Ek ‘Ujjwal Bharat’ ki disha mein

Invest in resurgence of India’s soul through

Aditya Birla Sun Life

Resurgent India Fund
- Series 6
(A close ended Diversified Equity Scheme)

NFO Opens: 21 February, 2018 | NFO Closes: 7 March. 2018

Aditya Birla Sun Life AMC Ltd. For AMFI/NISM certified partners only. For internal circulation only.
Transformation
Transformationfrom
fromRural
Ruralto
toUrban
UrbanisisaaGlobal
GlobalPhenomena
Phenomena
GDP per capita, current prices (U.S. dollars per capita)
Rural Popula�on (% of total popula�on)
16000 80000

14000 70000 100

12000 60000 90 81
77
80
10000 50000
70
58 67
8000 40000
60
6000 30000 50
35
4000 2563 20000 40
26
30 44
2000 10000
20 25
0 0 18
14
10
-
China USA Malaysia Brazil India
China (LHS) India (LHS) Malaysia (LHS) Brazil (LHS) United States (RHS)
1980 2015

As countries grow prosperous, rural spaces transform into semi urban & Urban areas – generally take 20-30 yrs
All countries more prosperous (in terms of per capita income) have seen their rural population (%) go down; basically they become as
prosperous as their urban peers without relocating
India is headed in same direction, albeit a bit later

Rural India is clearly ready to take off ... It may have already begun its journey
Source: IMF; Trading Economics

Aditya Birla Sun Life AMC Ltd.

 Rural to Urban transformation
Rural to Urban transformation is an inevitable & irreversible process…
Only fast trackable
Urbanisation is not crisis but an
opportunity, seeing it as crisis is
wrong. And not just villages, we
want everyone to get opportunities
wherever they are staying. Aatma
gaav ki ho aur suvidha sheher ki ho,
this is what we believe.
Narendra Modi
H'ble Prime Minister
Aditya Birla Sun Life AMC Ltd.
Urbanisation is a driving force as well
as a source of development. It has
power to change and improve lives.
Urban areas are at the heart of many
great challenges. opporrtunities &
promise.
Ban Ki-Moon
Ex Secretary General of United Nations
Urbanisation is not about simply
increasing the number of urban residents
or expanding the area of cities. More
importantly, it’s about a complete
change from rural to urban style in terms
of industry structure, employment, living
environment and socail security.
Li Keqiang
Premier of the State Council of
the People's Republic of China
 Rural India is now ‘Ujjwal Bharat’
Agricultural land (% of land area) India's Produc�vity increase - Cereals produc�on
India's Rural Popula�on 4,000
84 61.5 (kg per hectare)
(% of total popula�on)
81
80 3,500
61.0
60.4
78 77 60.5 3,000
74 60.0 2,500 2,984
75
72
72 59.5 2,000
69 59.0
69 68 67 1,500
58.5 58.8
66 1,000
58.0 1,135
63 500
57.5
60 -

1961
1964
1967
1970
1973
1976
1979
1982
1985
1988
1991
1994
1997
2000
2003
2006
2009
2012
2015
1970 1980 1990 2000 2010 2013 2015 1970 1980 1990 2000 2010 2013 2015

Post 2000, rural population has declined significantly

Lower labour on farms, yet farm productivity has gone up on account of farm mechanization, improved infrastructure & modern
agricultural techniques

Government's key priority is to ensure growth of rural economy through increase in farm productivity or generate
opportunities for additional non farm income

‘Wealth Effect’ & events like Demonetization have ushered in consumption trends similar to Urban spaces
Source: World Bank, JM Financial

Aditya Birla Sun Life AMC Ltd.

 What’s driving ‘Ujjwal Bharat’?
FARM Income
Higher MSP - 1.5x of cost of produce
Subsidised Agri Inputs - Fertilizer, Seeds, etc
Easy access to credit
Direct Benefit Transfer (DBT)

Non-Farm Income Govt Initiatives

MNREGA - `47500 Crs in FY17 Rural Housing (PMAY),
Dairy/Poultry `14,500 cr - Rural Electrification Irrigation and Rural Sanitation;
Fisheries/Bee keeping Crop Insurance;
Aqua culture Initiatives like eNAM – 470+ APMCs connected,
Rental income Aadhar enrolments – 88% of population enrolled

Disruption in Technology Financial Inclusion

Mobile Penetration – 500mn+ rural Jan Dhan Yojana – 300mn+ accounts by 2017,
connections ,Easy Internet Access, Kisan Credit Cards (KCC),
Fintech innovations Bank’s Rural Reach – Increased 9x in last 7 yrs

GROWTH DRIVERS
Multiple tailwinds driving Rural Prosperity!
Source: JM Financial, B&K Securities

Aditya Birla Sun Life AMC Ltd.

 Ujjwal Bharat is very high on Govt Agenda

Boost growth and ramp up the share of agriculture

in country’s GDP to 20% by 2022 from 15% currently

~15% CAGR for Agriculture Sector

Incremental GDP of USD 650 Billion from rural economy

67% of India’s Population is Rural - any growth

in Rural Economy will generate significant
employment opportunities

Source: IMF, ABSLAMC Estimates

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 Government focus on Rural Development upsurge will lead to a virtuous cycle of Growth

Acceleration of chain reaction to create a growth

multiplier targeting doubling of Rural Incomes

Govt. Initiatives Improved environment Uptick in Higher disposable Higher

& Investment for agri & more jobs Rural Income income Consumption

Higher MSP - 1.5x of Rural Housing (PMAY) – Crop Insurance: Non farm income: FMCG industry expected
cost of producet `16000 cr spent in `13200 cr `10000 cr allocated to to grow by 10% CAGR
2017 develop infrastructure over FY 17-20
Initiatives like eNAM - Soil Heath Card for dairy, fisheries &
470+ APMCs connected Kisan Credit Cards (KCC) animal husbandry Agro - chemical
- Avg credit amount has Swacch Bharat: industry expected to
Bharatmala: 35,000 km doubled in last 7 years `10500 cr grow YoY @ 8%-10%
road built, 5.35 lakh cr owing to increased rural
funds raised MNREGA – `475,00 cr penetration
spent

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 Key developments in Budget 2018-19
FM’s key budget proposals were especially focused on Agriculture Growth & Rural Quality of Living

1.5 times of `11 lakh crores target `2000 crores to `10,000 crores
production cost to be for institutional credit upgrade agri-marketing corpus for 2 funds to
given as Minimum Support to agriculture sector, up infrastructure in 22,000 develop infrastructure
Prices (MSP) of all crops 10% from FY18 grameen markets, 585 for dairy, fisheries &
APMCs animal husbandry

Setup agricultural market Plan to spend `14 lakh `500 crores for Allocation of `2,600
fund of `2,000 crores crore to improve operation green, for crores for under ground
rural livelihood farmer cooperatives, irrigation
agri-logistics,
agro-processing

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 Farmer’s Balance Sheet - Investment Opportunities on both sides

Farmer Income Statement Farmer Balance Sheet

E Expenses R Revenues Liabilities & Networth Assets

@ The Farm @ The Farm @ The Farm @ The Farm

Fertilizer Crop Price Bank/ NBFC Loan Land
Seeds X = Crop Revenue Local moneylender loan Animals
Agro-chem Crop Volume Farm Equipment
Electricity Irrigation Equipment
Labour
Farm Equipment
Interest

@Home @Home @Home @Home

Food Wage (non-farm family member) Networth House
Education Seasonal Labour Personal Loan + Marriage etc. Vechicle: 2 Wheeler
Sundry Repairs Non-Agri Income Educational Loan Gold
Health MNREGA Medical Loan Cash
Festivals/ Wedding Spend Dairy/ Poultry
White/ Brown Goods
Fuel/ Transport

Farms should see a sharp rise in SURPLUS = ( Revenues - Expense)...

...available for spend on Farm/Home Assets & Home Expenses
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 So what & where is the big opportunity really?
FACTORS AFFECTING THE GROWTH OF THE SECTORS
Economic Growth Size of Immediate
Sector Name Theme Govt. Initiatives Market Penetration Income Drivers / Productivity Opportunity

Agri Input
Seeds & Fertilizers Low to Medium
Irrigation
Expenditure High
Medium to High
High (Productivity) `55,000 Crs
Agro Chemicals

Auto & Auto Ancillaries

Expenditure
Two Wheelers Medium Medium
(Doubling of Low Low `650,000 Crs
CVs & Tractors to High (Economic Growth)
Farm Income)
Passenger Vehicles

Staples & Consumer Discretionary High (Staples)

Consumption / Medium
FMCG Goods Low Low Low to Medium `197,000 Crs
Expenditure to High
White Goods (Discretionary)

Building Materials
Cement Govt. spending on
Medium to High
Pipes Infra development / High High High `95,000 Crs
(Economic Growth)
Tiles and Sanitary ware Affordable Housing
Paint

Banking & Financial Services

Financial Inclusion / Medium Low to Medium to High
Banks High `162,500 Crs
Credit Growth to High Medium (Economic Growth)
NBFCs

Source – ABSLAMC Estimates

Aditya Birla Sun Life AMC Ltd.

 Auto & Auto Ancillaries
Rural resurgence/upbeat in rural sentiments to boost two wheeler
volumes. With improving road infrastructure, we expect scooterisation to
strengthen in rural and semi-urban belts
Tractors on a steady growth path: Tractor growth of 18% in FY17;
Improved Agri demand
Pickup in construction activities
Relatively benign diesel prices

YTD FY18 domestic tractor sales recorded 21% YoY growth largely led by
agri-demand

Passenger car penetration set to increase, as infrastructure improves:

Data suggest shi towards passenger cars is aided by increasing rural incomes,
rising aspirations and better infrastructure

Source: JM Financial

Aditya Birla Sun Life AMC Ltd.

 Agri-inputs
DBT in Fertilisers - substantial progress since its implementation. Increasing Agrochemical usage by crops:
penetration of soil health cards & digitisation of land holding records shall cotton accounts for 50% of usage in the country
bode well for the sector demand
The Union budget 2018-19 has substantially enhanced the amount allocated
towards fertiliser subsidies to `70,000 crores, helping PAN India DBT
implementation.
Organized players likely to gain market share: Strong play of farm incomes, past
few years have witnessed a trend of more farmers realizing the importance of
branded pesticides and with improved affordability.
We believe, the Indian agrochemical sector is capable of growing at 8-10%
Agrochemical usage by states: AP, Maharashtra, Punjab
annually. accounts for 50% of usage in the country

Source: JM Financial, Spark Capital

Aditya Birla Sun Life AMC Ltd.

 Consumer Staples, Durables & Discretionary
With trend reversal in Rural wage data on account of government efforts coupled
with good monsoon last year, Rural consumption is expected to improve
India expected to become third largest consumer market by 2025. Emerging cities
is expected to see the highest growth among elite and affluent household
Demand for value-conscious fashion apparel has seen a healthy recovery in the
past 9-12 months owing to a better monsoon and a small shi from the organized
segment (post demonetization)
Government’s thrust to provide rural electrification garners well for consumer
durables sector: `16,320-crore scheme to supply electricity to all households by
December 2018

Source: BCG Analysis, JM Financial

Aditya Birla Sun Life AMC Ltd.

 Banking & Financial Services
Housing for all by 2022 could have a positive impact on Housing Finance &
Banking sector
Government schemes such as PMJDY have led to 290mn+ new bank accounts
indicating steady increase in Financial Inclusion
Trading in agri-mandi has shied substantially from cash to cheques post
demonetisation. This has led to higher efficiency.
Increase in mobile broad-band (through 4G expansion) and thereby data access to
increase in rural India
Good monsoon coupled with green shoots visible in rural consumption may create
demand for sectors like vehicle financing and others

Source: JM Financial, CMIE, UIDAI

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 Building Materials
Building materials constitute anywhere around ~35% of total cost of
construction. This space covers niche building material categories like ceramic
tiles, plastic pipes, sanitary ware, wood panels, adhesives, etc. which are structural,
sustainable and scalable themes to play out.
Government's infra push a potent catalyst: Under its ambitious Housing for
All project the govt is planning to add 50mn plus homes by 2022.
Changing consumer preference: This will lead to to upsurge in the demand of
building material constituents & driving growth across categories in home décor
segment.
Shortening replacement cycle to further augment opportunity: We
envisage product’s replacement cycle to shorten, riding rising affordability and
product’s availability driven by deepening distribution of companies & expanding
e-commerce.
Shortening replacement cycle to boost demand

Note: For replacement demand in plywood / laminates / MDF for middle class household is based on INR 60,000/70,000 per HH in 2020 / 2025
Source: JM Financial, Edelweiss research

Aditya Birla Sun Life AMC Ltd.

 Tractors - modernizing India's farms
Tractor segment has been a significant beneficiary of the rising rural income following normal monsoon over the past two years
World’s largest tractor manufacturer generates >75% of standalone revenue from rural segment on sale of tractors, UV’s,
3W, LCV and would be a major beneficiary of recovery in rural demand
Shortage of skilled labour has led to the need of increased mechanization which is, in turn, leading to a structural shi towards
higher HP tractors resulting in accelerated growth & improved profitability
Increase in the disposable income of farmers owing to higher allocation to rural schemes and better minimum support prices (MSP) is
likely to support tractor sales volume going forward

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The stocks mentioned above shall be deemed not to constitute an advice, an offer to sell/purchase or as an invitation or solicitation to do
so. The scheme may or may not have exposure to the mentioned stocks
Source: Emkay, JM Financial

Aditya Birla Sun Life AMC Ltd.

 Protecting food (crops)
An agrochemical major has evolved from a crop protection chemical company to a complete crop solutions provider offering seeds,
crop protection products, biological, soil nutrients and post-harvest solutions
Best positioned to ride the agrochemical growth story in India (and worldwide) because of its product portfolio through which it
offers offers solutions for the farmer from the point of improving soil health to standing crop protection point
India business contributes 21% of its revenue while it has a superior brand recall among farmers worldwide
With farmers productivity / earning improving (most crops selling above MSPs now) & gradual adoption of modern technology, complete
solution companies with large distribution network will gain the most

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The stocks mentioned above shall be deemed not to constitute an advice, an offer to sell/purchase or as an invitation or solicitation to do so. The scheme may or may not have exposure to the mentioned stocks
Source: Emkay, CLSA

Aditya Birla Sun Life AMC Ltd.

 Urbanizing the hinterland
Triggered by Demonetization, even the Rural consumers have adopted the retail trends as plastic money & digital wallets
have made deep inroads on back of phenomenal internet access
One of the first companies to establish modern retail stores in small towns and cities, it has rapidly created its stores network across the
North & Central India’s tier II, III & IV cities & is a leader in this space
It’s success in small towns lies in its unique business model of “Value Retail” focusing on the price conscious consumers in
smaller cities while fulfilling consumers’ aspirations
With more disposable income in hands of the villager, this company will be a structural beneficiary of this “Ujjwal Bharat” thesis

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The stocks mentioned above shall be deemed not to constitute an advice, an offer to sell/purchase or as an invitation or solicitation to do so. The scheme may or may not have exposure to the mentioned stocks
Source: Spark Capital, Amsec

Aditya Birla Sun Life AMC Ltd.

 Financing rural India
JAM trinity (Jandhan - Aadhaar - Mobile) has resulted in better knowledge of retail credit in rural India resulting in emergence of NBFCs
as the new moneylender of choice on the block
One of the largest CV financiers with a clear focus on tier III & IV cities (90% of branches in rural/semi-urban) poised to
benefit more than its peers from the recovery in demand for money by rural India as the local economy expands faster
Geographically diversified loan book allows it to focus on the vehicle finance and small business loans to deliver stable growth and
profitability.
Leveraging the widespread rural network of the group companies - EID Parry and Coromandel
Offers loans to farmers for purchasing pesticides/fertilisers at Coromandel outlets and other loans for agricultural activities

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The stocks mentioned above shall be deemed not to constitute an advice, an offer to sell/purchase or as an invitation or solicitation to do so. The scheme may or may
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not have exposure to the mentioned stocks

Aditya Birla Sun Life AMC Ltd.

 What keeps all of us together!
Unmatched market leadership in under-penetrated category, strong brand equity, robust pricing power and superior management
bandwidth would continue to drive growth
Starting out as an adhesive player in the office supplies space, the company has expanded its presence into emerging segments
like mechanized joinery, modular furniture, flooring, automotive care and water proofing.
Benefits from the allocation for the flagship rural housing scheme - `23000 Crs in FY18BE (a jump of 44% from PY)
It has been able to create several brands in specialty chemicals. Humorous campaigns conceptualised by company’s ad agency have been
the backbone behind consumer awareness of the brands and their benefits

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The stocks mentioned above shall be deemed not to constitute an advice, an offer to sell/purchase or as an invitation or solicitation to do so. The scheme may or may not have exposure to the mentioned stocks
Source: MoFSL, Emkay, JP Morgan

Aditya Birla Sun Life AMC Ltd.

 Investment Strategy
Diversified investment approach with exposure to around
50-60 stocks Illustration of Value Chain & Opportunity analysis
Auto & Auto Ancs
Multi-cap orientation with exposure to large caps in the range
of 35-50%
Bottom-up investment style focusing on companies selected
through fundamental research Bajaj Highly competitive;
Auto, Hero Two Capital intensive,
Honda, Eicher Wheelers Brand focused;
Portfolio seeks to gain from the immediate beneficiaries as Motors, TVS
Low margins
well as second/third order beneficiaries in industries
benefiting out of rural upsurge
Medium intensity CEAT, MRF,
Stock Selection parameters include – competition; higher JK Tyre,
Tyres Dunlop,
cyclicality; Goodyear,
Expected Growth in earnings & rerating fewer OEMs Apollo Tyre

Scale & reach

Differentiated business strategy Phillips Carbon
Black, SKI
Low competition
Carbon
Carbon delivers better
Black margins than higher
Black, Royal
Carbon Black order industries

The stocks mentioned above shall be deemed not to constitute an advice, an offer to sell/purchase or as an invitation or
solicitation to do so. The scheme may or may not have exposure to the mentioned stocks

Aditya Birla Sun Life AMC Ltd.

 Our test results show..

Theme beneficiaries (Investment Universe): Investment Universe Returns analysis

Universe – 239 Mid Cap – 66 27.3%

3yr
Large Cap – 41 Small Cap – 132 11.05%
Investment
Universe
39.2% Returns
2yr 23.71% BSE 500 (TRI)

Diversified Sectors benefitting from the theme: 31.2%

1yr 24.31%

Banking NBFCs 0% 5% 10% 15% 20% 25% 30% 35%

Auto & Auto ancillaries Agri. products

Model Portfolio BSE500
Chemicals Building material
EPS Growth (FY17-20E) 26.5% 20.3%
Consumer durables Domestic Pharma & Healthcare
Sales Growth (FY17-20E) 13.8% 12.0%
Retail Textiles
ROE (FY18) 31.1% 10.8%

Aditya Birla Sun Life AMC Ltd.

 Key reasons to invest NOW
Being the highest focus area for Government currently, Rural rejuvenation is likely to be the
highest growth area in the economy
A differentiated portfolio strategy to focus on high growth & rerating prospect companies across
the value chain of all benefitting industries
Variety of reasonably priced investment opportunities available with strong returns potential
across these beneficiary sectors - Rerating potential on account of this mega opportunity yet to
be fully priced in
‘Ujjwal Bharat’ is perhaps the only theme which has no ambiguity in terms of Govt intent & other
tailwinds and also has the maximum amount of consensus for achievement of desired results
Ujjwal Bharat will also be the driver of Consumption & Investment trend in India in years to come
and be one of the most sustainable themes!

Govt Socialism is on the rise globally; it has been responsible for rural
transformation across the globe
Ujjwal Bharat is a direct play on Govt priorities and as well as opportunity to gain
from the other businesses that are of more derived growth nature

Aditya Birla Sun Life AMC Ltd.

 Scheme Features
Scheme Name Aditya Birla Sun Life Resurgent India Fund – Series 6

Fund Manager Mr. Satyabrata Mohanty & Mr. Milind Bafna

Scheme Type A close ended Diversified Equity Scheme

The investment objective of the scheme is to provide capital appreciation by investing primarily in equity and equity related securities that are
likely to benefit from recovery in the Indian economy. 
Scheme objective
The Scheme does not guarantee/indicate any returns. There can be no assurance that the schemes’ objectives will be achieved

Scheme Benchmark S&P BSE 500

Asset Allocation Equity & Equity related securities: 80%-100% | Money Market & Debt instruments: 0-20%

The scheme will have duration/tenure of 3.5 years from and including the date of allotment. The NAVs of the scheme will be announced on
every Business Day. No redemption or repurchase will be permitted prior to maturity of the Scheme. The scheme will be listed on NSE / BSE
Liquidity and/or any other recognized stock exchanges as may be decided by AMC from time to time and the Unit holders who wish to redeem units may
do so through Stock Exchange at prevailing listed price on such Stock Exchange.

Plans/Options Regular Plan and Direct Plan; Both plans will have two options: Growth and Dividend. Dividend option will have two facilities: Payout and Sweep.

Entry & Exit Load Entry Load : NIL; | Exit Load : NIL

NFO open date 21 February 2018

NFO close date 07 March 2018

Note: For details, refer SID/KIM of the scheme.

Aditya Birla Sun Life AMC Ltd.

 Aditya Birla Sun Life Resurgent India Fund Series - 6

This product is suitable for investors who are seeking: Riskometer

Long term capital growth

Invests in equity and equity related securities that are likely to

benefit from recovery in the rural economy.

LOW HIGH

Investors understand that their principal

will be at moderately high risk

*Investors should consult their financial advisers if in doubt whether the product is suitable for them.

Aditya Birla Sun Life AMC Ltd.

 Thank you

Aditya Birla Sun Life AMC Ltd.

 Disclaimer
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