Bharat Consumption Fund - ICICI Prudential - ICICI ...
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Turn spending into
wealth creation
opportunities.
Aim to benefit from India’s
Business to Consumer growth story.
ICICI Prudential NFO period:
Mar 26, 2019 - Apr 9, 2019
Bharat Consumption Fund
The stocks/sectors mentioned in this presentation do not constitute any recommendation of the same and ICICI Prudential Mutual Fund may or may not have any future
position in these stocks/sectors.
India: One of the fastest growing large economies
9
• India is the largest democracy in the world
8 and second most populous nation.
7
• It is sixth largest economy, with a GDP of
6 $2.6 trillion in 2017.
5 2017
2018E
4
2019E
3
2020E
2
1
0
Brazil Canada China France Germany India Japan United United European World
Kingdom States Union
Data as on Oct 2018. Source: IMF, World economic outlook (2018), E: estimates. Past performance may or may not be sustained in the future.
India: New Growth Engine of the World
• India, one of the fastest growing
large economy.
• Key feature of growth acceleration
in 2000s was the sharp decline in
inflation from 8-10% to 4-6%
during 2000s.
• Another notable feature is low
standard deviation in GDP growth
in recent time
Source: IIFL Institutional equities, Jan 2019, CSO, CEIC
India: Quality, Quantity and Quantum in Place
• In last two decades India’s per
capita GDP has grown ~6.5x.
• India’s per capita GDP growth was
also one of the fastest among
large EMs.
• Per capita GDP growth of China
continued to outpace that of India,
the gap narrowed in last decade.
Source: IIFL Institutional equities, Jan 2019, CSO, CEIC. EM: Emerging Markets
India: Pvt Consumption is growing faster than GDP • Ex-food private consumption growth has seen higher growth in last decade. • Marginal propensity to consume food tends to decline as income level increase. • Low interest rates, consumer credit has supported the rapid growth in domestic consumption. Source: IIFL Institutional equities, Jan 2019, CSO, CEIC. PFCE: Private Final Consumption Growth
India: Changing Trends in Saving and Borrowing Saving Rate in household witnessed declining trend Personal Loans have driven credit in recent times • Household savings in India have fallen from a high of ~25% in FY10 to ~17% in FY18. • Personal bank credit growth has increased at an average of ~17% YoY in last 5 years Source: IIFL Institutional equities, Jan 2019, CSO, CEIC, Graph for household saving rate is updated till FY 17
India: Changing Trends in Saving and Borrowing
Personal credit growth has been stable Household consumption has been growing
faster than disposable income
• Benign Credit environment has helped consumption growth to outpace disposable income growth.
Source: IIFL Institutional equities, Jan 2019, CSO, CEIC, * FY 19 data is for period of April – December
Global Comparison: GDP Per Capita Crosses USD 2000
Globally, it has been observed that the moment a country’s per capita GDP crosses
USD 2,000, there is a disproportionate rise in discretionary spending.
South
China Russia Brazil Korea Singapore India’s per
capita GDP is
Year when GDP 2006 2001 1986 1983 1973 expected to
crossed the cross the
USD 2000 mark milestone in
2019-20.
Rise in Consumption 2.6 x 3.2 x 2.3 x 1.9 x 1.6 x
Expenditure in Next
5 Years
Source: All the content are sourced from Edel Research, CEIC
Changing Trend
Changing Needs and Wants Changing Family Structures
1980-2017
The proportion of nuclear households is
projected to increase to 74% by 2025F.
F: Forecast. BCG Report Mar 2017Drivers of consumption
Income Diverse Technology
Urbanization
Growth Population Advancement
Rising Income and Diverse Population In last decade Connected India, with
expansion of the within the India may urbanization has seen more than 1 billion
middle-income segment drive consumption significant growth. internet users, will have
may fuel future growth. Rural and urban India’s urbanization rate more informed
consumption growth divide may diminish is expected to improve consumers.
significantly to 40% by 2030 from the
current 31%.
Source: WEF, Jan 2019, CTI Research
The stocks/sectors mentioned in this Presentation is only for illustration purpose only. The stocks mentioned herein are a part of the scheme benchmark i.e Nifty India
Consumption Index. The sector(s)/stock(s) mentioned in this presentation do not constitute any recommendation of the same and ICICI Prudential Mutual Fund may or may not
have any future position in these sector(s)/stock(s).The portfolio of the scheme is subject to changes within the provisions of the Scheme Information document of the scheme.
Please refer to the SID for investment pattern, strategy and risk factors.Millennial: Redefining India’s Consumption Story • In India, the population of individuals born between 1980 and Millennial forms 35% of India’s population 2000 is 450 mn, which is one of the highest in the world. • With largest millennial population globally, India offers a growth potential for consumer markets and retailers. • Millennials have grown up in an increasing urbanized India with a healthy economic environment. • Differ from previous generations by their lifestyle choices, consumption pattern, significant need for convenience and brand preferences. Source: Elara Capital Report, March 2018. Deloitte Feb 2018
Changing Lifestyle Redefining Consumption
Rising Aspirations Fuelling Growth
Eat
Well FMCG Retail QSR Healthcare
The stocks/sectors mentioned in this
Feel Consumer Telecom Media & Auto Presentation is only for illustration purpose only.
Well Durable Entertainment The stocks mentioned herein are a part of the
scheme benchmark i.e Nifty India Consumption
Index. The sector(s)/stock(s) mentioned in this
presentation do not constitute any
recommendation of the same and ICICI
Prudential Mutual Fund may or may not have
any future position in these sector(s)/stock(s).
The portfolio of the scheme is subject to
changes within the provisions of the Scheme
Live Consumer Paints Tourism
Information document of the scheme. Please
refer to the SID for investment pattern, strategy
Well Electricals
and risk factors.Hierarchy of Consumption
High
Extent of Discretionary
4 - Wheelers
Travel &
Eating Out
Recreation
Mid
Paints
2 - Wheelers
Consumer
Durable
Low
Apparel and Education
FMCG Footwear Healthcare
Low Ticket Low-mid Ticket Upper-mid Ticket High Ticket
Consumption
Source: Jefferies, Mar 2019
The stocks/sectors mentioned in this Presentation is only for illustration purpose only. The stocks mentioned herein are a part of the scheme benchmark i.e Nifty India
Consumption Index. The sector(s)/stock(s) mentioned in this presentation do not constitute any recommendation of the same and ICICI Prudential Mutual Fund may or may not
have any future position in these sector(s)/stock(s).The portfolio of the scheme is subject to changes within the provisions of the Scheme Information document of the scheme.
Please refer to the SID for investment pattern, strategy and risk factors.Play according to the cycle: Impact of Macros on
Various Consumer Segments
GDP Crude Interest Rate
Mixed, reacts positively
FMCG Mild Positive on sharp falls Very Low Correlation
Apparel and
Footwear Positive Mild Negative Very Low Correlation
Consumer Segment
Eating Out Positive Mild Negative Very Low Correlation
Paints Mild Positive Mixed, reacts positively Low Correlation
in sharp fall
Consumer Mild Negatively
High Positive Mild Negative
Durable correlated
Mild Positive, Inversely correlated on
2 - Wheelers Higher than FMCG Highly Negative sharp movements
Inversely correlated on
4 - Wheelers High Positive Highly Negative
sharp movements
Source: Jefferies, Mar 2019
The stocks/sectors mentioned in this Presentation is only for illustration purpose only. The stocks mentioned herein are a part of the scheme benchmark i.e Nifty India
Consumption Index. The sector(s)/stock(s) mentioned in this presentation do not constitute any recommendation of the same and ICICI Prudential Mutual Fund may or may not
have any future position in these sector(s)/stock(s).The portfolio of the scheme is subject to changes within the provisions of the Scheme Information document of the scheme.
Please refer to the SID for investment pattern, strategy and risk factors.Consumer Non-Durable Demand largely stable: • Aggregate sales for the sector grew at 12.2%, with last 3 quarters’ average growth at 11.2% • Companies took price increases in 2Q, with rise in crude oil prices. Revenue Growth for the sector • Key Drivers for Growth in top line of FMCG companies are • New Product Launches • Premiumisation of products. • Increased reach in rural areas. • Un-organised to organised shift. • Recent budgetary announcement to support rural income will be positive for staples. • The measures in direct tax may aid urban lower ticket discretionary demand. Source: IIFL, Feb 2019, Jefferies Feb 2019. The stocks/sectors mentioned in this Presentation is only for illustration purpose only. The stocks mentioned herein are a part of the scheme benchmark i.e Nifty India Consumption Index. The sector(s)/stock(s) mentioned in this presentation do not constitute any recommendation of the same and ICICI Prudential Mutual Fund may or may not have any future position in these sector(s)/stock(s).The portfolio of the scheme is subject to changes within the provisions of the Scheme Information document of the scheme. Please refer to the SID for investment pattern, strategy and risk factors.
Paint • Indian Paint industry is characterised by low per capita paint consumption vs global average : 3.75kg vs. global average of 12-15kg. • Industry size in FY17 was INR470 bn, It is expected to grow at 15% CAGR in value and 10% in volume terms. • 60% of the industry is organized, 40% is unorganized Industry growth drivers – • Change in culture tending towards nuclear families • Easy availability of home loans at affordable rates • Government driven housing schemes • Increasing disposable incomes • Aspiration to live in better homes Source: Jefferies Mar 2019, Internal The stocks/sectors mentioned in this Presentation is only for illustration purpose only. The stocks mentioned herein are a part of the scheme benchmark i.e Nifty India Consumption Index. The sector(s)/stock(s) mentioned in this presentation do not constitute any recommendation of the same and ICICI Prudential Mutual Fund may or may not have any future position in these sector(s)/stock(s).The portfolio of the scheme is subject to changes within the provisions of the Scheme Information document of the scheme. Please refer to the SID for investment pattern, strategy and risk factors.
Consumer Electricals
• Rise in disposable income, Government’s initiative on rural electrification and easy financing options are driving
growth in consumer electrical segment.
• Improvement in availability and the quality of power in existing and new areas is expected to drive demand.
• Sales of categories such as bulbs and fans increases proportionately to an increase in electrification. Sales of TVs,
induction cooktops, home appliances, and other household devices, generally follows.
White Goods Sales Consumer Durable Penetration
89%
85%
70%
60%
30%
20%
10%
4%
Refrigerator Room AC Washing Machine FPD TV
India Global
Source: JM Financial April 2018. Annual Report of Amber Enterprises Ltd, Jefferies Mar 2019.
The stocks/sectors mentioned in this Presentation is only for illustration purpose only. The stocks mentioned herein are a part of the scheme benchmark i.e Nifty India
Consumption Index. The sector(s)/stock(s) mentioned in this presentation do not constitute any recommendation of the same and ICICI Prudential Mutual Fund may or may not
have any future position in these sector(s)/stock(s).The portfolio of the scheme is subject to changes within the provisions of the Scheme Information document of the scheme.
Please refer to the SID for investment pattern, strategy and risk factors.Retail
• Europe and US comprise of ~11% of world population while their combined apparel consumption share is ~40%;
indicating very high per capita expenditure on apparel. This implies very large headroom for growth in per capita
apparel consumption in India
• Apparel market in India is expected to grow at CAGR of 9% from USD 51 billion in FY 17-18 to USD 65.8 billion.
• NSSO rural consumption survey has been showing continued trend towards more urban consumption pattern.
Overall (% of total sales)
Store 2
Store 10
Store 5
Store 6
Store 4
Store 7
Store 8
Store 9
Store 1
Store 3
Store 11
Source: AMP Jan 2019, Jefferies Mar 2019. Annual Report of Aditya Birla Fashion and Retail Ltd
The stocks/sectors mentioned in this Presentation is only for illustration purpose only. The stocks mentioned herein are a part of the scheme benchmark i.e Nifty India
Consumption Index. The sector(s)/stock(s) mentioned in this presentation do not constitute any recommendation of the same and ICICI Prudential Mutual Fund may or may not
have any future position in these sector(s)/stock(s).The portfolio of the scheme is subject to changes within the provisions of the Scheme Information document of the scheme.
Please refer to the SID for investment pattern, strategy and risk factors.
LF: Life Style, FF: Fast Fashion, LF: Lifestyle Fashion, VF: Value Fashion. NSSO: National Sample Survey OfficeWhy Now? Nifty India Consumption Index
Sector % Exposure Performance of Nifty India Consumption Index TRI vs Nifty 50 TRI
Consumer Goods 56.97
Nifty 50 Nifty India Consumption 17.8
Automobile 26.25 15.4
13.8 13.3 13.8 14.5 13.9
Telecom 5.58 11.210.6 11.1 11.3
9.0
Media & Entertainment 3.76 7.7
Services 2.45
1.7
Textiles 1.52
Energy 1.40
Healthcare Services 1.23 -4.8
-8.2
Pharma 0.83 6 Months 1 Year 2 Years 3 Years 5 Years 7 Years 8 Years 10 Years
Source: Sector Exposure data as on 28th Feb 2019, Performance as on 10th March 2019. www.nseindia.com. Past Performance may or may not sustain in future.
The stocks/sectors mentioned in this Presentation is only for illustration purpose only. The stocks mentioned herein are a part of the scheme benchmark i.e Nifty India
Consumption Index. The sector(s)/stock(s) mentioned in this presentation do not constitute any recommendation of the same and ICICI Prudential Mutual Fund may or may not
have any future position in these sector(s)/stock(s).The portfolio of the scheme is subject to changes within the provisions of the Scheme Information document of the scheme.
Please refer to the SID for investment pattern, strategy and risk factors.Broad theme: Sectors touching lives
Non-Discretionary
Expenditures Consumer
Pharma Heaalthcare Textile Power
Non Durable
Discretionary
Expenditures Consumer
Auto Paint Telecom
Hotel & Media
Durable Resorts
The stocks/sectors mentioned in this Presentation is only for illustration purpose only. The stocks mentioned herein are a part of the scheme benchmark i.e Nifty India
Consumption Index. The sector(s)/stock(s) mentioned in this presentation do not constitute any recommendation of the same and ICICI Prudential Mutual Fund may or may not
have any future position in these sector(s)/stock(s).The portfolio of the scheme is subject to changes within the provisions of the Scheme Information document of the scheme.
Please refer to the SID for investment pattern, strategy and risk factors.Aim to benefit from one of
the fastest growing
consumption markets
Invest in
NFO period:
ICICI Prudential Mar 26, 2019 - Apr 9, 2019
Bharat Consumption Fund Fund Managers*: Mr. Rajat Chandak
and Mr. Dharmesh Kakkad
(A open ended equity scheme following consumption theme)
* The overseas investments of the Scheme will be managed by Ms. Priyanka KhandelwalICICI Prudential Bharat Consumption Fund
(A Open Ended Equity Scheme following Consumption Theme)
NFO Period : March 26, 2019 to April 9, 2019
MICR cheques : Till end of business hours on 9th April 2019
RTGS and transfer cheques : Till end of business hours on 9th April 2019
Switches : Switches from equity schemes and other schemes - 9th April 2019;
Till cut off time (specified for switch outs in the source scheme)
Plans/Option : ICICI Prudential Bharat Consumption Fund - Growth & Dividend
ICICI Prudential Bharat Consumption Fund - Direct - Growth & Dividend
Exit Load : 1% of applicable Net Asset Value - If the amount, sought to be redeemed or switch
out is invested for a period of up to twelve months from the date of allotment; Nil
thereafter
Minimum Application Amount : Rs.5,000/- (plus in multiple of Re.1 thereafter)
SIP / STP / SWP : Available
Benchmark : Nifty India Consumption Index
Fund Managers* : Mr. Rajat Chandak and Mr. Dharmesh Kakkad
* The overseas investments of the Scheme will be managed by Ms. Priyanka KhandelwalRiskometer & Disclaimer ICICI Prudential Bharat Consumption Fund (An open ended equity scheme following consumption theme) is suitable for investors who are seeking*: • Long term wealth creation • An open ended equity scheme that aims to provide capital appreciation by investing in equity and equity related securities of companies engaged in consumption and consumption related activities. *Investors should consult their financial advisers if in doubt about whether the product is suitable for them. Investors understand that their principal will be at high risk All figures and data given in the document are dated unless stated otherwise. In the preparation of the material contained in this document, the AMC has used information that is publicly available, including information developed in-house. Some of the material used in the document may have been obtained from members/persons other than the AMC and/or its affiliates and which may have been made available to the AMC and/or to its affiliates. Information gathered and material used in this document is believed to be from reliable sources. The AMC however does not warrant the accuracy, reasonableness and / or completeness of any information. We have included statements / opinions / recommendations in this document, which contain words, or phrases such as “will”, “expect”, “should”, “believe” and similar expressions or variations of such expressions that are “forward looking statements”. Actual results may differ materially from those suggested by the forward looking statements due to risk or uncertainties associated with our expectations with respect to, but not limited to, exposure to market risks, general economic and political conditions in India and other countries globally, which have an impact on our services and / or investments, the monetary and interest policies of India, inflation, deflation, unanticipated turbulence in interest rates, foreign exchange rates, equity prices or other rates or prices etc. The AMC (including its affiliates), the Mutual Fund, the trust and any of its officers, directors, personnel and employees, shall not liable for any loss, damage of any nature, including but not limited to direct, indirect, punitive, special, exemplary, consequential, as also any loss of profit in any way arising from the use of this material in any manner. The recipient alone shall be fully responsible/are liable for any decision taken on this material. The sector(s)/stock(s) mentioned in this presentation do not constitute any recommendation of the same and ICICI Prudential Mutual Fund may or may not have any future position in these sector(s)/stock(s). Past performance may or may not be sustained in the future. The portfolio of the scheme is subject to changes within the provisions of the Scheme Information document of the scheme. Please refer to the SID for investment pattern, strategy and risk factors. Investors are advised to consult their own legal, tax and financial advisors to determine possible tax, legal and other financial implication or consequence of subscribing to the units of ICICI Prudential Mutual Fund. Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
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