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APRIL 2018 195Premium BankingAPRIL - JUNE 2018

Dear Customer,

We are starting off the new financial year after a good correction being witnessed in the markets over the last two months. At 36,400 levels on S&P BSE Sensex, the market valuations were seemingly stretched. Moreover, the Midcap and Smallcap indices’ valuations were further stretched and were trading at

significant premium to the large cap index. Since then the S&P BSE Sensex has corrected by ~10% and midcap and small cap indices corrected by ~20% . In fact, the correction across many stocks has been more severe than what the indices indicate.

In the current scenario, looking at lead indicators like rising credit growth, especially on the retail credit front, it seems that effect of Demonetization and GST- which had high impact on this space; seem to have been negated to a large extent. Economy is witnessing very strong retail credit demand on the back strong demographics, rising income levels, continuous urbanization and pent up demand post the slowdown witnessed after demonetization and GST implementation. In our last article we had indicated that we anticipated similar turn of events which is now visible on the ground. This along with other measures of the government like raising the MSP for increasing rural incomes, Housing for All, Electricity for All, UDAN etc. is likely to further push the growth momentum in the economy.

It is now being anticipated that the positivity seen in the private consumption is likely to spread over to the corporate sector and lead to Private capex demand over the next few quarters. This would lead to strong cyclical recovery in the corporate earnings. The GDP data for Q3FY18 has also shown the strong improvement in the Gross Fixed Capital Formation growth. Post Q3FY18, the Index of Industrial Production (IIP) data that have been reported are also suggesting improvement in manufacturing growth led by capital goods. Another trend, which is worth noticing, is the sharp growth in the commercial vehicle (CV) sales in the past three months. CV growth is generally assumed as lead indicator of revival in the industrial growth. Therefore, a revival in the industrial growth and industrial capex led by strong domestic demand, seems to be round the corner.

Given the scenario of a correction in the Large cap indices and in Mid and Small cap indices on one side and stabilizing/improving retail demand growth on the other side, we think

that the equity markets have come to a level where they have started to look more reasonable, and any further correction is likely to make the valuations quite attractive. The S&P BSE Sensex (at 33,000) is currently trading at about 17.8x FY19E earnings while the Midcap and Small cap indices are still trading at a higher premium to the large cap index.

Fundamentally, we think that economic growth and earnings growth are on a path of uptrend. The key economic indicators continue to buttress this thesis of ours and Q3FY18 quarterly corporate results have also showed signs of uptrend. We think that the changing trajectory of growth may absorb the negatives of rising oil prices and impact on exports (if any) due to the ongoing trade war between the US and other major economies. Though, it is difficult to take a bigger call on external events, the domestic economy seems to have stabilized and with a sizeable correction in the stock prices, equity markets seem to be presenting good investing opportunity.

While over a longer term, fundamentals of the company/sector/country are what drive the market performance; in the short run sentiments have a larger bearing on the market moves. Indian markets are going to witness four large state elections in 2018 and a general election by early 2019. Such periods have been unpredictable in the past and it is difficult to gauge the impact on the sentiments. Clearly, this could be a volatile period, which may continue to throw good investment opportunities.

To sum up, we have become positive on the potential improvement in the earnings and economic growth which is likely to drive the markets higher in the next two to three years. Though, the markets may remain volatile in the near term due to event led sentiments. Therefore, we recommend a strategy to invest in the market with a staggered manner to take advantage of the opportunities that the markets may throw up in the next 5-6 months.

Abhay AimaCountry Head - Global Consumer Business, Private Banking & Distribution, Direct & Digital Banking and Retail Liabilities.

INDIA MARKET OUTLOOK

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CONTENTS

Equity Roundup ................................................................................................................ 4

Sector Update

The Capital Goods Sector – Railways ...................................................................... 6

Forex Technicals .............................................................................................................. 12

Economic Insight ............................................................................................................. 14

Bullion Review ................................................................................................................. 16

Insurance Update ............................................................................................................. 17

Debt Overview ................................................................................................................... 18

ICICI Prudential Mutual Fund Roundup .............................................................................. 20

Kotak Mutual Fund Roundup ............................................................................................. 21

Mutual Funds - A Roundup

Equity Oriented Funds ............................................................................................... 22

Debt Oriented Funds ................................................................................................... 24

Market Overview ............................................................................................................. 26

Mutual Funds Synopsis

Equity Funds .............................................................................................................. 28

Debt Funds ................................................................................................................ 31

Fund Factsheet

Equity Funds .............................................................................................................. 32

Balanced Funds ......................................................................................................... 33

Monthly Income Plans ............................................................................................... 34

Income Funds ............................................................................................................ 36

Gilt Funds .................................................................................................................. 37

Short Term Plans........................................................................................................ 38

Ultra Short Term Funds .............................................................................................. 39

4

EQUITY ROUND-UPSensex Movement 14 March 2018 to 12 April 2018

Indian markets witnessed sharp volatility during the above-mentioned period and ended on a marginally positive note with the S&P BSE Sensex and Nifty 50 ending with a gain of 0.7% MoM and 0.3% MoM, respectively. During the above-mentioned period, volatility was witnessed across global markets due to wavering news flow on import tariff spat between the US and China, rising crude oil prices, volatility in US bond yields and fresh concerns of geo-political tensions between US and Russia. Amid negative global factors, domestic markets were positive on the back of positive view on GDP and Inflation by RBI, news on better monsoon forecast and positive economic data points. Going ahead, Indian markets are likely to track upcoming Q4FY18 earnings announcement, results of state elections and global news flow. The S&P BSE Midcap index and the S&P BSE Smallcap index rose by 2.0% MoM and 1.9% MoM, respectively. On the sectoral indices front, the S&P BSE Consumer Durable index and S&P BSE Auto index were the top performing indices as they rose by 5.0% MoM and 3.2% MoM, respectively. The S&P BSE Realty index and S&P BSE Oil&Gas index were top underperformers as they fell by 6.7% MoM and 5.9% MoM, respectively.

Key macro data released during the period showed the following: 1) As per the provisional data released by CBDT, net direct tax collections for FY18 stood at R9.95 trillion, up by 17.1% YoY. 2) The combined index of the eight-core industries rose by 5.3% YoY in Feb’18 compared to 6.1% YoY in Jan’18. 3) The RBI kept the key

policy rates unchanged, Repo rate at 6.0% and CRR at 4%. 4) Index of Industrial Production (IIP) grew by 7.1% YoY (provisional) in Feb’18, against 1.2% YoY growth in Feb’17. 5) The Centre’s fiscal deficit upto Feb’18 touched 120.3% of the FY18RE, compared to 113.4% during same period of last fiscal. 6) Consumer Price Index (CPI) based inflation for Mar’18 cooled off further to 4.28% YoY from 4.44% YoY in Feb’18. 7) As per Skymet, southwest monsoon would be normal this year and predicted monsoon to be 100% of Long Period Average. 8) As per Ministry of Commerce, India’s trade deficit in Feb’18 narrowed to USD 12.0 bn vs USD 16.3 bn in Jan’18 with exports growing by 4.5% YoY and imports by 10.4% YoY.

During the month of March 2018, Foreign Portfolio Investors (FPI) were net buyer to the tune of ~R117 bn and Domestic Institutional Investors (DII) were net buyers to the tune of ~R75 bn.

Majority of global equity indices ended on a mixed note during the above-mentioned period. The European markets ended on a positive note with Germany’s Dax index and UK’s FTSE index ending with a gain of 1.6% MoM, and 1.7% MoM, respectively. However, the US markets ended on a negative note with the S&P 500 index and the Dow Jones index declining by 3.7% MoM, and 2.1% MoM, respectively. Asian markets also followed its US peer and ended on a negative note with Hong Kong’s HangSeng index, Japan’s Nikkei index and China’s Shanghai Composite index declining by 2.4% MoM, 1.4% MoM and 3.9% MoM, respectively.

Domestic Indices Open High Low Close Absolute Change

% Change

S&P BSE Sensex 33734 34177 32484 34101 244 0.7%Nifty 50 10393 10470 9952 10459 32 0.3%Nifty Next 50 28720 30143 27892 29957 1,098 3.8%Nifty 500 9127 9263 8745 9247 89 1.0%S&P BSE 200 4532 4602 4349 4593 49 1.1%S&P BSE 100 10745 10882 10317 10862 88 0.8%Nifty Midcap 100 19040 19699 18302 19572 464 2.4%Nifty Smallcap 100 8119 8279 7610 8168 10 0.1%S&P BSE Bankex 27741 28436 26418 28273 367 1.3%S&P BSE IT 12385 12774 11960 12717 332 2.7%S&P BSE Auto 24598 25569 23494 25440 797 3.2%S&P BSE FMCG Sector 10472 10715 10117 10663 166 1.6%S&P BSE Oil&Gas 15602 15608 14243 14704 (920) -5.9%S&P BSE Healthcare 13701 13829 13017 13604 (79) -0.6%S&P BSE Cap Goods 18738 19253 17949 19199 488 2.6%S&P BSE Metal 14327 14417 12943 13956 (436) -3.0%S&P BSE Power 2181 2214 2098 2193 16 0.7%S&P BSE Cons Durable 21720 23027 21272 22815 1,095 5.0%S&P BSE Infra. 233 238 223 236 3 1.1%S&P BSE Realty 2427 2448 2206 2271 (164) -6.7%

Overseas Indices Open High Low Close Absolute Change % Change

S&P 500 2774 2777 2554 2664 (101) -3.7%Dow Jones Ind Avg 25087 25130 23345 24483 (524) -2.1%Dax (Germany) 12212 12454 11727 12415 194 1.6%FTSE (UK) 7139 7270 6867 7258 120 1.7%Hang Seng 31322 31978 29519 30831 (770) -2.4%Nikkei 21765 21934 20347 21660 (308) -1.4%Shanghai Composite 3299 3314 3091 3180 (130) -3.9%

Sources: Bloomberg, Note: Closing prices of all the above indices are as on 12 April 2018

Source: Bloomberg

EQUITY ROUND-UP

31500

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34500Open High Low Close

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SECTOR UPDATE The Capital Goods Sector – Railways

Industry backgroundIndian Railways has been taking several transformative steps over the last few years in a bid to wrest market share from competition (roads) and also put the national transporter on track, according to Economic Survey 2018. The Survey highlighted that Indian Railways’ has taken various steps to prioritise investment in important areas, further adding that with the national carrier seeing stiff competition from other modes of transportation, the government is initiating various transformative measures to bring the railways back on track. These measures focus on prioritising investments in important areas like Dedicated Freight Corridors (DFC), high-speed rail, high capacity rolling stock, last-mile rail linkage, port connectivity and attracting private and foreign direct investment. It is important to note that in the 64 years between 1950 and 2014, while freight loading rose by 1,344% and passenger kilometers grew by 1,642%, route kilometers went up by a meagre 23%. Thus, over the last few years, the government has been focusing on massive investments to transform the ailing state-run freight carrier into a nimble-footed, result-oriented entity. Thus, from an average yearly spending of a meagre R243.07 bn during the FY04-09 period, capital investment went up to R1.11 trillion in FY17 and has touched R1.48 trillion in FY19 Budgetary Estimates (BE). We believe that the government’s expansion and upgradation plans appear significant and a step in the right direction to transform the railways into a growth driver for the economy.

Investments in railways almost tripled in the last five yearsIndian Railways is the third largest network in the world and it holds tremendous prospects in the short, medium and long-term, as it undergoes rapid modernisation. In recent years, upgrading railway infrastructure has become a primary area of focus for the government. As a result, capital investment in railways, after stagnating at ~ R400-500 bn during FY10-14, has increased significantly from R587 bn in FY15 to R1.48 trillion in FY18-19 BE, growing at a CAGR of 26% over the last four years. As per Indian Railways’ 5-Year Action Plan (FY15-19) report, it is anticipated that decongestion, safety, rolling stock and passenger amenities might be funded through budgetary support, LIC and Indian Railway Finance Corporation, while new lines, high-speed rail and station redevelopment are expected to be financed through Public Private Partnership (PPP), state JVs and internal accruals, which need structural reforms to materialise.

Additionally, the government is setting the right priorities in place and spending on decongestion (through doubling and electrification of tracks) rather than on construction of new lines. The government is currently targeting electrification of 24,400 route kms (RKM) over the next five years (currently ~30,000 km or ~42% of total ~66000 kms of Indian Railways – as per media reports) to improve throughput.

Planned capital expenditure of r8.56 trillion for Railways under five-year plan (FY15-19)

Under the current transformation project, or Indian Railways 5-Year Action Plan Report, Indian Railways plans to invest R8.56 trillion over the five-year period ( FY15-19). Of this, about R1.9 trillion each would be spent on network expansion, including electrification and network decongestion, while R1.27 trillion and R1.02 trillion would go towards improving safety aspects and increasing supplies of locomotives, coaches and wagons, respectively.

We believe, the government’s heightened focus on safety, infrastructure development and electrification and energy efficiency has led to significant rise in order inflows for various companies in this space. Further, plans to award PPP projects for supply and manufacture of Electric Multiple Unit (EMUs), DFC, high-speed rail and metro projects are expected to boost the country’s rail sector and also companies involved in related spaces.

Some of the key areas earmarked for investment under the government’s long-term plans include:

Increasing track lengthAs per Ministry of Railways reports, the railways plan to increase the total track length by 20% to 138,000 km by FY20; raise its daily passenger carrying capacity from 22 mn in FY16 to 30 mn by FY20; and its freight carrying capacity from 1.1 bn tonnes in FY16 to 1.5 bn tonnes by FY20. In order to achieve these targets, the railways has outlined plans (FY15-19) to add ~2,000 km of new tracks, doubling (or adding multiple lines) ~8823 km of track, along with gauge conversion of ~4,480 km of track, which are likely to improve capacity in the near future. The railways is now paying more attention to track-doubling projects

Particular Capex (RTrillion)Network Decongestion (Including DFC + electrification doubling + electrification and Traffic facilities) 1.99

Network Expansion (including electrification) 1.93National Projects (North Eastern and Kashmir Connectivity) 0.39Safety 1.27IT and Research 0.05Rolling Stock (Locomotives, coaches, wagons) 1.02Passenger Amenities 0.13High Speed Rail and Elevator 0.65Station Redevelopment 1.0Others 0.13Total 8.56

Source: Indian Railways - 5 Year Action Plan Report

243

397 408 451504 538

587

938

1110

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1480

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1600

Avg FY04-09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18RE FY19BE

Rs B

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Capital Investment in Indian Railways

Source: Ministry of Railways, India Budget Reports

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SECTOR UPDATE commonly referred to as the Golden Quadrilateral and its two diagonals (Delhi-Chennai and Mumbai-Kolkata) add up to a total route length of 10,122 km which comprises 16% of the route that carries more than 52% of Indian Railways’ passenger traffic and 58% of revenue earning freight traffic. The existing trunk routes—Kolkata-Delhi on the Eastern Corridor and Mumbai-Delhi on the Western Corridor—are highly saturated with line capacity utilisation varying between 115% and 150%. As a result, railways has lost its share in freight traffic from 83% in 1950-51 to 35% in 2011-12. Not only this, national highways along these corridors, which comprise 0.5% of the road network, are carrying almost 40% of the road freight. Additionally, surging power needs (which require heavy coal movement), booming infrastructure and construction activity and growing international trade have led to the conception of the ‘Dedicated Freight Corridors’ along the Eastern and Western Routes. The overall project cost has been estimated at ~R815 bn, comprising construction cost of ~R734 bn and ~R81 bn for land acquisition. Excluding land cost, Eastern Dedicated Freight Corridor (EDFC) accounts for ~36% of the cost (~R267 bn) and the Western Dedicated Freight Corridor (WDFC) accounts for the balance ~64% (~R467 bn).

Additionally, during the Union Budget 2018-19 speech, the Finance Minister has announced that work on Eastern and Western DFCs is in full swing. He further added that to further strengthen the infrastructure of goods sheds and fast-tracking the commissioning of private sidings, the government plans to procure adequate number of rolling stock for FY19, which includes ~12000 wagons, 5160 coaches and approximately 700 locomotives (mostly electric).

Metro ProjectsMetro Rail projects in India have picked up and are likely to provide sizeable opportunity over the next three to five years to the construction industry. India plans to develop metro rail projects in over 30 Indian cities. Currently, the metro rail network is operational or partly operational in 10 cities and another 4 cities have metro projects under implementation. New metro rail networks have also been developed to improve the urban transport situation in India. While Tier-II cities like Lucknow, Kanpur, Ahmedabad and Nagpur are setting up their dedicated metro networks, the proposals for cities such as Chandigarh, Bhopal, Ludhiana and Kozikode are being evaluated currently. The overall cost of expansion of operational/under implementation metro projects is over R2.5 trillion, thus supporting the order books of many players in the entire value chain, including companies involved in construction, signaling and communication systems, power transmission, etc. Further, metro rail projects worth another R2 trillion are in various stages of approval and are likely to come up for bidding within the next five years. As per the CMI Ltd Annual Report FY17, around 10% each of the total capital expenditure in metro rail goes to signaling/telecom and

(targeted at increasing freight carrying capacity), rather than network expansion projects like laying new tracks as providing additional tracks by way of doubling existing routes enables railways to cater to the increasing demand in passenger and freight traffic in certain saturated segments. The change in thrust areas is clearly visible in terms of both the physical targets outlined in these areas as well as the increased outlay for doubling projects.

Electrification of routesAs per a Ministry of Railways report, during the last four years (FY13-17), a total 103 railway electrification projects, consisting of 16,815 RKM have been sanctioned at estimated cost of R176.15 bn and about 4,777 RKMs were electrified during the same period. Going ahead, under its ’Mission Electrification’ project, Indian Railways plans electrification of 24,400 RKM in the next five years, which is almost equal to what has been done since introduction of electric traction on 3 February, 1925. Given the historical cost assumption of ~R10 mn for electrification of 1 RKM (the cost incurred for electrification of 16,815 RKM had been ~R176.15 bn, which translates into ~R10.4 mn for 1 RKM), the opportunity size to electrify 24,400 RKM would come to around R244 bn over the next five years.

Flagship programmes like DFC and Metro to further spur capex related growth

Dedicated Freight Corridor ProjectThe Indian Railways’ quadrilateral linking programme for the four metropolitan cities—Delhi, Mumbai, Chennai and Kolkata—

380500

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in K

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Indian Railways increasing thrust to enhance exiting capacity

New Line Doubling

Source: Indian Railway - 5 Year Action Plan Report

740 804 937 1033 1089 11901465

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FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18(T)

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Railway Electrification (RKM)

Source: Central Organization for Railway Electrification, Budget Speech

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SECTOR UPDATE

electrification works. The remaining 80% goes to civil works and rolling stock. Additionally, the government has recently mandated that 25% of critical equipment and sub-systems in metro projects would be produced in the country. Thus, the government’s focus on manufacturing through ‘Make in India’ is also serving as a catalyst for various companies involved in design, engineering and civil works to be undertaken for metro networks across the country.

View: The outlook for the railway sector is positive, as it is in the limelight and on a rapid growth path. The Indian government has set forth several plans for

network expansion as well as upgrade and modernisation of the existing infrastructure. The Union Budget 2018-19 decoded ample opportunities for players involved in various projects and supplies to Indian Railways. Among the positive outcomes of the budget include an increase in capital outlay for railways from R1.31 trillion for FY17-18 RE to R1.48 trillion for FY18-19 BE. Along with the increased capital outlay, the government has announced several targets like laying of 18,000 km of second, third and fourth line works, 5,000 km of gauge conversion, electrification of 6,000 km of railway lines and many others for FY19. Out of the total outlay of R1.48 trillion, the Finance Ministry has announced a gross budgetary support of R551 bn, which is also a very positive indicator. In addition to conventional railways, the government’s thrust on development of DFC and Metro is also likely to spur capex related spending by the government. We believe, the government has taken the right decisions in the recent past to augment limited new lines and improve the condition of existing lines in a big way which is likely to improve the efficiency of the railways and thereby its profitability. Key action plans like ’Mission Electrification’ and ’Indian Railway Five Year Action Plan FY15-19’ are in the right direction for improving Indian Railways’ current situation. We believe even a small share of the overall spending for conventional railways, metro projects and DFC expected over the next few years is likely to provide the companies involved in various projects like electrification, wagons manufacturing and even EPC projects a mammoth opportunity to expand within their product segments. In our model portfolio, we have a L&T (large EPC player for various civil works for conventional railways, metros as well as DFC), BHEL (locomotive manufacturer) and KEC International (railway electrification works), which are expected to see huge opportunity from the government’s increased railway expenditure. Currently, we have a Buy rating on BHEL and a Hold rating on L&T and KEC International.

Metro Projects City Opening Year

Operational Kms

Under Construction

Km

Kolkata Metro Kolkata 24-Oct-84 27.22 113.42

Delhi Metro Delhi 24-Dec-02 231 140

Namma Metro Bengaluru 20-Oct-11 42.3 34.37

Rapid Metro Gurugram 14-Nov-13 11.7 0

Mumbai Metro Mumbai 8-Jun-14 11.4 68.6

Jaipur Metro Jaipur 3-Jun-15 9.63 2.4

Chennai Metro Chennai 29-Jun-15 27.88 19.17

Kochi Metro Kochi 17-Jun-17 18.4 25.6

Lucknow Metro Lucknow 5-Sep-17 8.5 33

Hyderabad Metro Hyderabad 29-Nov-17 30 41.6

Nagpur Metro* Nagpur - - 38.2

Noida Metro* Noida - - 29.7

Gandhinagar- Ahmedabad*

Ahmedabad and Gandhinagar

- -19

Navi Mumbai Metro*

Navi Mumbai - - 11.1

Pune Metro* Pune - - -

Source: Various News Articles; *under construction

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SECTOR UPDATE Larsen & Toubro LtdBackground

Larsen & Toubro (L&T) Ltd is a technology, engineering, construction and manufacturing company. The company operates in five segments, including Hydrocarbons, IT & Technology Services, Financial Services, Developmental Projects and ‘Others’ (comprising Realty, Shipbuilding, Ready Mix Concrete, Mining and Aviation). At the standalone level, its segments include, infrastructure, power, metallurgy, material handling, heavy engineering, electrical and automation, machinery and industrial products.

CMP : R1375, Mkt Cap: R1903 bn

Key Details52-week H/L (R) 1470/1108

Book Value (R) YTD 393.9

Face Value (R) 2.0

P/E (TTM) (x) 23.9

Dividend Yield (%) 1.0

Shareholding Pattern (%) on 31 December, 2017Promoter 0.00Institutions 56.68Public 43.32Total 100.00

Valuations PE (x)FY17 FY18E FY19E63.4 53.7 27.9

View: L&T is India’s largest engineering and construction company. Although L&T saw a subdued order inflow in H1FY18, Q3FY18 saw a sharp rise in order inflow, mainly led by domestic orders. The management expects Q4FY18 to see further traction on account of the shift of orders from H1FY18 to H2FY18 in many key segments, because of GST implementation led delays. L&T is exposed to several levels across business/geographic segments and has emerged as the engineering and construction partner of choice in India, which provides it a robust foundation to capitalise on the next leg of the investment cycle. The management continues to be optimistic about the opening up of the defense sector, which could be a big opportunity for L&T, as it is ready with both capacity and expertise to grab such opportunities. The management has guided that incremental order inflow growth would be supported by a pickup in ordering activity in the power, railways, hydrocarbons (both international and domestic markets) sectors, apart from the defense segment. Overall, the investment cycle in the private sector is expected to recover in the medium term, which is likely to drive order inflows for the company. We have a Hold rating on the stock, with a target price of R1403 FY19E standalone EPS of R49.2 + Subsidiary value of R418/share. Any revision in the target price would depend on changes in order inflows, executions, profitability of subsidiaries, rollover to the next financial year, management guidance and the general business momentum.

Earnings Summary (Standalone)

Y/E Sales Growth EBITDA Margin Net Profit EPS Growth P/E Div. Yield31-Mar R Bn (%) R Bn (%) R Bn R % (X) (%)

16A 638 11.9 58 9.1 46 21.7 (9.8) 63.3 1.317A 663 3.9 64 9.7 46 21.7 (0.1) 63.4 1.318E 743 12.0 75 10.1 54 25.6 18.1 53.7 1.319E 839 13.0 91 10.8 69 49.2 92.1 27.9 1.3

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Daily closing price for last 3 years of Larsen & Toubro

Source: Bloomberg

10

SECTOR UPDATE Bharat Heavy Electricals LtdBackground

Bharat Heavy Electricals Ltd (BHEL) is an integrated power plant equipment manufacturer and one of the largest engineering and manufacturing companies of its kind in India. It is engaged in the design, engineering, manufacture, construction, testing, commissioning and servicing of a wide range of products and services for the core sectors of the economy, viz., Power, Transmission, Industry, Transportation (Railway), Renewable Energy, Oil & Gas and Defense, with over 180 products offerings to meet the needs of these sectors. Establishment of BHEL in 1964 was a breakthrough as it led to an upsurge in India’s heavy electrical equipment industry solutions. Consistent performance in a highly competitive environment has since enabled BHEL to attain the coveted ‘Maharatna’ status in 2013.




Face Value (R) 2.0

P/E (TTM) (x) 71.7


Shareholding Pattern (%) on 31 March 2018Promoter 63.06Institutions 31.54Public 5.40Total 100.00

Valuations PE (x)FY16 FY17NA 71.8

View: BHEL’s performance remained muted during H1FY18, mainly due to executions slowing down, which was led by a sharp decline in new order inflows and poor performance of the industrial segment. However, BHEL’s performance improved marginally in Q3FY18, led by a pickup in execution during the quarter. Additionally, the slow-moving order backlog of the total order book has declined sharply in Q3FY18, compared to Q2FY18, leading to ~47% YoY jump in executable orders. Going ahead, the management expects good traction in the hydro power plant, along with its emission-norms-related projects in the pipeline, which are likely to support growth for the company. BHEL’s long-term growth earnings would be supported by its large size, execution capability and strong balance sheet. Further, with the government’s clear focus on the manufacturing sector, given its ’Make in India’ initiative, the company has indicated new opportunity arising in from the railways and defense sectors as well. This is likely to drive revenues from the industrial segment over the next few years, led by the railways, defense, transmission, solar and water sectors. We feel, as execution picks up, strong margin expansion could be expected for the industrial segment and for the overall company, over the medium term. We have a Buy rating on the stock, with a price target of R132, based on price/book value multiple of 1.5x (maintaining earlier multiple) of FY17 book value of R88. Key monitorables for our earnings expectations would be improving order flows, faster executions and rollover to the next financial year.

Earnings Summary (Consolidated)

Y/E Sales Growth EBITDA Margin PAT EPS Growth P/E Div. Yield31-Mar R Bn (%) R Bn (%) R Bn R % (X) (%)

14A 395.7 (18.3) 45.8 11.6 35.0 14.3 (47.0) 6.2 5.215A 307.9 (22.2) 25.3 8.2 14.5 5.9 (58.5) 15.0 2.316A 255.2 (17.1) (13.6) (5.3) (7.2) (1.9) NA NA 0.717A 282.5 10.7 11.0 3.9 4.8 1.2 NA 71.8 1.3

020406080

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Apr-1

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Daily closing price for last 3 years of BHEL

Source: Bloomberg

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SECTOR UPDATE KEC International LtdBackground

KEC was incorporated in 1945 as Kamani Engineering Corporation by the RPG Group. KEC is a global power transmission infrastructure major for engineering procurement and construction (EPC) projects. The company’s business verticals include power transmission and distribution (T&D), cables, railways, water, renewables (Solar Energy) and civil. Globally, the company has powered infrastructure development in more than 61 countries. KEC is a leader in power transmission and EPC projects and has more than seven decades of experience. Over the years, it has grown both organically as well as inorganically.




Face Value (R) 2.0

P/E (TTM) (x) 25.8


Shareholding Pattern (%) on 31 December, 2017Promoter 50.99Institutions 30.67Public 18.34Total 100.00

Valuations PE (x)FY17 FY18E FY19E34.6 27.2 23.0

View: Over the last couple of years, KEC has been able to diversify its revenue base by gradually raising the revenue contribution from the railways, cables and civil segments. Indian Railways’ long-term plan to electrify ~35,000 km of railway line by FY20 improves the revenue visibility for for KEC from railways, given its leadership position in the railway overhead electrification segment. We believe, a strong order book growth (up by 53.3% YoY at the end of Q3FY18) has led to the improvement in revenue visibility for next 18-24 months. The management has moderated its revenue guidance slightly for FY18 from 15% YoY to ~10 to 15% YoY and its stable operating profit to 9.5% for FY18, led by the continued improvements in SAE, railways and cable margins. Factors like an improving order inflow scenario, reducing debt profile, diversification of overall company revenue coupled with improving ROCEs and ROEs and controlling of receivable cycles are likely to drive profitability for the company going ahead. Currently we have a Hold rating on the stock, with a target price of R321 based on PE multiple of 18x (maintained the earlier multiple) FY19E EPS of R17.8. Any earning/target price revision would depend on ordering and tendering activities by domestic T&D players, improvements in market share and changes in the general business momentum.

Earnings Summary (Consolidated)

Y/E Revenue Growth EBITDA Margin Net Profit EPS Growth P/E Div. Yield31-Mar R Bn (%) R Bn (%) R Bn R % (X) (%)

16A 85.2 0.6 6.9 8.1 1.5 5.8 (5.7) 71.3 0.217A 85.8 0.8 8.2 9.5 3.0 11.9 106.1 34.6 0.418E 96.6 12.5 9.7 10.0 3.9 15.1 27.1 27.2 0.419E 111.1 15.0 11.1 10.0 4.6 17.8 18.3 23.0 0.4

050

100150200250300350400450

Apr-

15

Jun-

15

Aug-

15

Oct

-15

Dec

-15

Feb-

16

Apr-

16

Jun-

16

Aug-

16

Oct

-16

Dec

-16

Feb-

17

Apr-

17

Jun-

17

Aug-

17

Oct

-17

Dec

-17

Feb-

18

Apr-

18

Daily closing price for last 3 years of KEC International

Source: Bloomberg

Rating Expected to Buy Appreciate more than 10% over a 12 to 15 month periodHold Appreciate below 10% over a 12 to 15 month periodUnder Review Rating under reviewExit Exited out of the Model Portfolio

Rating Interpretation

FOREX TECHNICALS

12

EUR/USD

After having stayed within the Ichimoku Cloud in Q4CY17, the pair continues to trade below the cloud and has found support near the Tenkan Sen line at 106.57. Immediate support is at Kinjun Sen line at 106.02. At present, the pair is hovering around the 2017 low of 107.31. Break of this level will resume a larger decline from 118.65 and target 100% projection of 118.65 to 108.12, from 114.73 at 104.20 next. The MACD continues to be in a negative territory, indicating lower lows on a daily basis. This bearish case will now be favoured as long as the 110.47 resistance holds.

USD/JPY

The pair not only continues to trade back within the up-trend channel seen in 2017, it also trades back within the thick Ichimoku Cloud this month. It is expected to see further downside to be contained at the 1.3711 support, to bring rally resumption. However, below 1.3711, the pair will resume the fall from 1.4345 through the 1.3651 resistance-turned-support. On the upside, break of 1.4243 will resume the medium-term uptrend to 100% projection of 1.2108 to 1.3651, from 1.3038 at 1.4581 next. Immediate resistance is seen around the 1.4124 Pivot, followed by 1.4171 and 1.4210 in the dailies.

GBP/USD USD/INR

Last month’s positive MACD crossover created a bullish momentum for the pair, and the pair continued to trade in a broad range of 64.3000 to 65.3000 in the past month. The pair continues to trade well above the thick Ichimoku Cloud since mid-February, 2018. The flat Kinjun Sen line 65.0213 is a crucial and strong resistance in the near-term, which should hold for now. The long-term downtrend line provides immediate resistance at the 65.5500 levels. However, on the upside, the pair needs to convincingly break above 65.8950 (the September 2017 high) to test the previous

Positive MACD crossover in weekly continues to indicate more steam in the recent rally, as the pair now continues to trade above the thick Ichimoku Cloud. In the dailies, the key Fibonacci level at 38.2% retracement of 1.6039 (the 2008 high) to 1.0339 (the 2017 low) at 1.2516 remains intact despite attempts to break it. On the other hand, the Tenkan Sen line in weekly remains a strong resistance for now, at 1.2354, followed by the psychological level of 1.2275. In the dailies, if the pair trades below the 1.2275 level for a sustained period, the price action will turn bearish. The Key Pivot levels would be 1.2257 (S1) and 1.2406 (R1) in the dailies.

14

ECONOMIC INSIGHTCreating Jobs: Why? How? Where?Addressing the employment challenge in India

Recent economic discourse on the Indian labour market has revolved around the inadequacy of current data sources, finding new ways to measure the performance of the labour market such as through the social security database (like the EPFO) and debating the pace of formalisation. But first, we should start with what the data that is already available telling us and address the employment challenge at hand.

We need to go back to the basics and see where labour market trends are headed and what this means for the labour policy in the future. We base our analysis on the data provided by the Labour Bureau which gives us estimates of the labour force and employment since 2010 in its Employment & Unemployment Survey (EUS), conducted annually. This, despite all its flaws, has been the basis of any judgment on the performance of the labour markets.

There are two important issues facing the labour market: the first is the growth required to employ the expanding labour force; and the second is the need to create more jobs in the formal sector. We address these in our report.

Insights into the labour market

So what does the labour bureau survey (EUS) tell us about the labour market? Employment and Growth nexus not as strong as before

The EUS shows that the link between employment and GDP growth has been weak in the last few years. Employment growth slowed to 1.1% between 2012 and 2016, as against 2.4% between 2000 and 2005. This was despite growth remaining fairly buoyant during our reference period (CAGR GDP growth of 6.8%). As a result, the employment elasticity, which measures employment growth with GDP growth, reduced to 0.17, from 0.20 over the last decade. In simple terms, it means that for every 10% increase in output, employment grew by 1.7% during 2012 and 2016, as against 2.0% between 2000 and 2012. This could have been due to an increase in the capital intensity of output, moderation in the labour force participation rate, mismatch in supply and demand of skills, and/or slow growth in labour intensive sectors. Clearly the economic structure has changed and it demands targeted policies rather than just relying on automatic GDP multipliers.

Unemployment continues to tick upwards

We observe that not only has the employment-growth nexus faded, but also the gap between the labour force (employed + unemployed) and the employed has widened. Unemployment rate has risen from 3.3% in 2011-12 to 3.7% in 2015-16. The labour force has expanded by around 11 mn each year since 2010-11, although employment additions have been close to 8 mn, with about 80% of the additions in the informal sector.

What is our near “full employment” growth rate?

Based on the EUS database, we estimate that the labour force (employed + unemployed people) could rise close to 580 mn by 2025, from 480 mn currently—an addition of 100 mn new people entering the workforce. Given the expanding labour force, weak growth and employment link and rising unemployment, at what rate should we grow to absorb these entrants to the labour force?

Employment elasticity is an important concept in this regard. In the last five years, employment elasticity has been close to 0.17—implying that for every 1% increase in GDP, employment has grown by 0.17%. We can flip this elasticity around to get the GDP growth required to employ the expanding labour force.

We find that GDP will have to grow by as much as 13% on average over the next decade if we want all workers who join the labour force to be employed (assuming unemployment rate remains steady at 3-4%). This highlights that the challenge of creating enough jobs in the system will not be easy.

Towards a job policy

Which sectors should we focus on? The policy-maker has two options to address the issue at hand: 1) Try and achieve this rate of GDP growth; or 2) Try and push up elasticities. While the first of these policy options seems like a tall task, the second could be more achievable in the medium term.

Drawing from the labour survey, we find that the services sectors has created the highest number of jobs in the last few years followed by the industrial sector, while people have moved out of the agricultural sector.

The “Other Services” sector at the rescue

Sector-specific elasticities give us important insights into what jobs policy could focus on. The employment absorbing power (measured by employment elasticity) of certain service sector categories like the “Other Services” component (this includes coaching, recreational and sports activities, hairdressing, tailoring, persons employed in households, etc) has been much higher than even conventional labour intensive sectors such as manufacturing. For every 10% increase in output, the ‘other services’ sector employment grew by 4.7%, while employment in the manufacturing sector grew by 3.3%; employment in trade, hotels and restaurants grew by 2.5%; and in finance and real estate, employment grew by 0.6%. Apart from the services sector, two other sectors that have high elasticities are utilities and construction, both of which saw employment growing by more than 10% for every 10% increase in output

The Age of “Digital” jobs

There is a part in the service sector where job opportunities are rising at an exponential rate but are overlooked by current employment analysis. These are the new digital ecosystems and

ECONOMIC INSIGHT

15

ECONOMIC INSIGHTstart-ups. Not only are these systems (e-commerce and online aggregators) creating direct job opportunities, but they are also boosting opportunities in allied ecosystems such as logistics, warehousing, IT, ITeS, etc. To put out some numbers, employment in cab-hailing services such as UBER/OLA alone has increased from 0.3 mn in 2015 to over 1 mn in 2018 (McKinsey report, India’s Labour Market: A new emphasis on gainful employment, June 2017).

Apart from creating employment opportunities, digital and start-up ecosystems have also been able to absorb a significant number of relatively low skill workers (in delivery services, for example) and provide them with access to the formal economy (access to banking services, credit etc, for example). It is estimated that employment in these allied systems will rise from 23,000 in 2012 to 1.5 mn by 2021 (Study by KPMG, Impact of ecommerce on employment in India). Further, employment by start-ups is estimated by this study to increase from 80,000 in 2015 to 2,50,000 by 2020.

Therefore, a way forward for India’s labour policy could be to focus more on labour intensive services and the upcoming “digital ecosystems”.

Not just about enough jobs, but enough “formal” jobs

The employment challenge is not just about creating enough jobs but also to provide enough “formal jobs”. The EUS database shows that 22% of the workers are in the formal sector while 78% are still in the informal sector. The survey classifies formal workers as those that receive social security benefits. But this is only a narrow definition of the formal sector, and there are other ways of measuring the formal sector like GST registrations. The social security database shows that there are close to 92 mn formal jobs in India, and as per GST registrations, formal jobs are close to 127 mn. That said, no matter what measure we look at, the ratio of informal workers to formal workers remains significant. Due to availability of historical data, we stick to the social security definition of the formal sector, as per the EUS database, for our analysis.

How many formal jobs are created in India each year?

The EUS database shows that the pace of formalisation (formal workers defined as those who receive social security benefits) has risen rather gradually over the last five years (from 17% in 2012 to 22% in 2016). On average, the employment created in the formal sector has been close to 1.5-2.5 mn per year. This is much lower than the claim made in a recent payroll study that 6-7 mn formal jobs are being created every year. The study refers to social security data for 2017 and 2018 and since the last two years have witnessed a significant structural change in the formal economy (due to DeMo and GST), formal job additions, as suggested by this study, cannot be taken as representative of the trend, going ahead.

What formalisation doesn’t mean?

While formalisation should be an important goal for labour policy, it should not be treated as a holistic measure of the performance of

the labour market. This is because even if formalisation increases, it will not automatically ensure or address the following issues:

Low labour productivity: Labour productivity is much lower in India compared to other East Asian exporters. For example, in 1990, labour productivity in India was higher than that in China. However, China has seen a much higher growth in its productivity levels (9%)—almost double of what India has witnessed between 1990 and 2005.

Unskilled labour remains an issue: A large part of the labour force remains unskilled. Only 4% of total number of workers in manufacturing has any technical education, and only 27% have vocational training, of which 90% are non-formally trained. Overall, only 2% of the workforce is skilled, compared to 40% in China.

Skill mismatch: As per a Labour Bureau survey, 58.3% of graduates and 62% of post-graduates, who are unemployed, cite non-availability of jobs that match with their education and skills as a reason.

while manufacturing employment continues to be low (India turned into a service economy without having gone through the proper experience of industrialisation (premature deindustrialisation). This implies that the employment absorption power of the manufacturing sector remains limited, and a major part of the population is still dependent on agriculture. Even during the high growth years (2002-07), despite having grown by 9% annually, manufacturing added only 6 mn employments. Overall, the sector accounts for only 11% of the total employed in the country (2011-12).

Rigid labour markets: Restrictive conditions on hiring and laying-off of workers, closure of plants and dealing with trade unions.

To sum up, we need to start by accepting the labour challenge at hand; steer policy towards not just labour intensive manufacturing sectors, but also the service sector; raise productivity and address skill mismatch issues; and capitalise on the expanding digital services, as an engine of employment growth.

ECONOMIC INSIGHT

16

The Month

The dollar remained the driver for bullion prices in the last couple of months—with the squeezed price movement leading to range-bound price action in gold. Broadly, gold maintained a USD 1300 – USD 1360/oz range and sustained at low levels, in spite of an FOMC rate hike by 25 bps in March—a well-discounted event nevertheless. The Fed has hiked the interest rate—with a tepid hawkish guidance for further hikes in 2018-19—which was seen as a negative for gold and ideally should have worked as a catalyst to put the yellow metal under pressure. However, given the tentative dollar globally, investors seem reluctant to take gold prices further down. The recent tariff war between the US and China also posed significant risk of a possible global trade war, which supported gold prices in the last few weeks.

Gold ETFs have reported consistent inflows in the last couple of months, indicating strong demand from institutional investors and fund managers. SPDR Gold Trust, the world’s largest gold ETF, added about 47.5 tonnes (worth USD 2 bn) during the January-March‘18 period. SPDR Gold ETF’s current holdings stand at 850 tonnes (worth USD 36 bn). Gold ETF investments are seen as a tenable form of investment in gold which influence prices considerably. A CFTC (Commodity Futures Trading Commission)

weekly report also shows net-increase in long positions from both commercial and non-commercial (large speculative) during the period, supporting prices.

Physical demand from India, the largest consumer of gold, remains steady, largely supported by the jewellery industry. Over the last few years, investment demand in the country has not picked up, as prices have remained capped in the domestic market. The supply side is usually dominated by gold dore imports by refiners and fine gold imports by nominated banks and agencies. The shift of jewellery businesses from the unorganised to organised sector post GST implementation, has been one big positive for the bullion industry. In its Annual Budget 2018-19, the government has announced policy changes for bullion, with respect to setting up of Spot Exchanges and gold monetisation schemes, the blueprint of which is awaited by the industry. In the meanwhile, The Reserve Bank of India has reduced annual gold import authorisation of banks to 16 nominated banks, as against 19 last year.

Projection:

Gold continues to look at the dollar for directions. However, persistent signs of a trade war may break this correlation with gold starting to play out on its own strength. In the international market, gold prices are likely to remain above the USD 1300-1320 per oz range, and it won’t come as a surprise if this remains the base for the rest of the year and even pushes higher to pierce through the USD 1360-70/oz level.

Disclaimer:

This communication is for informational purposes and is not guaranteed as to accuracy, nor is it a complete statement of the financial products or markets referred to therein. This is not a recommendation, offer or solicitation to buy or sell any instrument pertaining to any asset class including, but not limited to currencies, interest rates, commodities and equities in underlying market or any form of derivatives on any of them or a combination of any of them. Neither HDFC Bank Ltd. (including its group companies) nor any employees of HDFC Bank Ltd. (including those of its group companies) accepts any liability arising from the use of this communication.

Source:- Bloomberg & MCX

BULLION REVIEWGold Movement in March 2018

March-1812-Apr-18 High Low

USD - 1334.94 1353.50 1311.31INR - 31013.00 30756.00 30154.00

1300

1310

1320

1330

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1360

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ar2-

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ar28

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Gold - USD Per Ounce

17

INSURANCE UPDATE

the best treatments and also enable you to meet all your medical needs, without cutting into your savings.

Features & Benefits of the plan

covered conditions

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R R

Conclusion

right direction.

Numerous studies have shown that be it urban or rural,

R

R

R R

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surgery and the ongoing medical treatments and sessions

Cardiac Care: Need and importance today

18

DEBT OVERVIEW

Period Interest Rate(p.a.)7 - 14 Days 3.50%15 - 29 Days 4.25%30 - 45 Days 5.50%46 - 60 Days 5.75%61 - 90 Days 5.75%91 Days - 6 Months 5.75%6 Months 1 Day- 6 Months 3 days 6.00%6 Months 4 Days 6.00%6 Months 5 Days- 9 Months 6.00%9 Months 1 Day- 9 Months 3 days 6.00%9 Months 4 Days 6.00%9 Months 5 Days - 9 Months 15 days 6.00%9 Months 16 Days 6.25%9 Months 17 Days < 1 Year 6.25%1 Year 6.75%1 Year 1 Day - 1 Year 3 Days 6.75%1 Year 4 Days 6.25%1 Year 5 Days - 1 Year 15 Days 6.25%1 Year 16 Days 6.25%1 Year 17 Days - 2 Years 6.25%2 Years 1 Day - 2 Years 15 days 6.00%2 Years 16 Days 6.00%2 Years 17 Days - 3 Years 6.00%3 Years 1 Day - 5 Years 6.00%5 Years 1 Day - 8 Years 6.00%8 Years 1 Day - 10 Years 6.00%

Highlights: Domestic banking system liquidity conditions turned volatile during the above mentioned period. While year-end demand for funds, pick up in credit growth and rise in Currency in Circulation led to liquidity tightness; RBI’s liquidity support measure in the form of additional longer term variable rate repo auctions and maturity of T-bills issued under Market Stabilization Scheme (MSS) led the liquidity conditions to ease. The daily average banking liquidity as measured by the RBI’s Liquidity Adjustment Facility (LAF) was at a deficit of ~R56 bn compared to deficit of ~R171 bn in the previous period. Call money market rates traded in the range of 5.25% - 6.10%.In the first Bi-monthly Monetary Policy for FY19, the RBI maintained status quo on the interest rates, which was in line with expectations. However, the RBI revised the CPI inflation projections on the lower side for FY19. The CPI inflation projection was revised to 4.7%-5.1% in H1FY19 and 4.4% in H2FY19, from earlier projections of 5.1%-5.6% in H1FY19 and 4.5%-4.6% in H2FY19, including the HRA impact. On the economic growth front the RBI projected GDP growth to be in the range of 7.3%-7.4% in H1FY19 and 7.3%-7.6% in H2FY19; from earlier projections of 7.4%-7.5% in H1FY19 and 7.3%-7.4% in H2FY19. Revision of inflation projection on the lower side faded market expectations of interest rate hike in the near term.Domestic government bonds continued to remain volatile during the period and closed on a positive note. Yield on the benchmark 10 year G-sec 7.17% 2028 bond closed at 7.47% on 12 April 2018 compared to 7.65% as of 13 March 2018; after declining to a level of 7.13% during the period. G-secs began the period with positive momentum, tracking decline in US treasury yields and international crude oil prices. However higher Current Account Deficit Numbers (CAD) for Q3FY18 and caution ahead of the US Federal Open Market Committee’s (FOMC) monetary policy meeting prevented yields from declining further. Bond yields declined, as the monetary policy outcome of the US was largely in line with expectations; wherein the US Fed increased the Federal Funds’ rate by 25 bps, thus revising the range of Federal funds’ rate to 1.50%-1.75%. The rally in the bond markets continued with release of government’s borrowing calendar for H1FY19, which showed the government plans to borrow R2.88 trillion in the H1FY19, which is about 47.6% of the total gross borrowing of R6.06 trillion for entire FY19. Over the last few years the government had been borrowing about 60%-65% of the total gross borrowing in the first half of the financial year. Thus, lower borrowings for H1FY19, led to positive sentiments, as it could mean favourable demand / supply dynamics for G-secs. To add to the positive sentiments, the RBI announced a measure allowing banks to spread the mark to mark losses in their G-sec portfolio; wherein banks have the option to spread mark to market (MTM) losses on G-sec investments for the quarters ended 31 December 2017 and 31 March 2018, equally over up to four quarters. This led to positive sentiments, as market participants hoped that the move would be favorable for G-sec demand from banks. G-secs rallied further tracking the outcome of the RBI’s First Bi-monthly Monetary Policy for FY19. In another development the RBI announced that the limit for FPI (Foreign Portfolio Investors) investment in Central Government securities (G-secs) would be increased by 0.5% each year to 5.5% of outstanding stock of securities in FY19 and 6% of outstanding stock of securities in FY20. The overall limit for FPI investment in corporate bonds will be fixed at 9% of outstanding stock of corporate bonds. However, release of indicative calendar of market borrowings by state governments for Q1FY19 led the bond yields to rise again, as it showed that the states will be borrowing in the range of R1.16-1.28 trillion, higher than the same period last fiscal. Domestic inflation based on Consumer Price Index (CPI) for March 2018 came in at 4.28% YoY compared to 4.44% YoY for February 2018; declining for the third consecutive month. CPI food inflation also declined for the third month in a row, and came in at 2.81% YoY in March 2018 compared to 3.26% YoY in February 2018, bringing down the headline CPI inflation. Core CPI (inflation excluding food and fuel) continued to witness a rise in March 2018 and came in at 5.33% YoY compared to 5.11% YoY in the previous month. India’s Industrial output measured by Index of Industrial Production (IIP) for February 2018 came in lower growing at 7.1% YoY compared to 7.4% YoY in the previous month. Output in the Manufacturing sector grew by 8.7% YoY in March 2018 same as that in the previous month. Output in the Capital Goods sector, grew at 20% YoY in February 2018 compared to 14.6% YoY in January 2018. Consumer Durables sectors output grew by 7.9% YoY in February 2018 as compared to 8% YoY growth in January 2018.Future OutlookGoing forward, with the start of government’s borrowing calendar for FY19 and pick up in credit growth, the days of surplus system liquidity conditions may likely be behind us. We may see bouts of liquidity deficit with RBI coming in provide support. This increases the likelihood of Open Market Operations (OMO) purchase of G-secs by the RBI. Thus, short term rates are likely to remain range bound in the near term tracking systemic liquidity conditions.While CPI inflation has seen lower prints over the last few months; rising crude oil prices and pick up in vegetable prices following the start of summer season is likely to push inflation higher in the near term.At the longer end of the yield curve, a fair amount of uncertainty still exits, given the fact that we are in the election year, expectations of higher inflation in the first half of FY19, rising fiscal deficit and uncertain external factors. Thus, the there can be risks to the bond markets in the form of factors like trade war between US and China, rise in crude oil prices, sub normal monsoons and government not adhering to the fiscal deficit target laid out in the Union Budget FY19.

HDFC Bank FD Interest Rate (p.a.)

14 March 2018 to 12 April 2018

The above rates are for amount below R1 Cr. (There are differential rates for Senior Citizens)HDFC FD - (12-23 Months) – 7.15% (Reg. Monthly Income)

Key Rates Current 1Mth ago 6 Mth ago 1 Yr ago1 Yr G-Sec 6.52% 6.66% 6.26% 6.36%5 Yr G-Sec 7.36% 7.43% 6.69% 6.95%10 Yr G-Sec 7.47% 7.65% 6.75% 6.82%5 Yr AAA Bonds 7.84% 7.97% 7.30% 7.69%

Yields Call Rates range for Mar’17-Apr’18 High – 6.10%

Low – 5.25%

HDFC Bank Recommendation: Investments into Short Term Funds can be considered with an investment horizon of 12 months and above. Investors looking to lock in current yields can invest in Fixed Maturity Plans (FMPs). Investments into Medium Term Funds can be considered by Moderate and Conservative investors with an investment horizon of 15 months and above. Income/Duration Funds can be considered by Aggressive investors for a horizon of 24 months and above; though currently preference should be given to dynamically managed funds. Investors looking to invest with a horizon of up to 3 months can consider Liquid Funds, while Arbitrage Funds can be considered for a horizon of 3 months and above.

DEBT OVERVIEW

The G-sec yield curve shifted lower duirng the period, as yields declined across the curve. The G-sec yield curve flattened relatively as compared to the previous period. Spread between the 1 year and the 10 years G-sec declined marginally to 95 bps from about 100 bps in the previous period. Spread between the 5 and 10 years G-secs also declined to 11 bps from about 23 bps in the previous period. Spread between the 1 year and the 10 years G-sec was marginally lower at 124 bps compared to 126 bps in the previous period.

Government Securities Yield Curve

Source:-Bloomberg and in.reuters.com

Source:- in.reuters.com and ccilindia.com

Indicative Quotes July’18 - T Bill 6.11%October’18 - T Bill 6.31%

5.50

6.10

6.70

7.30

7.90

8.50

3m 6m 1Y 2Y 3Y 5Y 7Y 10Y 14 Y 30 Y

Yields

(%)

13-Mar-18 12-Apr-18

20

ICICI PRUDENTIAL MUTUAL FUND - A ROUND-UPEquity Oriented Funds and Hybrid Funds As on 28 March, 2018

Equity Funds

Name of SchemeInception

DateNAV

RReturns for

3 m 6 m 1 yr 3 yrs IncepNifty 50 Index -3.48% 3.53% 11.13% 6.62% --

S&P BSE 200 Index -4.71% 3.90% 12.02% 8.42% --

S&P BSE 500 Index -5.30% 4.25% 12.98% 9.20% --

ICICI Prudential Value Discovery Fund 16-Aug-04 139.03 -5.38% 3.57% 6.53% 7.15% 21.32%

ICICI Prudential Multicap Fund 1-Oct-94 269.19 -4.41% 5.61% 7.53% 11.28% 15.04%

ICICI Prudential Dynamic Plan 31-Oct-02 252.12 -4.00% 5.16% 10.22% 10.54% 23.29%

ICICI Prudential Focused Bluechip Equity Fund 23-May-08 38.64 -5.01% 3.70% 13.38% 10.01% 14.71%

Index Fund

Source for entire data stated above is ICRA Online Ltd. (For Disclaimer of ICRA Online Ltd, refer http://www.icraonline.com/legal/standard-disclaimer.html) Note: Return figures for all schemes are absolute for <= 1 year and compounded annualised for > 1 year. Past returns cannot be taken as an indicator of future Performance. All the NAVs and return calculations are for the Growth Oriented Plans, unless mentioned otherwise. As per SEBI circular dated September 13, 2012, fresh subscriptions/switch-ins will be accepted only under a single plan for all the schemes w.e.f from 1st October 2012.

Balanced Fund


DateNAV

RReturns for

3 m 6 m 1 yr 3 yrs IncepNifty 50 Index -3.48% 3.53% 11.13% 6.62% --ICICI Prudential Nifty Index Fund 26-Feb-02 97.22 -3.39% 3.39% 11.24% 6.97% 15.18%


DateNAV

RReturns for

3 m 6 m 1 yr 3 yrs IncepCRISIL Hybrid 35+65 - Aggressive Index -2.33% 3.11% 10.65% 9.55% --ICICI Prudential Balanced Fund 3-Nov-99 124.89 -4.06% 3.99% 10.03% 11.35% 14.70%

Debt Oriented Funds Short Term Fund


DateNAV

RReturns for

3 m 6 m 1 yr IncepCrisil Short Term Bond Fund Index 1.75% 2.30% 6.21% --ICICI Prudential Short Term Plan 25-Oct-01 36.20 1.83% 2.12% 6.21% 8.14%

Income Fund

Gilt Fund


DateNAV

RReturns for

3 m 6 m 1 yr IncepCrisil Composite Bond Fund Index 1.47% 0.59% 5.17% --ICICI Prudential Long Term Plan 20-Jan-10 21.68 2.19% 1.25% 6.35% 9.91%


DateNAV

RReturns for

3 m 6 m 1 yr IncepICICI Prudential Long Term Gilt Fund 19-Aug-99 59.72 2.80% 0.02% 5.43% 10.07%

Liquid / Ultra Short Term Funds Name of Scheme

Inception Date

NAVR

Returns for 7 d 1 m 3 m 6 m

Crisil Liquid Fund Index 0.19% 0.67% 1.81% 3.41%ICICI Prudential Liquid Plan 18-Nov-05 256.23 0.21% 0.64% 1.76% 3.36%ICICI Prudential Flexible Income Plan 27-Sep-02 333.14 0.33% 0.91% 1.91% 3.21%

21

KOTAK MUTUAL FUND - A ROUND-UP

Source for entire data stated above is ICRA Online Ltd. (For Disclaimer of ICRA Online Ltd, refer http://www.icraonline.com/legal/standard-disclaimer.html) Note: Return figures for all schemes are absolute for <= 1 year and compounded annualised for > 1 year. Past returns cannot be taken as an indicator of future performance.All the NAVs and return calculations are for the Growth Oriented Plans, unless mentioned otherwise. As per SEBI circular dated September 13, 2012, fresh subscriptions/switch-ins will be accepted only under a single plan for all the schemes w.e.f from 1st October 2012.

Equity Oriented Funds and Hybrid Funds As on 28 March, 2018

Equity Funds


DateNAV

RReturns for

3 m 6 m 1 yr 3 yrs IncepNifty 50 Index -3.48% 3.53% 11.13% 6.62% --

Nifty 500 Index -5.55% 4.15% 12.64% 9.17% --

Nifty 200 Index -4.88% 3.92% 11.92% 8.28% --

S&P BSE MidSmallCap Index -10.52% 5.65% 17.79% 15.60% --

Kotak Opportunities Fund 9-Sep-04 111.37 -6.62% 1.70% 10.40% 11.15% 19.46%

Kotak Select Focus Fund 11-Sep-09 31.82 -4.98% 2.21% 11.66% 12.35% 14.50%

Kotak 50 Fund 4-Feb-03 214.66 -4.77% 3.43% 10.09% 8.03% 22.66%

Kotak Emerging Equity Fund 30-Mar-07 38.99 -6.65% 6.23% 13.11% 15.69% 13.16%

Index Fund

Balanced Fund


DateNAV

RReturns for

3 m 6 m 1 yr 3 yrs IncepNifty 50 Index -3.48% 3.53% 11.13% 6.62% --Kotak Nifty ETF 2-Feb-10 102.65 -3.15% 3.98% 12.48% 7.93% 10.04%


DateNAV

RReturns for

3 m 6 m 1 yr 3 yrs IncepCRISIL Hybrid 35+65 - Aggressive Index -2.33% 3.11% 10.65% 9.55% --Kotak Balance Fund 5-Nov-14 23.81 -4.37% 4.00% 7.28% 8.84% 9.12%

Debt Oriented Funds Short Term Fund


DateNAV

RReturns for

3 m 6 m 1 yr IncepCrisil Short Term Bond Fund Index 1.75% 2.30% 6.21% --Kotak Bond Short Term Plan 2-May-02 32.42 1.64% 2.05% 5.61% 7.67%

Income Fund

Gilt Fund


DateNAV

RReturns for

3 m 6 m 1 yr IncepCrisil Composite Bond Fund Index 1.47% 0.59% 5.17% --Kotak Bond Fund 25-Nov-99 47.54 1.43% -0.46% 2.67% 8.87%


DateNAV

RReturns for

3 m 6 m 1 yr IncepKotak Gilt - Investment Regular Plan 29-Dec-98 58.24 1.91% -0.78% 3.01% 9.58%

Liquid / Ultra Short Term Funds


DateNAV

R Returns for

7 d 1 m 3 m 6 mCrisil Liquid Fund Index 0.19% 0.67% 1.81% 3.41%Kotak Liquid Scheme 4-Nov-03 3511.00 0.20% 0.62% 1.75% 3.35%Kotak Treasury Advantage Fund 13-Aug-04 27.78 0.22% 0.77% 1.77% 3.12%

22

MUTUAL FUNDS-A ROUND-UP OF EQUITY ORIENTED FUNDSEquity Funds As on 28 March, 2018

Funds Recommended based on Long Term Trends

Name of Scheme Inception Date

NAVr

Returns for 3 m 6 m 1 yr 3 yrs 5 yrs Incep

S&P BSE Sensex Index -2.60% 5.39% 12.10% 6.27% 11.84% --Nifty 50 Index -3.48% 3.53% 11.13% 6.62% 12.21% --S&P BSE 200 Index -4.71% 3.90% 12.02% 8.42% 14.13% --Nifty 500 Index -5.55% 4.15% 12.64% 9.17% 14.95% --Nifty Midcap 100 Index -10.64% 4.55% 10.11% 13.72% 20.43% --Large and Flexi Cap Funds

Aggressive FundsMotilal Oswal Multicap 35 Fund (1) 28-Apr-14 26.30 -3.15% 4.07% 16.40% 16.12% -- 28.00%DSP BlackRock Equity Opportunities Fund (2) 16-May-00 211.55 -8.60% 3.22% 12.39% 13.27% 20.30% 18.62%Invesco India Contra Fund 11-Apr-07 44.94 -5.59% 10.34% 20.35% 13.47% 23.02% 14.68%Aditya Birla Sun Life Equity Fund 27-Aug-98 688.39 -5.69% 0.99% 11.33% 12.96% 22.18% 24.10%Aditya Birla Sun Life Advantage Fund 24-Feb-95 405.56 -9.55% -2.77% 11.42% 12.05% 22.52% 18.34%Axis Focused 25 Fund 29-Jun-12 25.15 -4.70% 4.01% 20.16% 12.46% 17.38% 17.40%ICICI Prudential Multicap Fund 1-Oct-94 269.19 -4.41% 5.61% 7.53% 11.28% 19.10% 15.04%Kotak Select Focus Fund 11-Sep-09 31.82 -4.98% 2.21% 11.66% 12.35% 21.16% 14.50%Franklin India High Growth Companies Fund 26-Jul-07 37.70 -8.92% 4.72% 10.13% 8.88% 22.29% 13.23%

Conservative FundsSBI Magnum Multi Cap Fund 29-Sep-05 45.96 -5.38% 4.07% 14.84% 13.44% 21.08% 12.97%Tata Equity P/E Fund 29-Jun-04 134.31 -4.19% 3.33% 16.23% 15.16% 24.11% 20.79%HDFC Capital Builder Fund 1-Feb-94 284.52 -5.67% 7.87% 16.77% 13.17% 20.31% 14.86%IDFC Classic Equity Fund 9-Aug-05 43.86 -5.33% 4.39% 14.71% 11.29% 15.75% 12.41%SBI Bluechip Fund 14-Feb-06 37.22 -3.85% 4.55% 12.09% 10.22% 18.16% 11.45%L&T India Special Situations Fund 22-May-06 48.08 -6.13% 4.97% 15.43% 11.01% 19.02% 14.16%ICICI Prudential Dynamic Plan 31-Oct-02 252.12 -4.00% 5.16% 10.22% 10.54% 17.92% 23.29%Kotak Opportunities Fund 9-Sep-04 111.37 -6.62% 1.70% 10.40% 11.15% 19.26% 19.46%Franklin India Prima Plus Fund 29-Sep-94 563.43 -5.26% 3.44% 9.37% 8.99% 18.83% 18.71%Tata Equity Opportunities Fund 25-Feb-93 188.51 -7.05% 2.93% 10.54% 8.23% 17.43% 12.41%Aditya Birla Sun Life Frontline Equity Fund 30-Aug-02 209.23 -5.71% 0.97% 9.61% 9.12% 17.18% 21.54%

Mid Cap oriented FundsL&T Midcap Fund 9-Aug-04 138.99 -7.62% 3.76% 21.04% 18.13% 29.76% 21.28%Aditya Birla Sun Life Pure Value Fund 27-Mar-08 60.25 -10.55% 4.53% 19.28% 17.94% 28.82% 19.66%HDFC Mid-Cap Opportunities Fund 25-Jun-07 55.46 -7.44% 5.34% 14.01% 15.30% 26.31% 17.25%SBI Magnum Midcap Fund 29-Mar-05 79.22 -8.22% 4.73% 9.34% 12.53% 26.35% 17.25%Kotak Emerging Equity Scheme 30-Mar-07 38.99 -6.65% 6.23% 13.11% 15.69% 26.57% 13.16%

Arbitrage Funds Name of Scheme Inception

DateNAV

rReturns for

3 m 6 m 1 yr 3 yrs 5 yrs IncepL&T Arbitrage Opportunities Fund 30-Jun-14 12.80 1.57% 3.04% 6.29% 6.49% -- 6.80%Kotak Equity Arbitrage Fund 29-Sep-05 24.86 1.69% 3.12% 6.31% 6.55% 7.48% 7.56%ICICI Prudential Equity - Arbitrage Fund 30-Dec-06 23.00 1.60% 2.92% 5.87% 6.44% 7.42% 7.69%DHFL Pramerica Arbitrage Fund - Regular 27-Aug-14 12.65 1.58% 2.87% 6.15% 6.48% -- 6.78%

Funds recommended based on Emerging Trends Name of Scheme Inception

DateNAV

rReturns for

3 m 6 m 1 yr 3 yrs 5 yrs IncepHDFC Equity Fund 1-Jan-95 591.57 -8.95% 3.06% 10.16% 8.80% 16.88% 19.18%Indiabulls Blue Chip Fund 10-Feb-12 19.62 -3.49% 5.14% 14.54% 10.28% 14.08% 11.62%UTI Balanced Fund 20-Jan-95 165.04 -4.88% 2.23% 9.55% 9.53% 14.36% 15.76%

Source for entire data stated above is ICRA Online Ltd. (For Disclaimer of ICRA Online Ltd, refer http://www.icraonline.com/legal/standard-disclaimer.html)Note: Return figures for all schemes are absolute for <= 1 year and compounded annualised for > 1 year. Past returns cannot be taken as an indicator of future performance.All the NAVs and return calculations are for the Growth Oriented Plans, unless mentioned otherwise.

(1) Erstwhile - Motilal Oswal MOSt Focused Multicap 35 Fund, (2) Erstwhile - DSP BlackRock Opportunities Fund

23

MUTUAL FUNDS-A ROUND-UP OF EQUITY ORIENTED FUNDSBalanced Funds As on 28 March, 2018

Equity Linked Saving Schemes


NAVr

Returns for

3 m 6 m 1 yr 3 yrs 5 yrs Incep

Nifty 50 Index -3.48% 3.53% 11.13% 6.62% 12.21% --

Nifty 500 Index -5.55% 4.15% 12.64% 9.17% 14.95% --

S&P BSE Sensex Index -2.60% 5.39% 12.10% 6.27% 11.84% --

IDFC Tax Advantage (ELSS) Fund 26-Dec-08 56.34 -4.95% 7.28% 24.89% 12.77% 21.76% 20.53%

L&T Tax Advantage Fund 27-Feb-06 54.07 -5.45% 4.04% 18.04% 13.75% 19.66% 14.98%

Tata India Tax Savings Fund (Div) 31-Mar-96 63.89 -8.53% 2.71% 16.12% 12.94% 20.68% 19.72%

DSP BlackRock Tax Saver Fund 18-Jan-07 44.60 -8.19% 1.35% 10.43% 12.31% 20.61% 14.28%

Aditya Birla Sun Life Tax Relief 96 Fund 6-Mar-08 30.51 -5.25% 7.20% 20.98% 12.79% 22.62% 11.72%

Axis Long Term Equity Fund 29-Dec-09 40.32 -2.57% 4.85% 17.62% 9.68% 23.27% 18.42%

Franklin India Taxshield Fund 10-Apr-99 530.07 -5.67% 2.34% 8.93% 8.24% 18.30% 23.27%

Kotak Taxsaver Fund 23-Nov-05 39.83 -7.39% 1.29% 7.47% 8.86% 16.89% 11.84%



NAVr

Returns for 3 m 6 m 1 yr 3 yrs 5 yrs Incep

CRISIL Hybrid 35+65 - Aggressive Index -2.33% 3.11% 10.65% 9.55% 13.46% --

Aggressive Funds

ICICI Prudential Balanced Fund 3-Nov-99 124.89 -4.06% 3.99% 10.03% 11.35% 18.08% 14.70%

DSP BlackRock Equity & Bond Fund (1) 27-May-99 142.43 -5.64% 2.78% 9.57% 10.65% 16.38% 15.13%

HDFC Prudence Fund 1-Feb-94 485.08 -7.10% 1.98% 7.48% 9.63% 16.86% 18.70%

Aditya Birla Sun Life Balanced 95 Fund 10-Feb-95 737.01 -4.29% 1.59% 9.33% 9.99% 17.29% 20.42%

Conservative Funds

L&T India Prudence Fund 7-Feb-11 25.57 -3.17% 2.67% 11.62% 10.33% 18.70% 14.06%

SBI Magnum Balanced Fund 9-Oct-95 122.79 -4.03% 4.68% 14.25% 9.53% 17.62% 16.00%

HDFC Balanced Fund 11-Sep-00 145.80 -3.55% 4.09% 12.57% 11.17% 19.17% 16.49%

Equity Savings Funds


NAVr

Equity Exposure

Arbitrage Exposure

Returns for

3 m 6 m 1 yr Incep

70% Nifty 50 Index & 30% Crisil Liquid Fund Index -1.89% 3.49% 9.85% --

Kotak Equity Savings Fund 13-Oct-14 13.20 24.74% 35.08% -0.62% 2.62% 8.74% 8.35%

HDFC Equity Savings Fund 17-Sep-04 34.55 30.15% 35.80% -1.65% 2.04% 7.11% 9.59%

DSP BlackRock Equity Savings Fund 28-Mar-16 12.25 31.41% 36.17% -1.27% 2.54% 8.07% 10.69%

Aditya Birla Sun Life Equity Savings Fund 28-Nov-14 12.93 33.36% 31.62% -2.05% 0.39% 6.16% 8.02%

Source for entire data stated above is ICRA Online Ltd. (For Disclaimer of ICRA Online Ltd, refer http://www.icraonline.com/legal/standard-disclaimer.html) All the NAVs and return calculations are for the Growth Oriented Plans, unless mentioned otherwise. Equity Oriented Scheme recommendations have been made based on the methodology, which assigns weightages to parameters like FAMA, Sharpe Ratio, Sortino Ratio, Corpus, Past Performance, Beta and Volatility. As per SEBI circular dated September 13, 2012, fresh subscriptions/switch-ins will be accepted only under a single plan for all the schemes w.e.f from 1st October 2012.

(1) Erstwhile - DSP BlackRock Balanced Fund

24

MUTUAL FUNDS-A ROUND-UP OF DEBT ORIENTED FUNDS Income Funds As on 28 March, 2018



DateNAV

RReturns for

3 m 6 m 1 yr 3 yr IncepCrisil Composite Bond Fund Index 1.47% 0.59% 5.17% 8.21% --Crisil Short Term Bond Fund Index 1.75% 2.30% 6.21% 7.97% --Aggressive FundsICICI Prudential Long Term Plan 20-Jan-10 21.68 2.19% 1.25% 6.35% 8.96% 9.91%SBI Dynamic Bond Fund 9-Feb-04 21.27 0.49% -0.77% 3.29% 7.55% 5.48%Aditya Birla Sun Life Income Plus 21-Oct-95 75.96 1.12% -0.64% 3.78% 6.50% 9.45%UTI Bond Fund 4-May-98 52.04 1.72% 0.22% 4.34% 7.61% 8.64%IDFC Super Saver Income Fund - Investment Plan 14-Jul-00 41.26 1.12% -0.98% 2.20% 6.64% 8.33%Conservative FundsICICI Prudential Dynamic Bond Fund 12-Jun-09 19.82 2.01% 0.80% 5.65% 8.31% 8.08%Sundaram Flexible Fund - Flexible Income Plan 30-Dec-04 24.39 1.34% 0.94% 5.91% 7.95% 6.96%ICICI Prudential Income Opportunities Fund 18-Aug-08 24.27 1.42% 1.19% 5.86% 7.83% 9.66%UTI Dynamic Bond Fund 23-Jun-10 20.05 1.80% 0.54% 4.61% 8.43% 9.37%BNP Paribas Flexi Debt Fund 23-Sep-04 29.65 1.27% 0.05% 4.36% 7.16% 8.37%Tata Dynamic Bond Fund 3-Sep-03 26.37 0.98% -0.21% 3.97% 6.86% 6.88%


DateNAV

RReturns for

3 m 6 m 1 yr 3 yr IncepCRISIL Hybrid 85+15 - Conservative Index 0.60% 1.19% 6.45% 8.59% --Aggressive FundsAxis Income Saver Fund 16-Jul-10 18.45 -0.03% 2.81% 8.10% 6.70% 8.28%Aditya Birla Sun Life MIP II - Wealth 25 Plan 22-May-04 38.22 -1.94% -0.40% 6.89% 9.61% 10.16%IDFC Monthly Income Plan 25-Feb-10 20.27 -1.18% 0.83% 4.81% 7.21% 9.13%Kotak Monthly Income Plan 2-Dec-03 29.63 -0.54% 1.54% 6.32% 8.51% 7.87%HDFC MF Monthly Income Plan - Long Term Plan 26-Dec-03 43.21 -2.24% 0.49% 4.96% 8.00% 10.81%Conservative FundsHDFC Multiple Yield Fund - Plan 2005 17-Aug-05 31.03 -0.69% 3.44% 7.56% 8.17% 9.39%

Gilt FundsRecommended Funds based on Long Term Trends

Monthly Income Plans Funds Recommended based on Long Term Trends


DateNAV

RReturns for

3 m 6 m 1 yr 3 yr IncepSBI Magnum Gilt Fund Long Term Plan 30-Dec-00 38.11 0.63% -1.14% 3.20% 8.05% 8.06%UTI Gilt Advantage Fund - Long Term Plan 21-Jan-02 38.11 1.49% -0.72% 3.13% 8.06% 8.61%ICICI Prudential Long Term Gilt Fund 19-Aug-99 59.72 2.80% 0.02% 5.43% 8.24% 10.07%IDFC Government Securities Fund - Investment Plan 3-Dec-08 20.29 1.22% -1.42% 1.90% 6.90% 7.88%Tata Gilt Securities Fund 6-Sep-99 49.78 1.47% -1.65% 3.17% 6.51% 9.03%

Source for entire data stated above is ICRA Online Ltd. (For Disclaimer of ICRA Online Ltd, refer http://www.icraonline.com/legal/standard-disclaimer.html) As per SEBI circular dated September 13, 2012, fresh subscriptions/switch-ins will be accepted only under a single plan for all the schemes w.e.f from 1st October 2012. Note: Return figures for all schemes are absolute for <= 1 year and compounded annualised for > 1 year. Past returns cannot be taken as an indicator of future performance.Debt Oriented Scheme recommendations have been made based on the methodology, which assigns weightages to parameters like Sharpe Ratio, Performance Consistency, Corpus, Past Performance, Expenses, Credit Risk and Volatility. All the NAVs and return calculations are for the Growth Oriented Plans, unless mentioned otherwise.

25

MUTUAL FUNDS-A ROUND-UP OF DEBT ORIENTED FUNDS

Funds Recommended based on Long Term Trends Short Term Funds As on 28 March, 2018


NAVR

Returns for 3 m 6 m 1 yr 3 yr Incep

Crisil Liquid Fund Index 1.81% 3.41% 6.86% 7.37% --Crisil Composite Bond Fund Index 1.47% 0.59% 5.17% 8.21% --Crisil Short Term Bond Fund Index 1.75% 2.30% 6.21% 7.97% --

Aggressive FundsUTI Banking & PSU Debt Fund 3-Feb-14 14.23 1.74% 2.79% 6.68% 8.74% 8.87%HDFC Medium Term Opportunities Fund 29-Jun-10 19.31 1.85% 2.30% 6.82% 8.38% 8.86%ICICI Prudential Banking & PSU Debt Fund 1-Jan-10 19.97 2.12% 2.05% 6.66% 8.82% 8.75%Sundaram Banking & PSU Debt Fund 30-Dec-04 27.25 1.85% 2.08% 6.43% 7.43% 7.85%Aditya Birla Sun Life Treasury Optimizer Plan 2-May-08 221.46 1.78% 2.13% 6.48% 8.49% 8.35%ICICI Prudential Short Term Plan 25-Oct-01 36.20 1.83% 2.12% 6.21% 8.20% 8.14%HDFC Regular Savings Fund 28-Feb-02 34.43 1.74% 2.40% 6.37% 8.44% 7.99%Conservative FundsHDFC Short Term Opportunities Fund 25-Jun-10 19.17 1.86% 2.79% 6.72% 8.02% 8.75%Aditya Birla Sun Life Short Term Fund 3-Mar-97 66.41 1.84% 2.56% 6.80% 8.34% 9.40%SBI Short Term Debt Fund 27-Jul-07 20.03 1.81% 2.33% 6.14% 7.78% 6.72%IDFC Super Saver Income Fund - Short Term Plan 14-Dec-00 35.35 1.75% 2.33% 6.13% 7.50% 7.57%UTI Short Term Income Fund 18-Sep-07 21.12 1.58% 2.21% 6.09% 7.95% 7.36%Axis Short Term Fund 22-Jan-10 18.85 1.74% 2.36% 6.18% 7.74% 8.05%

Liquid Funds


NAVR

Returns for 7d 1 m 3 m 6 m 1yr

Crisil Liquid Fund Index 0.19% 0.67% 1.81% 3.41% 6.86%Aggressive FundsAxis Liquid Fund 9-Oct-09 1919.53 0.20% 0.63% 1.76% 3.39% 6.83%Indiabulls Liquid Fund 25-Oct-11 1688.67 0.16% 0.59% 1.72% 3.34% 6.78%UTI-Liquid Cash Plan 10-Dec-03 2835.22 0.21% 0.63% 1.75% 3.36% 6.79%DHFL Pramerica Insta Cash Plus Fund 4-Sep-07 224.85 0.16% 0.59% 1.72% 3.33% 6.77%Kotak Liquid Scheme 4-Nov-03 3511.00 0.20% 0.62% 1.75% 3.35% 6.77%ICICI Prudential Liquid Plan 18-Nov-05 256.23 0.21% 0.64% 1.76% 3.36% 6.77%Aditya Birla Sun Life Cash Plus 29-Mar-04 278.02 0.19% 0.61% 1.74% 3.36% 6.79%Conservative FundsBaroda Pioneer Liquid Fund 5-Feb-09 1988.25 0.22% 0.64% 1.77% 3.39% 6.81%HSBC Cash Fund 1-Jun-04 1725.52 0.17% 0.60% 1.72% 3.35% 6.78%Tata Money Market Fund 1-Sep-04 2725.37 0.19% 0.62% 1.74% 3.36% 6.79%L&T Liquid Fund 3-Oct-06 2374.43 0.18% 0.60% 1.73% 3.36% 6.79%Invesco India Liquid Fund 17-Nov-06 2382.33 0.18% 0.61% 1.73% 3.35% 6.78%IDFC Cash Fund 9-Jun-08 2102.24 0.19% 0.61% 1.74% 3.35% 6.73%

Ultra Short Term Funds


NAVR

Returns for 7 d 1 m 3 m 6 m 1yr

Crisil Liquid Fund Index 0.19% 0.67% 1.81% 3.41% 6.86%Crisil Short Term Bond Fund Index 0.46% 1.18% 1.75% 2.30% 6.21%Aggressive FundsAxis Banking & PSU Debt Fund 8-Jun-12 1603.31 0.32% 0.90% 1.89% 3.30% 7.25%HDFC Floating Rate Income Fund - Short Term Plan 23-Oct-07 30.23 0.36% 0.99% 1.91% 3.25% 7.04%Aditya Birla Sun Life Savings Fund 15-Apr-03 341.71 0.28% 0.88% 1.90% 3.27% 7.37%IDFC Ultra Short Term Fund 17-Jan-06 24.61 0.29% 0.88% 1.88% 3.18% 6.99%ICICI Prudential Flexible Income Plan 27-Sep-02 333.14 0.33% 0.91% 1.91% 3.21% 7.15%Aditya Birla Sun Life Floating Rate Fund - Long Term Plan 24-Mar-09 212.61 0.27% 0.88% 1.83% 3.11% 7.09%Conservative FundsUTI Treasury Advantage Fund 23-Apr-07 2395.10 0.26% 0.79% 1.79% 3.23% 6.97%SBI Ultra Short Term Debt Fund 27-Jul-07 2241.79 0.33% 0.88% 1.90% 3.26% 6.83%L&T Ultra Short Term Fund 10-Apr-03 28.35 0.29% 0.88% 1.83% 3.21% 6.89%Tata Ultra Short Term Fund 6-Sep-05 2632.47 0.26% 0.81% 1.82% 3.17% 6.93%DSP BlackRock Low Duration Fund (1) 10-Mar-15 12.61 0.31% 0.89% 1.86% 3.12% 6.78%Kotak Treasury Advantage Fund 13-Aug-04 27.78 0.22% 0.77% 1.77% 3.12% 6.80%Axis Treasury Advantage Fund 9-Oct-09 1936.53 0.31% 0.91% 1.94% 3.29% 6.74%

Source for entire data stated above is ICRA Online Ltd. (For Disclaimer of ICRA Online Ltd, refer http://www.icraonline.com/legal/standard-disclaimer.html) All the NAVs and return calculations are for the Growth Oriented Plans, unless mentioned otherwise. (1) Erstwhile - DSP BlackRock Ultra Short Term Fund

26

Debt Market Round-upDomestic banking system liquidity conditions turned volatile during the above mentioned period. While year-end demand for funds, pick up in credit growth and rise in Currency in Circulation led to liquidity tightness; RBI’s liquidity support measure in the form of additional longer term variable rate repo auctions and maturity of T-bills issued under Market Stabilization Scheme (MSS) led the liquidity conditions to ease. The daily average banking liquidity as measured by the RBI’s Liquidity Adjustment Facility (LAF) was at a deficit of ~R56 bn compared to deficit of ~R171 bn in the previous period.

MARKET OVERVIEW: 14 MARCH 2018 - 12 APRIL 2018 Equity Market Round-upIndian markets witnessed sharp volatility during the above-mentioned period and ended on a marginally positive note with the S&P BSE Sensex and Nifty 50 ending with a gain of 0.7% MoM and 0.3% MoM, respectively. The S&P BSE Midcap index and the S&P BSE Smallcap index also followed suit and rose by 2.0% MoM and 1.9% MoM, respectively. On the sectoral indices front, the S&P BSE Consumer Durable index and S&P BSE Auto index were the top performing indices as they rose by 5.0% MoM and 3.2% MoM, respectively. The S&P BSE Realty index and S&P BSE Oil&Gas index were top underperformers as they fell by 6.7% MoM and 5.9% MoM, respectively. During the month of March 2018, Foreign Portfolio Investors (FPI) were net buyer to the tune of ~R117 bn and Domestic Institutional Investors (DII) were net buyers to the tune of ~R75 bn.

During the above-mentioned period, volatility was witnessed across global markets due to wavering news flow on import tariff spat between the US and China, rising crude oil prices, volatility in US bond yields and fresh concerns of geo-political tensions between US and Russia. Amid negative global factors, domestic markets were positive on the back of positive view on GDP and inflation by RBI, news on better monsoon forecast and positive economic data. Going ahead, Indian markets are likely to track upcoming Q4FY18 earnings announcement, results of state elections and global news flow.

The US market ended the period on a negative note with S&P 500 and Dow Jones indices declining by 3.7% MoM and 2.1% MoM, respectively, due to volatility in bond yields indicating faster interest rate hike and rising concerns over tariff war and geo-political tensions in global markets. On the data front, the consumer prices in the US fell for the first time in 10 months in March, weighed down by a decline in the cost of gasoline. However, the minutes from the Federal Open Market Committee’s (FOMC) March meeting showed that all members of the committee see the U.S. economy growing at a strong pace and see inflation climbing, which would justify more rate hikes. Given the FOMC’s positive outlook on economy and inflation trajectory along with prevailing issue related to trade wars and geo-political tensions, the US markets are likely to see more volatility in the coming months both in bond as well as equity markets.

The domestic macro-economic data points were largely positive during the above-mentioned period. As per the provisional data released by CBDT, net direct tax collections for FY18 stood at R9.95 trillion, up by 17.1% YoY. The combined index of the eight-core industries rose by 5.3% YoY in Feb’18 compared to 6.1% YoY in Jan’18. The RBI kept the key policy rates unchanged, Repo rate at 6.0% and CRR at 4%. Index of Industrial Production (IIP) grew by 7.1% YoY (provisional) in Feb’18, against 1.2% YoY growth in Feb’17. The Centre’s fiscal deficit upto Feb’18 touched 120.3% of the FY18RE, compared to 113.4% during same period of last fiscal. As per Skymet, southwest monsoon would be normal this year and predicted monsoon to be 100% of Long Period Average.

The corporate earnings in Q3FY18 had ended on a positive note and a visible improvement was seen during the quarter. The improvement in the topline numbers was mainly because of lower base of Q3FY17 (due to impact of demonetization) and a gradual recovery post implementation of GST. The net sales of companies in CNX 200 index grew by 9.6% YoY and Reported PAT growth stood at 11.8% YoY in Q3FY18. The improvement seen in Q3FY18 is likely to continue in Q4FY18 on the back of improvement in micro level fundamentals like improving rural demand, steady growth in urban demand and gradual acceleration in capex activity especially in private sector. We think that the trend of organized sector gaining share from the unorganized sector would continue to gain traction in the new GST regime, which is likely to help improve corporate earnings further in the medium term, along with structural rise in the consumption demand in the domestic market and steady improvement in global growth.

As per the fund managers, equity markets may remain volatile in the near term on back of movement in oil prices, geopolitical issues and revenue collection from GST. However, the fund managers believe that expected pickup in consumption demand, various reforms by the government, expanding Return on Equity (ROE) for Indian corporates, expected improvement in India’s GDP growth and optimism over the global growth creates positive outlook for Indian equities with long-term perspective.

Investment Strategy: We continue to remain positive on the long-term outlook on the Indian equity markets and believe that investors should invest into equities in line with their risk profile. We recommend investors to look at a mix of Large-Cap, Balance funds and Equity Savings Fund for fresh investments with an investment horizon of 2-3 yrs. The investment strategy should be 50% lumpsum and rest should be staggered over the next 5-6 months.

In the first Bi-monthly Monetary Policy for FY19, the RBI maintained status quo on the interest rates, which was in line with expectations. However, the RBI revised the CPI inflation projections on the lower side for FY19. The CPI inflation projection was revised to 4.7%-5.1% in H1FY19 and 4.4% in H2FY19, from earlier projections of 5.1%-5.6% in H1FY19 and 4.5%-4.6% in H2FY19, including the HRA impact. On the economic growth front the RBI projected GDP growth to be in the range of 7.3%-7.4% in H1FY19 and 7.3%-7.6% in H2FY19; from earlier projections of 7.4%-7.5% in H1FY19 and 7.3%-7.4% in H2FY19. Domestic G-secs continued to remain volatile during the period and closed on a positive note. Yield on the benchmark 10 year G-sec 7.17% 2028 bond closed at 7.47% on 12 April 2018 compared to 7.65% as of 13 March 2018; after declining to a level of 7.13% during the period. G-secs began the period with positive momentum, tracking decline in US treasury yields and international crude oil prices. However higher Current Account Deficit Numbers (CAD) for Q3FY18 and caution ahead of the US Federal Open Market Committee’s (FOMC) monetary policy meeting prevented yields from declining further. Bond yields declined, as the monetary policy outcome of the US was largely in line with expectations; wherein the US Fed increased the Federal Funds’ rate by 25 bps. The rally in the bond markets continued as the government’s borrowing calendar for H1FY19, showed the it plans to borrow R2.88 trillion in the H1FY19, which is about 47.6% of the total gross borrowing for FY19, lower than the past few years. Lower government borrowings for H1FY19, led to positive sentiments in the bond markets. Additionally, the RBI announced a measure for banks; wherein banks would have the option to spread the mark to market (MTM) losses on their G-sec investments for the quarters ended 31 December 2017 and 31 March 2018, equally over up to four quarters. This led to hopes, that the move could be favorable, for G-sec demand from banks. G-secs rallied further tracking the outcome of the RBI’s First Bi-monthly Monetary Policy for FY19. In another development the RBI increased the limits for FPI (Foreign Portfolio Investors) investment in Central Government securities (G-secs) by 0.5% each year to 5.5% of outstanding stock of securities in FY19 and 6% of outstanding stock of securities in FY20. The limit for FPI investment in corporate bonds was fixed at 9% of outstanding stock of corporate bonds. However, release of indicative calendar of market borrowings by state governments for Q1FY19, led the bond yields to rise again, as it showed that the states will be borrowing in the range of R1.16-1.28 trillion, higher than the same period last fiscal. Domestic inflation based on Consumer Price Index (CPI) for March 2018 came in at 4.28% YoY compared to 4.44% YoY for February 2018; declining for the third consecutive month. CPI food inflation also declined for the third month in a row, and came in at 2.81% YoY in March 2018 compared to 3.26% YoY in February 2018, bringing down the headline CPI inflation. Core CPI (inflation excluding food and fuel) continued to witness a rise in March 2018 and came in at 5.33% YoY compared to 5.11% YoY in the previous month. Most of the fixed income fund managers are of the view, that while lower government borrowing for H1FY19 and RBI’s measure for banks to spread their G-sec investment losses, are near term positives for bond markets, they continue to maintain a cautious stance. The fund managers believe that risks on account of variables like impact MSP (Minimum Support Price) hikes, progress of monsoon, developments in government’s fiscal deficit, international crude oil prices and global geopolitical tensions need to be watched very carefully. Investment Strategy: Investments into Short Term Funds can be considered with an investment horizon of 12 months and above. Investors looking to lock in current yields can invest in Fixed Maturity Plans (FMPs). Investments into Medium Term Funds can be considered by Moderate and Conservative investors with an investment horizon of 15 months and above. Income/Duration Funds can be considered by Aggressive investors for a horizon of 24 months and above; though currently preference should be given to dynamically managed funds. Investors looking to invest with a horizon of up to 3 months can consider Liquid Funds, while Arbitrage Funds can be considered for a horizon of 3 months and above.

Source for entire data stated above is ICRA Online Ltd. (For Disclaimer of ICRA Online Ltd, refer http://www.icraonline.com/legal/standard-disclaimer.html)

Note:- The returns chart shown above is as on 12 April 2018

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Note:- The returns chart shown above is as on 12 April 2018

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28

MUTUAL FUND SYNOPSIS - EQUITY FUNDS AS ON 28 MARCH, 2018DSP BlackRock Equity Opportunities Fund - Strategy & ViewFund Manager: Rohit Singhania

The fund is a large & mid cap equity fund that invests across market capitalization with a large cap bias. The weightage of large cap stocks in the fund, historically, has been greater than 65% of the portfolio. As a stock selection process, the fund manager applies mix of top-down and bottom-up investment approach. The fund manager may take aggressive sectoral and stock positions to maximize the fund performance without affecting the diversified nature of the fund; and generally takes exposure in highly liquid stocks. As per the fund manager, India’s Current Account Deficit (CAD) increased to USD 13.5 bn (2.0% of GDP) in Q3FY18, up from USD 8.0 bn (1.4% of GDP) in Q3FY17 due to wider trade deficit. However, some of the macroeconomic data indicated signs of improvement in economic activities. India’s GDP for Q3FY18 grew by 7.2% YoY up from 6.5% YoY growth seen in Q2FY18. Index for Industrial Production (IIP) for January 2018 also grew by 7.5% YoY on back of favourable base effect (post demonetization) and nascent economic recovery led by sequential growth in segments such as capital goods, consumer durables, cement, etc. Furthermore, for smooth implementation of E-way Bill under the GST regime, the government eased the rules to make the electronic permits required for shipping merchandise more acceptable to businesses and transporters. This would help to improve tax compliance in the country and increase revenues to the government. The fund manager believes that various steps taken by the government are likely to have favourable impact on the overall economy over the long term. As per the fund manager, equity markets may remain volatile in the near term. However, the fund manager believes that expected pickup in consumption demand, various reforms by government, expanding Return on Equity (ROE) for Indian corporates, expected boost in India’s GDP growth and optimism over the global growth create positive outlook for Indian equities with long term perspective. Currently, the fund manager is positive on Banking sector and has highest exposure in it. Apart from Banking, the other top sectoral holdings are Oil & Gas, Construction, Auto & Auto Ancillaries and Pharma. The fund manager has been maintaining high exposure towards large cap stocks. Currently, the fund has around 73% exposure in large cap stocks, around 23% exposure in mid & small cap stocks and close to 4% exposure in debt & cash. The fund is recommended for moderate & aggressive investors with an investment horizon of 2-3 years.

Aditya Birla Sun Life Equity Fund - Strategy & View Fund Manager: Anil Shah

The fund is a flexi cap equity fund that looks for opportunities without any sector or market cap bias with an aim to provide long term growth of capital. To construct the portfolio, the fund manager applies mix of top-down and bottom-up investment approach and aims to maintain diversification across various sectors and market capitalization. The fund manager uses top-down investment approach to evaluate global and Indian macro-economic scenario and accordingly overweight or underweight sectoral positions are taken. The bottom-up investment approach is used to select stocks within the selected sectors and invest in companies which have strong fundamentals, potential to generate free cash flows, low leveraged balance sheet and are available at reasonable valuations. The fund manager also looks at parameters like competitive advantage, entry barriers in business and companies which have enough installed capacity to meet the growing demand. The fund maintains high equity allocation and does not take large cash calls in the portfolio. As per the fund manager, government is working in the right direction for structural economic growth over the long term by spending higher on Infrastructure development including Roads, Railway etc. to improve connectivity and reduce transportation cost. Increase in power supply, improvement in water supply management, implementation of E-Way Bill etc would also support the overall economic growth. The fund manager is of the view that positive impact of the various policies and measures taken by government in the past is likely to be seen over the long term. As per the fund manager, Indian equity markets may remain volatile in the near term due to fallout of the recent bank-scam on the banking sector lending, sustainability of investment pick-up ahead of election season, and global risks including tighter monetary policy. However, the fund manager is positive on Indian equity markets over the medium to long term on back of optimism over the earnings growth trajectory and global growth. The fund manager is positive on Private Sector Banks and has highest exposure in Banking sector. The other top sectoral holdings are FMCG, Metals, IT and Auto & Auto Ancillaries. Currently, the fund has around 80% exposure in large cap stocks, around 13% exposure in mid & small cap stocks and close to 7% exposure in debt & cash. The portfolio of the fund is diversified across 65-70 stocks. Currently, top 10 stocks comprises of around 35% of the portfolio. The fund is recommended for moderate & aggressive investors with an investment horizon of 2-3 years.

Top Holdings as on 28 March 2018Company %HDFC Bank Ltd. 5.44ICICI Bank Ltd. 4.14State Bank of India 3.78Tata Steel Ltd. 3.04HCL Technologies Ltd. 2.45Total 18.85

Sector %

Banks & Finance 29.75

Oil & Gas, Energy 9.83

Housing & Construction 9.32

Auto & Auto Ancillaries 8.57

Pharma 6.81

Total 64.28

Debt & Cash 4.04

Top Holdings as on 28 March 2018Company %HDFC Bank Ltd. 5.76ICICI Bank Ltd. 4.82Tata Chemicals Ltd. 4.02ITC Ltd. 3.85Tata Steel Ltd. 3.24Total 21.68Sector %Banks & Finance 28.20FMCG 14.52Metals 8.37IT 6.69Auto & Auto Ancillaries 6.57Total 64.34

Debt & Cash 6.96


29

Top Holdings as on 28 March 2018Company %HDFC Ltd. 8.04Yes Bank Ltd. 6.03Power Grid Corporation of India Ltd. 4.30Zee Entertainment Enterprises Ltd. 4.10Reliance Industries Ltd. 3.83Total 26.29Sector %Banks & Finance 22.29Auto & Auto Ancillaries 15.55Oil & Gas, Energy 14.37FMCG 6.31Media 5.16Total 63.67

Debt & Cash 10.64

MUTUAL FUND SYNOPSIS - EQUITY FUNDS AS ON 28 MARCH, 2018Tata Equity P/E Fund - Strategy & ViewFund Manager: Sonam Udasi

The fund is a flexi cap equity fund that invests across sectors and market capitalization. As a stock selection process, the fund manager applies bottom-up investment approach and mainly looks at P/E ratio along with fundamental parameters. The fund follows value investment style and aims to invest at least 70% of its portfolio in companies which, at the time of investment, have a rolling twelve month P/E ratio lower than the rolling twelve month P/E ratio of the S&P BSE Sensex index. The fund focuses on buying stocks which have strong fundamentals, proven track record of management, enjoy competitive advantage with high growth potential and are trading at lower valuations. Up to 30% of the portfolio can be invested in stocks which are expected to grow at high rate. As per the fund manager, going forward consumption demand would be the key driver to support earnings growth. While rural consumption demand is expected to see gradual uptick, the urban consumption may strenthening on back of moderate food inflation and interest rates which may lead to broad-based growth in consumption demand. The fund manager is positive on Private Sector Banks on account of their ability to gain market share and maintain relatively higher growth. The fund manager is also positive on companies which are direct and indirect beneficiaries of government’s push on sectors like Road, Railways and Housing. As per the fund manager, equity market is likely to take cues from movement in crude oil prices, revenue collections from GST and FII outflows on account of major global risk-off event. However, India is much better placed to handle such situations given its stable macroeconomic condition. Considering, strong macroeconomic position, various reforms by the government, and long term structural drivers like demographic advantage, low household debt, limited penetration across different consumer segments, increased potential for financial savings and urbanisation, the fund manager is positive on Indian equity markets over the medium term. The fund has high exposure in Banking & Financial Services, Auto & Auto Ancillaries, Oil & Gas, FMCG and Media sectors. Currently, the fund has around 73% exposure in large cap stocks, around 17% exposure in mid & small cap stocks and close to 11% exposure in debt & cash. The fund is recommended for moderate & conservative investors with an investment horizon of 2-3 years.

SBI Bluechip Fund - Strategy & View Fund Manager: Sohini Andani

The fund comprises of a well-diversified portfolio of predominantly large cap stocks with steady growth potential. The fund manager has flexibility to invest up to 20% of portfolio in high conviction mid cap stocks. The fund manager applies bottom up investment approach to select stocks in the portfolio and also actively manages the sector allocation as per the prevailing market scenario. The fund manager invests in companies which have large business presence, superior track record of management and are market leaders in their respective sectors.The fund manager invests with a long term view and remains invested till the valuation objective is achieved. As per the fund manager, PAT for Nifty 50 index companies grew by 7% YoY (against the initial expectations of 13-15%) in Q3FY18. Given the current trajectory for Q4FY18, the fund manager is of the view that FY18 is likely to see seventh straight year of earnings downgrades. However, the fund manager expects the corporate profitability to improve going forward on back of improving growth and productivity (with ease of doing business, improved logistics, and simplified indirect taxes). Increased transparency, moderate interest rates and lower raw material cost (relative to the levels seen 3-4 years ago) are also likely to improve margins of Indian corporates. As per the fund manager, equity markets may remain volatile in the near term due to factors like movement in crude oil prices, fiscal and trade deficit, anticipation over monsoon, and earnings growth trajectory, as revival in earnings is the key factor to sustain current valuations. However, the fund manager is positive on equity markets over the long term as the corporate profit/ GDP ratio is at lower level and likely to improve on back of mean reversion. Furthermore, higher spending by government, waning effect of disruption due to GST, rising global growth and improved business sentiments are likely to support the earnings growth going forward. The fund manager is bullish on Private Sector Banks with selective exposure to PSU Banks that are trading at lower valuations. Apart from Banking, the fund has high exposure to Auto & Auto Ancillaries, FMCG, Construction and Pharma. Currently, the fund has around 85% exposure in large cap stocks, around 6% exposure in mid & small cap stocks and close to 10% exposure in debt & cash. The fund is recommended for moderate & conservative investors, with a 2-3 years investment horizon.


Top Holdings as on 28 March 2018

Company %

HDFC Bank Ltd. 8.36

Larsen & Toubro Ltd. 4.85

Mahindra & Mahindra Ltd. 3.77

ITC Ltd. 3.30

Nestle India Ltd. 3.17

Total 23.46

Sector %

Banks & Finance 31.01


FMCG 9.23


Pharma 6.83

Total 64.64

Debt & Cash 9.58

30

Top Holdings as on 28 March 2018Company %HDFC Bank Ltd. 4.81Bajaj Finance Ltd. 3.14Larsen & Toubro Ltd. 2.74Bajaj Finserv Ltd. 2.11ICICI Bank Ltd. 2.09Total 14.89Sector %Banks & Finance 21.67

FMCG 9.36



Capital Goods 5.12

Total 51.30

Debt & Cash 26.23

Top Holdings as on 28 March 2018Company %Housing Development Finance Corporation Ltd. 4.25

HDFC Bank Ltd. 3.46Tata Consultancy Services Ltd. 3.29Larsen & Toubro Ltd. 2.78Axis Bank Ltd. 2.45

Total 16.23

Sector %Banks & Finance 23.37

Capital Goods 7.37

IT 6.24



Total 49.08

Debt & Cash 28.86

DSP BlackRock Equity & Bond Fund - Strategy & View Fund Manager: Atul Bhole and Vikram Chopra

The fund is an aggressive hybrid fund that invests in a mix of equities, bonds and money market instruments with an objective to achieve both growth & income, while attempting to minimize volatility. The fund has the flexibility to maintain equity exposure in the range of 65% to 75% of the portfolio depending on prevailing market scenario. The equity part of the portfolio is managed as flexi cap strategy with investment across market capitalization and sectors. As a stock selection process, the fund manager applies mix of top-down and bottom-up investment approach to construct the portfolio. The debt part of the portfolio is invested in the good quality debt instruments to achieve stability in fund’s performance. As per the fund manager, India’s Current Account Deficit (CAD) increased to USD 13.5 bn (2.0% of GDP) in Q3FY18, up from USD 8.0 bn (1.4% of GDP) in Q3FY17 due to wider trade deficit. However, some of the macroeconomic data indicated signs of improvement in economic activities. India’s GDP for Q3FY18 grew by 7.2% YoY up from 6.5% YoY growth seen in Q2FY18. Also, Index for Industrial Production (IIP) for January 2018 grew by 7.5% YoY on back of favourable base effect (post demonetization) and nascent economic recovery led by sequential growth in segments such as capital goods, consumer durables, cement, etc. Furthermore, for smooth implementation of E-way Bill under the GST regime, the government eased the rules to make the electronic permits required for shipping merchandise more acceptable to businesses and transporters. This would help to improve tax compliance in the country and increase revenues to the government. The fund manager believes that various steps taken by the government are likely to have favourable impact on the overall economy over the long term. The fund manager is positive on Banks & Financial Services and has highest exposure in it. Apart from Banking, the other top sectoral holdings are FMCG, Construction, Auto & Auto Ancillaries and Capital Goods. Currently, the fund has around 74% exposure to equity and around 26% exposure to debt & cash. Within equity, the fund has around 54% exposure to large cap stocks and around 20% exposure to mid & small cap stocks. Currently, the debt portfolio of the fund has an average maturity of 3.61 years. The fund is recommended for moderate & aggressive investors with an investment horizon of 2-3 years.

L&T India Prudence Fund - Strategy & ViewFund Manager: Soumendra Nath Lahiri, Karan Desai and Shriram Ramanathan

The fund is a balanced fund that aims to generate long-term capital appreciation from a diversified portfolio of predominantly equity and equity related securities and to generate reasonable returns by investing into debt and money market instruments. The fund invests minimum 65%-75% of its corpus in equity and equity-related securities and 25%-35% in debt and money market instruments. The equity part of the portfolio is managed as flexi cap strategy and is invested across sectors and market capitalizations with higher allocation towards large cap stocks. The fund manager applies bottom up investment approach to select stocks in the portfolio. Similarly, for debt portion, the scheme follows a flexible investment approach and invests in Corporate Bonds, Gilts, Non-Convertible Debentures (NCDs) and Money Market Instruments without being aggressive on duration as well as credit quality. As per the fund manager, initial signs of demand recovery in select segments indicated bottoming out of macroeconomic data. Furthermore, fund manager expects the economic growth to improve in CY18 as GST related disruption smoothens and consumption revives on back of expected normal monsoon and implementation of Seventh Pay Commission pay out. As per the fund manager, equity markets may remain volatile in the near term due state elections in CY18, political events ahead of general election in 2019 and concerns about potential global trade war after the US initiated tariff actions on imports from certain countries. However, the fund manager is positive on equity market with medium to long term perspective as currently, the market is trading at closer to its long term average valuations with earnings bottoming out and cooling of bond yields. The fund has highest exposure in Banking & Financial Services Sector. Apart from Banking, the other top sectoral holdings are Capital Goods, IT, Construction and Auto & Auto Ancillaries. The fund manager expects large cap stocks to perform better as large cap stocks are trading at reasonable valuations as compared to mid cap stocks and has higher exposure in them. Currently, the fund has around 71% exposure to equity and around 29% exposure to debt & cash. Within equity portfolio, the fund has around 57% exposure in large cap stocks and around 14% exposure in mid & small cap stocks. The debt portfolio is predominantly invested in government securities and NCDs and has an average maturity of 4.02 years. The fund is recommended for moderate & conservative investors with an investment horizon of 2-3 years.

MUTUAL FUND SYNOPSIS - EQUITY FUNDS AS ON 28 MARCH, 2018


31

MUTUAL FUND SYNOPSIS: DEBT ORIENTED FUNDS AS ON 28 MARCH, 2018ICICI Prudential Debt Funds : Strategy and ViewAccording to fund house, the Monetary Policy Comittee revised the CPI inflation forecast downwards to 4.7-5.1% for H1FY19 and to 4.4% for H2FY19. Even though the MPC sounded dovish in its inflation projection, it would continue to remain watchful of the uncertainty in oil prices, staggered impact of HRA increases for any second round effects, potential fiscal slippages and possible impact of Minimum Support Price (MSP) hike. The MPC expects growth to accelerate to 7.4% in FY20. However, the statement suggests no imminent policy tightening as downside risks to growth, such as rising protectionism and concerns around the domestic banking sector, still persist. Hence, RBI would like to adopt a wait-and-watch approach based on the evolving trajectory surrounding growth and inflation. As per the fund house, inflation is likely to average around 4.75% in FY19, with inflation H1FY19 expected to be relatively higher at around 5%. For the medium term, the fund house would remain cautious on the impact of monsoon, rise in crude oil prices, fiscal deficit, MSP increase and global banks’ normalization of policy rates. The Fund house sees a good rally in the long term yields.The Fund House Also, believes that the short end of the curve could follow the trend and hence could provide better risk adjusted returns. In ICICI Prudential Short Term Plan the average maturity of the portfolio as on March 2018 stood at 2.42 years compared to 2.57 years as of February 2018. The G-sec exposure of the fund as of March 2018 was 24.92% compared to 28.08% as of the previous month. The fund had about 59.92% exposure to corporate debt papers in March with higher exposure in PSU bonds, FI and Banks; and NBFC papers. The YTM of the fund was 7.80% as of March 2018. In ICICI Prudential Banking and PSU Debt Fund the average maturity was 2.65 years as of February 2018 compared to 3.43 years in the previous month. The fund had about 18.79% exposure to G-secs as compared to 30.67% as of the previous month. The fund had about 50.62% exposure to corporate debt papers with higher exposure in FI & Bank papers, PSU bonds and NBFCs. The portfolio YTM stood at 7.70% as of March 2018.Aditya Birla Sun Life Debt Funds : Strategy and ViewAccording to the fund house, RBI’s monetary policy was largely in line with market expectations wherein the policy rates were kept unchanged in consistence with the RBI’s neutral stance. As per the fund house, RBI continues to be circumspect on the upside risks to inflation noting factors like revised formula for Minimum Support Price (MSP), impact of HRA revision by state governments , further deviation from revised fiscal consolidation path, distribution of monsoon & volatility in crude prices. As per the fund house, outlook for growth looks positive here on considering clear signs of revival in investment activity reflected in capital goods production & rising imports and improving global demand. With pains of GST & demonetization behind us & considering positive growth & inflation outlook The Fund house expects RBI to stay on an extended pause through the calendar year 2018. According to fund house, in February 2018 policy, markets had started pricing 3 rate hikes over the next 15 months, basis RBI’s assessment of macro-economic situation. Now, with RBI revising its inflation projections on lower side, markets are also revisiting quantum & number of rate hikes in the year ahead. Steady repo rate along with much lower quantum of 10 year G-Sec issuances. In Aditya Birla Sunlife Short Term Fund, the average maturity of the portfolio stood at 2 years in March 2018 as against 1.92 years in February 2018. The fund’s exposure to G-secs stood at around 11.08% as on March 2018 compared with 13.97% as of the previous month. The fund’s exposure in Corporate Debt was around 73.33% in March 2018 as against 66.69% in February 2018. The portfolio YTM was 7.75% as of March 2018. In Aditya Birla Sun Life Income Plus, the average maturity of the portfolio stood at 6.61 years in March 2018 compared with 7.65 years as of February 2018. The fund’s G-sec exposure in the fund stood at about 61.92% in March 2018 compared with 76.62% the previous month. The Corporate Debt exposure in the fund was around 30.75% in March 2018 compared with 17.46% in the previous month. The YTM of the fund was 7.59% as of March 2018.SBI Debt Funds : Strategy and ViewAccording to the fund house, the RBI kept the Repo rate unchanged at 6.00% in its first Monetary Policy meeting for FY19 which was in line with the fund house and market expectations. As per the fund house, the central bank maintained its neutral stance and continued to suggest the data dependency. As per the fund house, the Monetary Policy Comittee (MPC) seems more confident of overall economic growth. On the supply side, while agriculture output looks set to hit record high production in 2017-18, both manufacturing and services data depict increasing buoyancy. As per the fund house, the inflation outlook will critically depend on the quantum of Minimum Support Price (MSP) increase and its impact on market prices. Some of the upside risks also emanate from fiscal slippage, any erraticism in 2018 monsoon, rising input prices for businesses, crude prices and staggered impact of HRA revisions by state governments. As per the fund house, MPC seemed more sanguine on both growth and inflation. Fund house sees 2018 to be a year of pause as inflation remains in the comfort zone, growth starts to shape up from 2017-18 lows and the policy makers work to crease out the challenges of the banking sector. After a softer inflation print in February 2018 and a favourable G-sec supply calendar by the Union government, RBI’s stance should bring some more near term relief to the Indian bond market. On a more directional basis, the unfolding fiscal dynamics, MSP announcements, bank credit demand and global developments remain important variables wherein considerable uncertainties persist. In SBI Short Term Debt Fund, the average maturity of the portfolio stood at 2.05 years in March 2018 as against 1.84 years in February 2018. The fund’s exposure to G-secs stood at around 9.31% as on March 2018 compared with 3.92% as of the previous month. The fund’s exposure in Corporate Debt was around 87.02% in March 2018 as against 85.03% in February 2018. The portfolio YTM was 7.64% as of March 2018. In SBI Dynamic Bond Fund, the average maturity of the portfolio stood at 6.59 years in March 2018 compared with 5.84 years as of February 2018. The fund’s G-sec exposure stood at about 68.65% in March 2018 compared with 63.39% the previous month. The Corporate Debt exposure in the fund was around 19.07% in March 2018 compared with 7.04% in the previous month. The YTM of the fund was 7.50% as of March 2018.


Recommended Funds of ICICI Prudential MF Fund Manager Average

MaturityInvestment

Horizon

ICICI Prudential Short Term Plan Term Plan

Manish Bantia & Anuj Tagra 2.42 years 12 Months

& above

ICICI Prudential Banking & PSU Debt Fund

Rahul Goswami & Chandni Gupta 2.65 years 15 Months

& above

Recommended Funds of SBI MF Fund Manager Average

MaturityInvestment

Horizon

SBI Short Term Debt Fund

Rajeev Radhakrishnan 2.05 years 12 Months

& above

SBI Dynamic Bond Fund Dinesh Ahuja 6.59 years 24 Months

& above

Recommended Funds of IDFC MF Fund Manager Average

MaturityInvestment

Horizon

Aditya Birla Sun Life Short Term Fund

Mr. Kaustubh Gupta & Mr.

Maneesh Dangi2.00 years 12 Months

& above

Aditya Birla Sun Life Income Plus

Mr. Pranay Sinha & Mr. Ashish Kela 6.61 years 24 Months

& above

32

FUND FACT SHEETEquity Funds As On 28 March, 2018

Source for entire data stated above is ICRA Online Ltd. (For Disclaimer of ICRA Online Ltd, refer http://www.icraonline.com/legal/standard-disclaimer.html) Note: Return figures for schemes are absolute for <= 1 year and compounded annualised for > 1 year. Past returns cannot be taken as an indicator of future performance. As per SEBI circular dated September 13, 2012, fresh subscriptions/switch-ins will be accepted only under a single plan for all the schemes w.e.f from 1st October 2012. All the NAVs and return calculation are for the Growth Oriented Plans, unless mentioned otherwise. * If redeemed before 1 year. ^ If redeemed before 12 months. # If redeemed before 365 days. $ If redeemed before 18 months

Name of Fund Motilal Oswal Multicap 35 Fund

DSP BlackRock Equity Opportunities

Fund

Aditya Birla Sun Life Advantage Fund Tata Equity P/E Fund SBI Bluechip Fund

Inception Date 28-Apr-14 16-May-00 24-Feb-95 29-Jun-04 14-Feb-06Corpus (in RCr) 12212.97 5068.68 5744.90 2965.46 17724.05NAV (R) 26.30 211.55 405.56 134.31 37.22

Returns S&P BSE Sensex Index

1 Month -3.56% -0.59% -3.11% -2.85% -3.20% -1.78%3 Months -2.60% -3.15% -8.60% -9.55% -4.19% -3.85%6 Months 5.39% 4.07% 3.22% -2.77% 3.33% 4.55%1 Year 12.10% 16.40% 12.39% 11.42% 16.23% 12.09%3 Years 6.27% 16.12% 13.27% 12.05% 15.16% 10.22%5 Years 11.84% -- 20.30% 22.52% 24.11% 18.16%Since Inception -- 28.00% 18.62% 18.34% 20.79% 11.45%Exit Load 1%* 1%^ 1%# 1%$ 1%*Dividend Pay-out (Latest) 17.50% 33.00% 113.30% 13.50% 10.00%Dividend Date 20-Mar-18 11-Jan-2018 18-Aug-17 18-Jan-18 23-Sep-16

Portfolio Composition SectorsAuto & Auto ancillaries 13.92% 8.57% 10.52% 15.55% 10.70%Banks & Finance 44.01% 29.75% 28.62% 22.29% 31.01%Capital Goods 0.00% 3.97% 3.34% 5.00% 3.37%Cement 0.00% 4.39% 8.43% 3.50% 4.01%Chemicals & Fertilizers 0.00% 2.04% 1.20% 2.63% 4.03%Housing & Construction 0.00% 9.32% 6.82% 4.59% 6.87%IT 2.51% 5.58% 7.11% 4.64% 3.22%Media 0.00% 0.00% 0.00% 5.16% 0.00%Metals 0.00% 5.00% 5.39% 0.00% 1.89%Oil & Gas, Energy 12.32% 9.83% 7.98% 14.37% 6.18%Telecom 0.00% 0.00% 0.40% 0.00% 1.25%Textiles 0.00% 2.28% 0.00% 1.41% 0.00%Transport & Shipping , Logistics & Services 4.71% 1.71% 2.19% 3.49% 1.82%Defensive 21.29% 13.51% 14.99% 6.31% 16.06%FMCG 11.74% 6.70% 9.85% 6.31% 9.23%Pharma 9.54% 6.81% 5.15% 0.00% 6.83%Other Equities 0.00% 0.00% 0.00% 0.42% 0.00%Fixed Income Investments 0.00% 0.91% 0.19% 0.00% 1.31%Current Assets 1.24% 3.13% 2.83% 10.64% 8.27%Market Capitalization (%)Large Cap 86.62% 72.89% 77.95% 72.69% 84.80%Mid Cap 10.38% 21.08% 17.69% 12.83% 5.62%Small Cap 1.76% 1.99% 1.35% 3.84% 0.00%Concentration of Stocks% of AssetsTop 5 34.46% 18.85% 20.54% 26.29% 23.46%Top 10 55.96% 30.13% 35.98% 40.73% 35.94%

Top 5 Stocks

HDFC Ltd. HDFC Bank Ltd. HDFC Bank Ltd. HDFC Ltd. HDFC Bank Ltd.Maruti Suzuki India

Ltd. ICICI Bank Ltd. Infosys Ltd. Yes Bank Ltd. Larsen & Toubro Ltd.

HDFC Bank Ltd. State Bank of India Maruti Suzuki India Ltd.

Power Grid Corporation of India

Ltd.

Mahindra & Mahindra Ltd.

IndusInd Bank Ltd. Tata Steel Ltd. Reliance Industries Ltd.

Zee Entertainment Enterprises Ltd. ITC Ltd.

Interglobe Aviation Ltd. HCL Technologies Ltd. Voltas Ltd. Reliance Industries

Ltd. Nestle India Ltd.

33

FUND FACT SHEETFUND FACT SHEET

Source for entire data stated above is ICRA Online Ltd. (For Disclaimer of ICRA Online Ltd, refer http://www.icraonline.com/legal/standard-disclaimer.html) All the NAVs and return calculation are for the Growth Oriented Plans, unless mentioned otherwise. Note: Return figures for schemes are absolute for <= 1 year and compounded annualised for > 1 year. Past returns cannot be taken as an indicator of future performance. As per SEBI circular dated September 13, 2012, fresh subscriptions/switch-ins will be accepted only under a single plan for all the schemes w.e.f from 1st October 2012. * If the units redeemed or switched out are upto 10% of the units (the limit) purchased or switchedin within 12 months from the date of allotment: Nil.If units redeemed or switched out are in excess of the limit within 12 months from the date of allotment: 1%. $ In respect of each purchase / switch-in of Units, upto 15% of the units may be redeemed / switched-out without any exit load from the date of allotment.Any redemption in excess of the above limit shall be subject to the following exit load:For redemption / switch-out of units on or before 365 days from the date of allotment: 1.00% of applicable NAV.# If the units redeemed or switched out are upto 10% of the units purchased or switched in (“the limit”) within 1 year from the date of allotment Exit load is Nil.If units redeemed or switched out are over and above the limit within 1 year from the date of allotment Exit load is 1%. ^ For exit within 12 months from the date of allotment :- For 10% of investment : Nil & For remaining investment : 1%** In respect of each purchase / switch-in of Units, upto 15% of the units may be redeemed without any exit load from the date of allotment. Any redemption in excess of the above limit shall be subject to the following exit load: Exit load of 1.00% is payable if Units are redeemed / switched-out within 1 year from the date of allotment of units.

Balanced Funds As On 28 March, 2018

Name of FundDSP BlackRock Equity & Bond

Fund

Aditya Birla Sun Life

Balanced 95 Fund

L&T India Prudence Fund

SBI Magnum Balanced Fund

HDFC Balanced Fund

Inception Date 27-May-99 10-Feb-95 7-Feb-11 9-Oct-95 11-Sep-00Corpus (in RCr) 6822.12 13916.95 9820.37 21801.63 20400.53NAV (R) 142.43 737.01 25.57 122.79 145.80 Returns Crisil Hybrid 35+65 - Aggressive Index1 Month -1.44% -2.03% -1.39% -1.92% -1.83% -2.10%3 Months -2.33% -5.64% -4.29% -3.17% -4.03% -3.55%6 Months 3.11% 2.78% 1.59% 2.67% 4.68% 4.09%1 Year 10.65% 9.57% 9.33% 11.62% 14.25% 12.57%3 Years 9.55% 10.65% 9.99% 10.33% 9.53% 11.17%5 Years 13.46% 16.38% 17.29% 18.70% 17.62% 19.17%Since Inception -- 15.13% 20.42% 14.06% 16.00% 16.49%Exit Load 1%* 1%$ 1%# 1%^ 1%**Dividend Pay-out (Latest) 2.10% 51.00% 1.30% 8.80% 7.00%Dividend Date 28-Mar-18 23-Mar-18 23-Feb-18 22-Mar-18 26-Mar-18Portfolio Composition SectorsAuto & Auto ancillaries 7.34% 6.02% 5.94% 3.12% 4.10%Banks & Finance 21.67% 22.80% 23.37% 24.32% 24.16%Capital Goods 5.12% 3.03% 7.37% 2.79% 3.24%Cement 4.21% 1.20% 3.71% 0.59% 0.00%Chemicals & Fertilizers 0.27% 2.70% 2.26% 1.82% 3.29%Housing & Construction 7.81% 3.68% 6.16% 0.86% 7.82%IT 3.32% 5.10% 6.24% 7.74% 5.55%Media 0.79% 1.96% 2.03% 0.00% 0.65%Metals 1.84% 3.39% 2.06% 0.77% 2.55%Oil & Gas, Energy 4.22% 6.10% 1.94% 1.10% 6.49%Telecom 0.69% 0.91% 1.13% 4.55% 0.98%Textiles 2.16% 0.00% 1.04% 0.00% 0.00%Transport & Shipping , Logistics & Services 1.11% 0.00% 0.00% 6.51% 1.84%Defensive 13.24% 16.42% 7.90% 10.85% 6.69%FMCG 9.36% 9.98% 5.16% 5.83% 4.13%Pharma 3.88% 6.44% 2.74% 5.02% 2.56%Other Equities 0.00% 0.00% 0.00% 0.00% 1.29%Fixed Income Investments 26.11% 24.80% 21.85% 29.82% 28.90%Current Assets 0.12% 1.90% 7.02% 5.16% 2.45%Market Capitalization (%)Large Cap 54.28% 58.72% 56.69% 49.35% 53.88%Mid Cap 12.52% 10.19% 10.14% 10.37% 9.26%Small Cap 6.97% 4.38% 4.31% 5.30% 5.51%Concentration of Stocks% of EquitiesTop 5 14.89% 15.16% 16.23% 19.43% 20.06%Top 10 23.96% 22.57% 26.82% 30.71% 30.29%

Top 5 Stocks

HDFC Bank Ltd. HDFC Bank Ltd. HDFC Ltd. HDFC Bank Ltd. HDFC Bank Ltd.Bajaj Finance Ltd. ICICI Bank Ltd. HDFC Bank Ltd. State Bank of India Infosys Ltd.Larsen & Toubro

Ltd.Larsen & Toubro

Ltd.Tata Consultancy

Services Ltd.Kotak Mahindra Bank

Ltd. HDFC Ltd.

Bajaj Finserv Ltd. Maruti Suzuki India Ltd. Larsen & Toubro Ltd. Bharti Airtel Ltd. ITC Ltd.

ICICI Bank Ltd. Infosys Ltd. Axis Bank Ltd. ICICI Bank Ltd. Larsen & Toubro Ltd.

34

FUND FACT SHEETMonthly Income Plans As On 28 March, 2018

Source for entire data stated above is ICRA Online Ltd. (For Disclaimer of ICRA Online Ltd, refer http://www.icraonline.com/legal/standard-disclaimer.html) Note: Return of all schemes are absolute for <= 1 year and compounded annualised for > 1 year. Past returns cannot be taken as an indicator of future performance. As per SEBI circular dated September 13, 2012, fresh subscriptions/switch-ins will be accepted only under a single plan for all the schemes w.e.f from 1st October 2012. # If redeemed/switch out within 12 months from the date of allotment:- For 10% of investment : Nil - For remaining investment : 1%. * Upto 15% of the units may be redeemed / switched-out without any exit load from the date of allotment. Any redemption in excess of the limit shall be subject to the following exit load: For redemption / switch-out of units on or before 365 days from the date of allotment: 1.00% ofapplicable NAV. $ For units in excess of 10% of the investment,1% will be charged for redemption within 365 days. ^ For redemption / switch out of upto 10% of the initial investment amount (limit) purchased or switched in within 1 year from the date of allotment : Nil. If units redeemed or switched out are in excess of the limit within 1 year from the date of allotment : 1%. ** In respect of each purchase / switch-in of Units, 15% of the units (“the limit”) may be redeemed without any exit load from the date of allotment. Any redemption in excess of the limit shall be subject to the following exit load: Exit load of 1% is payable if Units are redeemed / switched-out within 1 year from the date of allotment of units.

Name of Fund Axis Income Saver Fund

Aditya Birla Sun Life MIP II - Wealth 25

Plan

IDFC Monthly Income Plan -

RegularKotak Monthly Income Plan

HDFC MF Monthly Income Plan - Long

Term PlanInception Date 16-Jul-10 22-May-04 25-Feb-10 2-Dec-03 26-Dec-03Corpus (in RCrs) 398.39 2407.46 245.53 377.70 3458.85NAV (R) 18.45 38.22 20.27 29.63 43.21

ReturnsCRISIL Hybrid 85+15 - Conservative Index1 Month 1.26% 0.13% 0.39% -0.38% 0.84% 0.22%3 Months 0.60% -0.03% -1.94% -1.18% -0.54% -2.24%6 Months 1.19% 2.81% -0.40% 0.83% 1.54% 0.49%1 Year 6.45% 8.10% 6.89% 4.81% 6.32% 4.96%3 Year 8.59% 6.70% 9.61% 7.21% 8.51% 8.00%Since Inception -- 8.28% 10.16% 9.13% 7.87% 10.81%

Exit Load 1%# 1%* 1%$ 1%^ 1%**

Portfolio Composition Fixed Income Securities Gilts/T-Bills 0.00% 14.58% 55.15% 23.13% 31.00%Call Money/Repos/Cash/FD 7.22% 8.56% 5.69% 11.30% 5.44%PSU Bonds 22.04% 5.20% 7.50% 5.83% 7.83%FI and Bank Papers 10.12% 8.80% 7.21% 34.10% 21.38%NBFC Papers 12.32% 23.55% 0.00% 0.03% 0.09%Securitised Debt 10.44% 5.38% 0.00% 4.43% 5.16%Other Corporate bonds 12.89% 4.85% 1.39% 0.19% 4.64%Total 75.02% 70.91% 76.94% 79.01% 75.55%

Average Maturity (in Years) 1.50 4.18 4.15 5.05 7.05

EquitiesSectorsAuto & Auto ancillaries 4.10% 3.86% 3.29% 3.28% 1.24%Banks & Finance 10.01% 11.13% 2.98% 3.72% 7.18%Capital Goods 1.10% 1.72% 2.44% 1.28% 1.80%Cement 1.70% 1.40% 0.76% 0.38% 0.00%Chemicals & Fertilizers 2.24% 0.54% 0.00% 0.59% 0.56%Housing & Construction 0.97% 1.12% 0.96% 0.81% 4.00%IT 0.63% 0.00% 1.58% 0.00% 2.44%Media 0.00% 0.00% 0.49% 1.91% 0.17%Metals 0.00% 1.55% 0.44% 1.32% 0.87%Oil & Gas, Energy 0.00% 2.61% 2.73% 0.29% 3.01%Telecom 0.00% 0.00% 0.00% 0.34% 0.53%Textiles 0.93% 0.42% 0.46% 0.00% 0.00%Transport & Shipping , Logistics & Services 1.38% 0.54% 0.49% 0.00% 0.88%Defensive 1.56% 4.18% 6.45% 7.06% 1.75%FMCG 1.01% 2.91% 5.45% 7.06% 0.37%Pharma 0.55% 1.26% 1.00% 0.00% 1.38%Other Equities 0.36% 0.00% 0.00% 0.00% 0.00%Total 24.98% 29.09% 23.06% 20.99% 24.45%

Top 5 Equity Stocks

HDFC Bank Ltd. Eicher Motors Ltd. MRF Ltd. ITC Ltd. Larsen & Toubro Ltd.Kotak Mahindra Bank Yes Bank Ltd. Infosys Ltd. Vedanta Ltd. ICICI Bank Ltd. Maruti Suzuki India HPCL Titan Company Ltd. Tata Motors Ltd. Infosys Ltd.Shree Cement Ltd. Bajaj Finance Ltd. Nestle India Ltd. Bata India Ltd. State Bank of India

HDFC Ltd. Natco Pharma Ltd. Sagar Cements Ltd. Sun T V Network Ltd. NTPC Ltd.

36

FUND FACT SHEETFUND FACT SHEETIncome Funds As On 28 March, 2018

Name of Fund ICICI Prudential Long Term Plan

SBI Dynamic Bond Fund

Aditya Birla Sun Life Income

Plus UTI Bond Fund

Sundaram Flexible Fund - Flexible Income Plan

Inception Date 20-Jan-10 9-Feb-04 21-Oct-95 4-May-98 30-Dec-04Corpus (in Crs) 2332.18 2033.25 1468.58 1237.64 369.81NAV (R) 21.68 21.27 75.96 52.04 24.39

ReturnsCrisil Composite Bond Fund Index3 Months 1.47% 2.19% 0.49% 1.12% 1.72% 1.34%6 Months 0.59% 1.25% -0.77% -0.64% 0.22% 0.94%1 Year 5.17% 6.35% 3.29% 3.78% 4.34% 5.91%3 Years 8.21% 8.96% 7.55% 6.50% 7.61% 7.95%Since Inception -- 9.91% 5.48% 9.45% 8.64% 6.96%

Exit Load 0.25%# 0.25%* Nil Nil Nil

Portfolio CompositionGilts/T-Bills 27.62% 68.65% 61.92% 24.75% 14.19%CDs/CPs 34.93% 7.43% 1.62% 0.00% 2.66%Securitised Debt 4.63% 0.00% 0.00% 10.23% 0.00%Corporate Debt 28.85% 19.07% 30.75% 43.27% 77.33%Cash & Others 3.97% 4.85% 5.70% 21.75% 5.82%

Sectoral Composition

FI and Bank Papers 26.94% 24.59% 16.08% 14.01% 15.32%

PSU Bonds 6.66% 1.91% 9.22% 12.98% 48.15%

NBFC Papers 21.75% 0.00% 4.07% 0.00% 0.00%

Other Corporate Bonds 13.07% 0.00% 3.00% 26.51% 16.52%

Gilts/T-Bills 27.62% 68.65% 61.92% 24.75% 14.19%

Cash & Others 3.97% 4.85% 5.70% 21.75% 5.82%


Asset Quality (in %)AAA/Equivalent 87.17% 92.57% 100.00% 82.95% 100.00%AAA/P1+/A1+ 55.58% 19.06% 32.37% 36.44% 79.99%Call/Cash/FD/G-Secs 31.58% 73.50% 67.63% 46.50% 20.01%

Sub AAA 12.83% 7.43% 0.00% 17.05% 0.00%AA+ 8.28% 7.43% 0.00% 10.72% 0.00%AA 4.56% 0.00% 0.00% 6.34% 0.00%Below AA 0.00% 0.00% 0.00% 0.00% 0.00%

Unrated 0.00% 0.00% 0.00% 0.00% 0.00%Source for entire data stated above is ICRA Online Ltd. (For Disclaimer of ICRA Online Ltd, refer http://www.icraonline.com/legal/standard-disclaimer.html) Note: Return figures for schemes are absolute for <= 1 year and compounded annualised for > 1 year. Past returns cannot be taken as an indicator of future performance. As per SEBI circular dated September 13, 2012, fresh subscriptions/switch-ins will be accepted only under a single plan for all the schemes w.e.f from 1st October 2012. All the NAVs and return calculations are for the Growth Oriented Plans, unless mentioned otherwise.* For exit within 1 Month from the date of allotment --- For 10% of investment : Nil --- For remaining investment : 0.25% # For exit within 1 Month from the date of allotment- Exit load is 0.25%

37

FUND FACT SHEETFUND FACT SHEETGilt Funds As On 28 March, 2018

Name of FundSBI Magnum Gilt Fund

Long Term PlanUTI Gilt Advantage

Fund - Long Term PlanICICI Prudential Long

Term Gilt Fund

IDFC Government Securities Fund - Investment Plan

Inception Date 30-Dec-00 21-Jan-02 19-Aug-99 3-Dec-08Corpus (in Crs) 2246.03 563.63 786.99 467.28NAV (R) 38.11 38.11 59.72 20.29

Returns3 Months 0.63% 1.49% 2.80% 1.22%6 Months -1.14% -0.72% 0.02% -1.42%1 Year 3.20% 3.13% 5.43% 1.90%3 Years 8.05% 8.06% 8.24% 6.90%Since Inception 8.06% 8.61% 10.07% 7.88%

Exit Load Nil Nil Nil Nil

Portfolio CompositionGilts/T-Bills 93.91% 82.76% 74.82% 99.77%Cash/CBLO/Repo 6.09% 17.24% 25.18% 0.23%

Maturity-wise composition0 - 5 years 21.77% 10.47% 28.28% 11.75%6 - 10 years 36.57% 57.55% 32.45% 79.43%11 - 15 years 35.12% 14.75% 14.08% 8.60%16 - 20 years 0.45% 0.00% 0.00% 0.00%> 20 years 0.00% 0.00% 0.00% 0.00%

Average Maturity (in Years) 8.85 7.38 6.44 8.57Source for entire data stated above is ICRA Online Ltd. (For Disclaimer of ICRA Online Ltd, refer http://www.icraonline.com/legal/standard-disclaimer.html) Note: Return of all schemes are absolute for <= 1 year and compounded annualised for > 1 year. Past returns cannot be taken as an indicator of future performance. As per SEBI circular dated September 13, 2012, fresh subscriptions/switch-ins will be accepted only under a single plan for all the schemes w.e.f from 1st October 2012. All the NAVs and return calculations are for the Growth Oriented Plans, unless mentioned otherwise.

38

FUND FACT SHEETFUND FACT SHEETShort Term Plans As On 28 March, 2018

Name of FundUTI Banking & PSU Debt Fund

ICICI Prudential Banking & PSU

Debt Fund

Sundaram Banking & PSU

Debt Fund

Aditya Birla Sun Life Short Term

Fund

SBI Short Term Debt Fund

Inception Date 3-Feb-14 1-Jan-10 30-Dec-04 3-Mar-97 27-Jul-07Corpus (in Crs) 917.82 5892.72 1207.25 17505.68 7620.01NAV (R) 14.23 19.97 27.25 66.41 20.03

ReturnsCrisil Short-Term Bond Fund Index3 Months 1.75% 1.74% 2.12% 1.85% 1.84% 1.81%6 Months 2.30% 2.79% 2.05% 2.08% 2.56% 2.33%1 Year 6.21% 6.68% 6.66% 6.43% 6.80% 6.14%3 Year 7.97% 8.74% 8.82% 7.43% 8.34% 7.78%Since Inception -- 8.87% 8.75% 7.85% 9.40% 6.72%

Exit Load Nil Nil Nil Nil Nil

Portfolio CompositionGilts/T-Bills 3.19% 18.79% 19.55% 11.08% 9.31%CDs/CPs 0.00% 28.01% 6.94% 5.48% 0.00%Securitised Debt 10.76% 0.00% 0.00% 6.21% 0.00%Corporate Debt 80.46% 50.62% 70.37% 73.33% 87.02%Cash & Others 5.59% 2.58% 3.14% 3.90% 3.68%

Sectoral CompositionFI and Bank Papers 25.05% 51.03% 17.95% 19.95% 26.50%PSU Bonds 55.41% 18.60% 47.80% 26.59% 34.27%NBFC Papers 0.00% 7.82% 11.56% 23.04% 18.91%Other Corporate Bonds 10.76% 1.18% 0.00% 15.44% 7.33%Gilts/T-Bills 3.19% 18.79% 19.55% 11.08% 9.31%Cash & Others 5.59% 2.58% 3.14% 3.90% 3.68%


Asset QualityAAA/Equivalent 90.68% 92.04% 100.00% 80.87% 94.03%AAA/P1+/A1+ 81.90% 70.67% 77.31% 65.89% 81.05%Call/Cash/FD/G-Secs 8.78% 21.37% 22.69% 14.98% 12.98%


Unrated 0.00% 0.00% 0.00% 0.00% 0.00%Source for entire data stated above is ICRA Online Ltd. (For Disclaimer of ICRA Online Ltd, refer http://www.icraonline.com/legal/standard-disclaimer.html) Note: Return of all schemes are absolute for <= 1 year and compounded annualised for > 1 year. Past returns cannot be taken as an indicator of future performance. As per SEBI circular dated September 13, 2012, fresh subscriptions/switch-ins will be accepted only under a single plan for all the schemes w.e.f from 1st October 2012. All the NAVs and return calculations are for the Growth Oriented Plans, unless mentioned otherwise.

39

FUND FACT SHEETUltra Short Term Funds As On 28 March, 2018

Name of Fund Aditya Birla Sun Life Savings Fund

UTI Treasury Advantage Fund

SBI Ultra Short Term Debt Fund

L&T Ultra Short Term Fund

Tata Ultra Short Term Fund

Inception Date 15-Apr-03 23-Apr-07 27-Jul-07 10-Apr-03 6-Sep-05Corpus (in Crs) 18516.54 9844.61 9440.93 1992.97 4497.41NAV (R) 341.71 2395.10 2241.79 28.35 2632.47

Returns Crisil Liquid Fund Index1 Week 0.19% 0.28% 0.26% 0.33% 0.29% 0.26%1 Month 0.67% 0.88% 0.79% 0.88% 0.88% 0.81%3 Months 1.81% 1.90% 1.79% 1.90% 1.83% 1.82%6 Months 3.41% 3.27% 3.23% 3.26% 3.21% 3.17%1 Year 6.68% 7.37% 6.97% 6.83% 6.89% 6.93%Exit Load Nil Nil Nil Nil Nil

Portfolio CompositionGilts/T-Bills 2.20% 0.00% 2.18% 0.00% 0.00%CDs/CPs 19.81% 31.93% 45.21% 45.21% 47.26%Securitised Debt 3.28% 6.22% 0.00% 0.00% 0.56%Corporate Debt 74.60% 53.68% 63.39% 51.49% 48.36%Cash & Others 0.11% 8.16% -10.78% 3.30% 3.83%

Sectoral CompositionFI and Bank Papers 21.53% 33.37% 53.42% 49.40% 44.55%PSU Bonds 13.74% 26.06% 20.63% 14.39% 8.44%NBFC Papers 30.98% 27.21% 28.12% 24.34% 28.96%Other Corporate Bonds 31.44% 5.20% 6.43% 8.57% 14.23%Gilts/T-Bills 2.20% 0.00% 2.18% 0.00% 0.00%Cash & Others 0.11% 8.16% -10.78% 3.30% 3.83%

Average Maturity (in Days) 321 303 219 328 234

Asset Quality (in %)AAA/Equivalent 60.65% 82.08% 86.77% 100.00% 88.64%AAA/P1+/A1+ 58.34% 73.91% 95.38% 96.70% 84.82%Call/Cash/FD/G-Secs 2.31% 8.16% -8.60% 3.30% 3.83%


Unrated 0.00% 0.00% 0.00% 0.00% 0.00%Source for entire data stated above is ICRA Online Ltd. (For Disclaimer of ICRA Online Ltd, refer http://www.icraonline.com/legal/standard-disclaimer.html) Note: Return of all schemes are absolute for <= 1 year and compounded annualised for > 1 year. Past returns cannot be taken as an indicator of future performance. As per SEBI circular dated September 13, 2012, fresh subscriptions/switch-ins will be accepted only under a single plan for all the schemes w.e.f from 1st October 2012. All the NAVs and return calculations are for the Growth Oriented Plans, unless mentioned otherwise.

This communication is being sent by the Investment Advisory Group of HDFC Bank Ltd., registered under SEBI (Investment Advisors) Regulations, 2013. This note has been prepared exclusively for the benefit and internal use of the recipient and does not carry any right of reproduction or disclosure. Neither this note nor any of its contents maybe used for any other purpose without the prior written consent of HDFC Bank Ltd, Investment Advisory Group. In preparing this note, we have relied upon and assumed, without any independent verification, accuracy and completeness of all information available in public domain or from sources considered reliable. This note contains certain assumptions and views, which HDFC Bank Ltd, Investment Advisory Group considers reasonable at this point in time, and which are subject to change. Computations adopted in this note are indicative and are based on current market prices and general market sentiment. No representation or warranty is given by HDFC Bank Ltd, Investment Advisory Group as to the achievement or reasonableness or completeness of any idea and/or assumptions. This note does not purport to contain all the information that the recipient may require. Recipients should not construe any of the contents herein as advice relating to business, financial, legal, taxation, or other matters and they are advised to consult their own business, financial, legal, taxation and other experts / advisors concerning the company regarding the appropriateness of investing in any securities or investment strategies discussed or recommended in this note and should understand that statements regarding future prospects may not be realized. It may be noted that investments in equity and equity-related securities involve a degree of risk and investors should not invest any funds unless they can afford to take the risk of losing their investment. Investors are advised to undertake necessary due diligence before making an investment decision. For making an investment decision, investors must rely on their own examination of the Company including the risks involved. Investors should note that income from investment in such securities, if any, may fluctuate and that each security’s price or value may rise or fall. Accordingly, investors may receive back less than originally invested. Neither HDFC Bank nor any of its employees shall be liable for any direct, indirect, special, incidental, consequential, punitive or exemplary damages, including lost profits arising in any way from the information contained in this material. This note does not constitute an offer for sale, or an invitation to subscribe for, or purchase equity shares or other assets or securities of the company and the information contained herein shall not form the basis of any contract. It is also not meant to be or to constitute any offer for any transaction. HDFC Bank and its affiliates, officers, directors, key managerial persons and employees, including persons involved in the preparation or issuance of this material may from time to time, have long or short

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Disclosures: Research analyst or his/her relatives or HDFC Bank or its associates may have financial interest in the subject company in ordinary course of business. Research analyst or his/her relatives does not have actual/ beneficial ownership of 1% or more securities of the subject company at the end of the month immediately preceding the date of publication of research report: HDFC Bank or its associates may have actual/beneficial ownership of 1% or more securities of the subject company at the end of the month immediately preceding the date of publication of research report. Subject company may have been client of HDFC Bank or its associates during twelve months preceding the date of publication of the research report. HDFC Bank or its associates may have received compensation from the subject company in the past twelve months. HDFC Bank or its associates may have managed or co-managed public offering of securities for the subject company in the past twelve months. HDFC Bank or its associates may have received compensation for investment banking or merchant banking or brokerage services from the subject company in the past twelve months. HDFC Bank or its associates may have received compensation for products or services other than investment banking or merchant banking or brokerage services from the subject company in the past twelve months. HDFC Bank or its associates has not received compensation or other benefits from the subject company or third party in connection with the research report. Research analyst has not served as an officer, director or employee of the subject company. Neither research analyst nor HDFC Bank has been engaged in market making activity for the subject company. Three year price history of the daily closing price of the securities covered in this note is available at www.nseindia.com and www.bseindia.com. HDFC Bank House, 1st Floor, C.S. No. 6\ 242, Senapati Bapat Marg, Lower Parel, Mumbai 400013. Phone: (91)-22-6652 1000 ext 1311, Fax: (91)-22-24900983 \ 24900858

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