Building Up
12.0 10.0 8.0 6.0 4.0 2.0
10.0 9.0
8.0 7.0 6.0 5.0 4.0 3.0 2.0
(2.0)
1.0 0.0
Feb-10
Nov-10
Nov-06
Nov-07
Nov-08
Nov-09
Nov-11
Feb-07
Feb-08
Feb-09
Feb-11
Aug-06
Aug-07
Aug-08
Aug-09
Aug-10
May-06
May-07
May-08
May-09
May-10
May-11
Aug-11
Feb-12
India WPI (RHS)

Source: Bloomberg
Repo Rate
Inflation Cooling Off Will Lead to Further Interest Rate Cuts

May-12
CAD Likely to Shrink in FY 13
M ar-13e ( USD bn) Exports Imports o/w Oil imports o/w Non oil imports Trade balanc e ( I) Trade balance/GDP (%) Invisibles ( net) ( II) o/w Software o/w Remittances Current ac c ount ( I+II=A) CAD/G DP ( %) Foreign investment FDI FII Banking capital NRI deposits ECBs+supplier's credit etc Rupee debt service Other capital account items Capital ac c ount ( B) % of GDP Overall balanc e ( A+B)
CAD, ex-Gold is Not Worrisome

Oil @ 110 342 535 146 389 ( 193) (10) 124 54 70 ( 69) ( 3.4) 23 12 15 8 23 (1) 6 79 4 10 Oil @ 120 345 549 159 389 ( 204) (10) 130 58 72 ( 74) ( 3.7) 25 14 16 8 21 (1) 6 82 4 8
Oil @ 100 340 521 132 389 ( 181) (9) 120 52 68 ( 61) ( 3.1) 20 12 12 5 24 (1) 5 72 4 11
INR depreciation is a positive for exports Reduction of gold imports by ~25% YoY, can shave off ~USD 12 bn from the import bill (at current gold prices) USD 10/bbl correction in oil prices will shave off ~USD 14 bn from the import bill
Crude oil + Gold account for ~44% of total imports. Any correction in the quantum of these could reduce the strain on CAD significantly
Commodities Showing Signs of Softening
600 550 500 CRB Comm Index
450
400 350 300 250 Aug-06 Aug-07 Aug-08 Aug-09 Aug-10 May-06 May-07 May-08 May-09 May-10 May-11 Aug-11 May-12
Mar-11 Feb-12 Mar-12
Feb-07
Feb-08
Feb-09
Feb-10
Feb-11
Nov-06
Nov-07
Nov-08
Nov-09
Nov-10
World Oil Demand (mbpd)

47 46 46.3 46.4 45.5 44.5 Mar-11
World Oil Supply (mbpd)

60 50 40 30 20 34.8 37.4 37.5
51
51
51
45
44 43 42 41 40 OECD 42.5
43.2
Feb-12 Mar-12
10
0 Non-OECD OPEC Non-OPEC
Global slowdown leads to softening of commodity prices

Source: Bloomberg
Nov-11
Feb-12
Valuations At Multi-Year Lows

OFFERS GOLDEN OPPORTUNITY TO PARTICIPATE IN THE INDIASTORY
Sensex FY16E
P/E 17: @ 41,508 (26.9% CAGR) P/E 15: @ 36,625 (23.0% CAGR) P/E 13: @ 31,685 (18.6% CAGR)
Source: Bloomberg
Markets at Attractive Levels Long Term Story of India is Intact

Disparity Across Sectors

Industry
FY-13 Fwd. P/E

26 22
FMCG Food Beverage & Tobacco
Pharma & Bio-Technology May 2012 P/E 11.80 Software Services Telecommunication
19 15 12
Capital Goods Automobiles & Components

Energy
11 9
9
Wide Disparity across sectorsSeveral sectors at historic lows

Value Investing
DIFFERENT PHASES OF A MARKET CYCLE
4: Bubble 2-3: Fair to Over valuation

1: Undervaluation

Asset & Cost inflation Capex/ IPO/ Credit cycle revives Boom spreads, initially earnings driven (phase 2), later multiples-driven (ph 3)
P/E expansion, Easy credit New Themes and Valuation Paradigms Virility Symbols (Towers, diversification/ M&A) Capex > near-future requirements Retail & IPO euphoria Shock/ Leaders in trouble We are here
6: Bear Phase 5: Correction & Bear rally
Easy & cheap Liquidity Value buying Catalysts: Regulatory, Commodities
Leading stocks fall sharply, followed by pull back as Left outers jump in & earnings still growing Leadership narrows Profits OK, but P/E falls Sharp, swift, short-lived no-reason rallies
Earnings crack Tight money demand & EPS fall
Bust
Easy credit to revive growth
Phase 0
Phase 1
Phase 2
Phase 3
Phase 4
Phase 5
Phase 6
Phase 0
Value Outperforms Growth

Source: Marc Faber, ENAM
Growth Outperforms Value
Value and Growth on par
Value Outperforms Growth
Value and Growth Investment styles change leadership during different phases of market cycles
Investor Psychology Cycle

EUPHORIA
DENIAL
OPTIMISM
DESPAIR
HOPE
REINFORCEMENT FATIGUED EXIT
CONVICTION
FEAR
PANIC
Source: ENAM
Bull markets are born on pessimism, grown on skepticism, mature on optimism and die on euphoria. The time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell. Sir John Templeton
Challenges remain
Political uncertainty and regional differences Governance and Corruption Fiscal situation
High Interest rates

Crude oil prices Shortage of skilled manpower (NREGA) Uncertainty in EU & Reversal of Globalisation Geopolitical Risk
Key Reforms - Not Now But Not Never

Reforms
Curbing Expenditure
Efficiency
Attracting Foreign Investment in
UID Size of Govt. staff Subsidy reforms: Fuel & Fertilizers
Land Acquisition Act SEB reforms GST Education
Energy Mining Organized Retail Infrastructure
A positive surprise on Reforms could spur growth, inward flows , currency & markets
ENAM OUTLOOK : 2012-13

India still remains one of the fastest growing economies in the world and a very favourable long-term investment destination Indias problems are more internal than external Inflation should ease due to softening of commodity prices Interest rates are still high but expect RBI to steadily reduce the same While urban India is witnessing some challenges, rural India continues to boom There could be positive surprises on the political front
Market valuations witnessing huge disparity across sectors which offer immense
opportunity With a few favourable changes market could cross its previous peak by March 2013
Market Cycles
The First Market Cycle Of Our Generation: 88 - 91

4,500 4,000
Bofors scandal breaks out
India forced to pledge gold
Gulf war I
Politics: 4 PMs in 4 years!, India forced to liberalize in 91
3,500
INR: BoP crisis as CAD rose to ~3%. India forced to pledge gold. INR depreciated by 11% pa from 88 to 91 to reach Rs 20
Inflation: High teen Primary & Fuel inflation Interest rates: Thus, market interest rates at >20% The bull market of 1991-92 was against the backdrop of the Gulf war, liberalisation (incl. INR devaluation from Rs 20 to 29), culminating in the market scam
3,000
2,500
2,000
1,500
1,000
500
Sx returns: INR: 79% / $: 49% GDP: 10.1%
Sx returns: INR: 9%/ $: -0.3%

GDP: 6.1%
Sx returns: INR: 50% / $: 31% GDP: 5.3%
Sx returns: INR: 267% / $: 150% GDP: 1 .4%
0 Apr-88 Apr-89 Apr-90 Apr-91
Source: Bloomberg; ENAM Research Enam / Asset Management / India Fundamental Equities Platform / EIP / - 31 -
Sensex In Rollercoaster: 1996 - 99

6,000
S.E Asian crisis Politics: Coalition politics at its worst: 3 PMs in 3 yrs

International sanctions
5,500
Global: SE Asian crisis & Russian debt default vitiate global flows INR: Depreciates sharply from Rs 36 to 42 as international sanctions imposed post Indias peaceful nuke tests
5,000
Inflation: Subdued (4-5%)

Interest rates: Thus, PLR fell from 16.5% in 96 to 13% by 99 Fiscal deficit: Jumps sharply from ~4% in 96 to >6% of GDP by 99
4,500
4,000
3,500
3,000
Sx returns: INR: -0.2% / $: -5% Sx returns: INR: 16% / $: 5% GDP: 4.3% Sx returns: INR: -4% / $: -11% GDP: 6.7%
2,500
GDP: 7.9%
Apr-96
Apr-97
Apr-98
Source: Bloomberg; ENAM Research Enam / Asset Management / India Fundamental Equities Platform / EIP / - 32 -
Sensex: The SADIM* Touch: 2000 - 03

8,000
9/11
Gulf war II
Politics: Finally, a stable govt!
7,000
Global: TMT bubble bursts, 9/11, Gulf war II

INR: Orderly depreciation from ~44 to 47 through 2003 Inflation: Remained ~6% despite two severe droughts in 2001-03. Fuel prices jumped 20% as global oil prices nearly doubled to $28/ bbl Interest rates: PLRs dropped to lowest levels of ~10% as policy rates fell, laying the foundations of the biggest bull run
6,000
5,000
4,000
3,000
Sx returns - INR: -21% / $: -26% GDP FY01: 4.3% Sx returns - INR: -18% / $: -21% GDP FY02: 5.5% Sx returns - INR: 4% / $: 4% GDP FY03: 3.9%
2,000 Jan-00
Source: Bloomberg; ENAM Research
Jan-01
Jan-02
Jan-03
* whatever you touch turns to shit (except PSUs & HDFC gp)
Sensex: The MIDAS Touch: 2004 - 07

PM: Dr. Manmohan Singh
21,000
Politics: Surprise victory of Congress
16,000
Global: Cheap Liquidity and housing bubble in Western Economies

INR: Strengthening of rupee from 44 to 39.80 Inflation: Dropped below ~5%. Global oil prices nearly doubled to $80/ bbl
11,000
6,000
Sx returns - INR: 16% / $: 16% GDP FY05: 7%
Sx returns - INR: 74% / $: 70% GDP FY06: 9.5%
Sx returns* - INR: 60% / $: 77% GDP FY08: 9.3%
1,000 Apr-04 Apr-05 Apr-06 Apr-07

Jan-08
Source: Bloomberg; ENAM Research; Note: *From April 07 to
8th
Jan 2008
Sensex: Financial Crisis: 2008 - 12

PM: Dr. Manmohan Singh
21,000
16,000
11,000
Politics: Congress retains the house in the second term with a coalition government Global: Lehman Crisis, American Housing bubble crash, EU Crisis INR: Global uncertainty and strengthening of US $ pulled INR down to 55 from 44 Inflation: Double digit inflation and high interest rates

6,000
Sx returns - INR: -38% / $: -51% GDP FY09: 6.7%

1,000 Mar-08
Source: Bloomberg; ENAM Research

Mar-10
Sx returns - INR: -11% / $: -22% GDP FY12: 6.5%
Mar-09
Mar-11
Mar-12
Portfolio Strategy
This document is provided for informational purposes and is not intended as an offer to sell or solicitation of an offer to buy securities or other instruments. The information contained herein is based on our assumptions and can be changed without any prior intimation. This information must not alone be taken as the basis for an investment decision. Please consult your financial, legal or tax advisors. Investment in securities is risky and there is no assurance of returns or preservation of capital. Neither the firm, nor its directors, employees, agents or representatives shall be liable for any damages whether direct or indirect, incidental, special or consequential including lost capital, lost revenue or lost profits that may arise from or in connection with the use of this information. No part of this material may be copied or duplicated or redistributed without prior written consent.
Our Investment Strategy

2012 - 2013 Adopt a conservative approach
Focus on risk adjusted returns

Invest in businesses driven by Free Cash Flows, Secular growth, Consumption and increasing Globalisation
Long-term profit trend-line is very important

Conservative promoters with sound business models Identify stocks with a high probability of re-rating
Monitor macro dynamics, respond quickly to the new environment and fine tune the
investment strategy accordingly
Portfolio Positioning
EMERGING INDIA PORTFOLIO (EIP)
Portfolio Breakdown (%)
2.8
2.6
2.5
Consumption Global
21.7 38.6
Secular Growth Infrastructure
Diversified& Others
Cash
31.7
Portfolio Summary
2012 2013 Domestic macro issues, more than global issues, are impacting our markets We now see signs of the economy bottoming out
Our investment strategy has been designed to reduce volatility in the portfolio
The focus of our strategy is to minimize earnings cyclicality with a greater focus on risk-adjusted returns to improve the overall performance of the portfolio Current portfolio positions include growth and value stocks across sectors, offering superior returns All portfolio positions undergo a strict evaluation process and constant monitoring Objective is to deliver superior returns on a risk adjusted basis
Portfolio Performance
This document is provided for informational purposes and is not intended as an offer to sell or solicitation of an offer to buy securities or other instruments. The information contained herein is based on our assumptions and can be changed without any prior intimation. This information must not alone be taken as the basis for an investment decision. Please consult your financial, legal or tax advisors. Investment in securities is risky and there is no assurance of returns or preservation of capital. Neither the firm, nor its directors, employees, agents or representatives shall be liable for any damages whether direct or indirect, incidental, special or consequential including lost capital, lost revenue or lost profits that may arise from or in connection with the use of this information. No part of this material may be copied or duplicated or redistributed without prior written consent.
Portfolio performance
06 Oct-10
31 May-12 84.1*
Portfolio Value - Unit NAV (Representative)

Portfolio: EIP CAGR: Portfolio return Index: S&P CNX 500 CAGR Index return Index: BSE Midcap CAGR Index return Alpha vs. S&P CNX 500 CAGR Alpha vs. BSE Midcap CAGR
100.0
(9.8) 5,091.1 3,913.1 (14.6) 5,907.9 (19.2)
8,426.5
4.8
9.3
* Source: Anand Rathi PWM
Portfolio performance since inception

Emerging India Portfolio (Performance Since Inception)
105 100 95 90
86.9 99.8 96.1 97.1 90.9 89.6 84.1 82.8 96.6
85 80 75 70 65 60
92.6 76.9 82.1 70.1 74.7
81.6
EIP Aggr NAV
CNX500
BSE Midcap
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ENAM ASSET MANAGEMENT

Portfolio Update Emerging India Portfolio (EIP)

Fundamental Equities Platform

ENAM ASSET MANAGEMENT

ENAM Fundamental Equities Platform

ENAM Fundamental Equities Platform

Quality and sustainability of growth

Predictability, adaptability, resilience

Orientation towards minority

Incremental improvements can generate disproportionate returns

Being part of a herd never helped anybody

Enam / Asset Management / India Fundamental Equities Platform / EIP / - 4 -

ENAM Fundamental Equities Platform

S&P CNX 500, other select ideas

Prospective Investment Universe

Investment Universe Research & Analysis Idea Generation

Over 250 companies

40-50 stocks ~25 stocks

ENAM Investment Universe

Portfolio Construction, Risk Management & Monitoring

Enam / Asset Management / India Fundamental Equities Platform / EIP / - 5 -

ENAM Fundamental Equities Platform

DETAILED FINANCIAL ANALYSIS In-depth Analysis

IDEA GENERATION & PORTFOLIO CONSTRUCTION High Conviction Investments

PORTFOLIO REVIEW Tracking existing investments

Market Cap Key Ratios Qualitative aspects Thematic views

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Diversification and liquidity management

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ENAM ASSET MANAGEMENT

The India Story Down But Not Out

India Remains On The Economic Growth Path

USD Bn USD Bn USD Bn Mn % INR

278 176 277 1,173 64 44.7

397* 286* 295 1,210* 65* 50.9

Data as of financial year ending 31st March, 2012

Rapid Growth Across Key Industries

Software Exports (INR bn.)

1981 332 861

Telecom Subscriber Growth

Airline Industry Growth

Source: ENAM Research

(Source: AAI, DGCA)

India To Emerge As One Of The Largest Economies

2010 9.6 4.7 US China

India: Resilient to external shocks

Source: ENAM, Bloomberg Source: Standard Chartered, Citigroup

Market Capitalization Will Reflect The Size And Growth

Market cap could grow

over USD 4 Trn by 2020

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India - Long-term Pillars Of Growth

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Indian Households Are Wealthy

Source: Bloomberg, ENAM Research

Gold: 19,000 tons (approx.) = ~ $1 trn

Indians holding ~$ 1 trn in Deposits

Source: ENAM Research

Indian citizens have witnessed a generational wealth effect

2010: Low penetration (mortgages as a % of GDP)

Consumption boom across categories Industry

Air Conditioners Digital Pay TV Refrigerators Packed Foods

Source: ENAM Research