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CEDAR LAKE ADVISORS LLP

INTRODUCTION

WHO WE ARE

We are an independent investment partnership within India registered


and regulated as an Authorized Person (AP) with the National Stock
Exchange of India and Bombay Stock Exchange under SEBI
framework(NSE/BSE AP Reg. No: AP0104460126327).
Cedar Lake currently runs an equity long/short prop fund to focus on
key sectors within the Indian economy.
The country is steadily coming out of a long recession as part of the
global recession cycle since 2008.
Recent electoral events in the country have lead to a rise in investor
sentiment and subsequent equity broad market indices.
However, the fundamental background of the Indian economy since the
past 12 months is a bit more muted and nuanced with some sectors
clearly outperforming others.

P/E Average

30
28
26
24
22
20
18
16
14
12
10

Source: National Stock Exchange

Large Cap equity markets indices above long term averages. Only a well
selected portfolio of reasonable valuations is likely to outperform the
broader market.

INDIAN ECONOMY AND VALUATIONS

P/E

11.5
11
10.5
10
9.5
9
8.5
8
7.5
Aug-14
14

Jul-14
14

Jun-14
14

May-14
14

Apr-14
14

Mar-14
14

Feb-14
14

Jan-14
14

Dec-13
13

Nov-13
13

Oct-13
13

Sep-13
13

Aug-13
13

Jul-13
13

Jun-13
13

May-13
13

Apr-13
13

Mar-13
13

Feb-13
13

Jan-13
13

Dec-12
12

Nov-12
12

Oct-12
12

Sep-12
12

Aug-12
12

Jul-12
12

Jun-12
12

May-12
12

Apr-12
12

Mar-12
12

Feb-12
12

Source: Reserve Bank of India

Inflation has started falling due to stronger check on credit flow and
better control on govt. finances especially the fiscal deficit.
Lower expenditure on non-essential rural guarantee schemes, combined
with higher exports has kept the deficit in check.
Reserve Bank of Indias recent inflation targeting has sent strong signal
within the markets on inflation expectations.

INDIAN ECONOMY AND VALUATIONS

Consumer Price Inflation Growth Rate YoY(%)

12.0
10.0
8.0
6.0
4.0
2.0
0.0
-2.0
-4.0
Source: Reserve Bank of India

Industrial Production Levels have started coming off decade lows for the
basic goods.
We expect that the RBIs strong stance on inflation control will keep raw
material prices in check in near and long term, thereby improving
industrial operating margins and RoE for cyclical and non-cyclical sectors.
However, our expectation is of a gradual recovery and not a sudden spurt
as the cyclicals come off a prolonged slowdown.

INDIAN ECONOMY AND VALUATIONS

Index of Industrial Production - Growth Rate YoY(%)

August
2.29%

September
10.98%

October
-11.46%

November
16.97%

After

commission and brokerage charges.


Portfolio
was started on 18th August, 2014.

The portfolio is managed by ex-Goldman Sachs Analyst with 7 years of


experience of corporate finance and quantitative asset management in
US and India.
We keep our portfolio low risk with focus on large market
capitalization and non-cyclical assets
Our holding period for each company in the portfolio is over 6 months
with a likely period of a year.
Consequently, we obtain returns by focusing on investing
opportunities with high and consistent operational performance.

PERFORMANCE FIGURES

Performance Table

3 year Profit Growth CAGR(%)

3 year average RoE(%)

80.00%
70.00%
60.00%
50.00%
40.00%
30.00%
20.00%
10.00%
0.00%
Min

Average

Max

Source: Company Financials

The average annual sales growth in the non-cylical portfolio assets has
been 24%.
The average annual profit growth in the portfolio assets has been 42%.
The average RoE for the portfolio is 39%.
The momentum of this abnormal growth is expected to continue due to
continued investment in expansion of product portfolio for the individual
companies and the strong domestic and export demand for their products.

INDIAN ECONOMY AND VALUATIONS

3 year Sales Growth CAGR(%)

THANK YOU

We will be happy to answer queries on the partnership and any related


questions. Please contact us at:
Email: puneet.mahajan@cedarlakecapital.com
Website: www.cedarlakecapital.com