January 2019

SUNDARAM ALTERNATE ASSETS LIMITED Sundaram India Secular Opportunities Portfolio (SISOP)

November 2018

Portfolio to capture the India Story3Q Quality Approach To Stock Selection

Quality of Business

Pricing Power, Profitability, Growth, Brand Strength,Capital Intensity, Complexity of Business

Quality of Management

Past Track Record, Management Bandwidth, CorporateGovernance

Quality of Financials

Capital Allocation, Leverage, Cash Flow Generation,Return on Capital

• Concentrated ~15 stock portfolio

• Across market cap – “Multi Cap” (skewed toward large cap)

• Long tem orientation in portfolio building i.e. >3 years

“Compounding Stories”

i. Grow more than 1.5x nominal GDP growth

ii. Potential to generate ~ 20% cash flow / earnings growth acrossmarket cycles

iii. ROE: > 20%

iv. Self funded model

• Companies should exhibit high Corporate Governancestandards, led by visionary leadership.

Key Features Sector Bets (%) - Underweight/Overweight vs Benchmark

-12.4

-11.7

-4.7

-3.9

-3.3

-3.1

-1.5

-1.3

-0.9

-0.8

-0.4

-0.1

-0.0

1.8

2.2

2.9

5.5

6.2

22.2

Energy

IT

Pharma

Construction

Metals

Industrial Manufacturing

Cement & Cement Products

Telecom

Chemicals

Fertilisers & Pesticides

Healthcare Services

Others

Paper

Automobile

Services

Textiles

Financial Services

Media & Entertainment

Consumer Goods

This portfolio typically invests across cap curves targetingcompanies with sustainable competitive advantages and reasonablevaluations based on our analysis of fair value.

Target Investors

To generate capital appreciation across market cycles by investingin a concentrated set of high conviction stocks.

Objective

Strategy Review (SISOP)

Market Capitalization (%)

Large Cap Mid Cap Small Cap Cash & Others

58 32 7 4

Services

ConsumerDiscretionary

Auto

BFSI

EXPERT SOLUTIONSHAND DELIVERED

SUNDARAM ALTERNATE ASSETS SISOP Portfolio

January 2019

SISOP is a concentrated strategy of up to 15 stocks. We continue to like companies which are part of fast growing segments of the economy like retail credit & consumer discretionary. Its importantthat these companies despite being leaders in the space, are yet scalable and have smaller market shares. For eg. HDFC bank and Titan are part of our top holdings, are best run companies in thesector they operate, but their market share is still in single digit and hence provide huge scope to grow. We also lay lot of emphasis on companies which have good balance sheets and which arebeing run by excellent management.The strategy has managed to beat the benchmark from a 1 year perspective and marginally underperforming from MTD basis. Last month underperformance can be partly explained by sharp movein Information Technology space (Q3 results were better than expected) in which we have no investment.During the month Titan, Aditya Birla Fashion & Retail Ltd and Britannia contributed to performance while Max Financial, Quess Corp and Eicher Motors underperformed. Eicher motors continues towitness downward pressure on volumes due to poor demand environment and new launches from competition. While we turned negative on auto sector month back and sold our large holdings wecontinue to like Eicher Motors from long term perspective. We believe the underperformance in the stock is due to short term issues and not structural and we expect company to deliver good returnto investors in medium to long term. So far Q3 earnings for PVR, Bajaj Finance, Chola, HDFC Bank, AU Small Finance, Quess Corp have been declared. PVR, Bajaj Finance and Chola managed to beat expectation and saw someearnings upgrade. HDFC Bank met expectations, while AU Small Finance and Quess Corp reported lower than expected earnings.

November 2018

1Y 2Y 3Y 5Y

SISOP -6.3 7.6 11.3 19.7

NIFTY 500 -7.2 10.5 12.4 13.8

NIFTY -1.8 12.5 12.7 12.2

Excess Return to Nifty 500 0.9 -2.8 -1.1 5.8

Excess Return to Nifty -4.5 -4.8 -1.4 7.5

Performance (%)

Strategy Benchmark

Annualised returns 21.1 9.9

Annualised Standard Deviation 14.6 15.0

Beta 0.7 -

Sharpe Ratio 0.9 -

Correlation 0.8 -

Alpha 11.7 -

Performance Measures - Since Inception

Strategy Benchmark Excess returnCY 2011 8.5 -27.2 35.7CY 2012 38.0 31.8 6.1CY 2013 9.2 3.6 5.6CY 2014 77.5 37.8 39.7CY 2015 0.6 -0.7 1.3CY 2016 7.6 3.8 3.8CY 2017 28.6 35.9 -7.3CY 2018 -3.1 -3.4 0.3YTD 2019 -3.1 -1.8 -1.3

Calendar Year Performance (%)

BenchmarkFund

` 150.1 Lakhs

` 55.0 Lakhs

Feb 2010 Jan 20190

20

40

60

80

100

120

140

160

180

Value of ` 25 Lakhs invested at launch

Financial Services38.3%

Consumer Goods, 35.7%

Automobile, 8.3%

Media & Entertainment, 6.8%

Services, 3.9%Textiles, 3.4%

Cash, 3.5%

Sector Allocation

22.2

9.2

13.0

Strategy Benchmark Excess return

Performance Since Inception - February 2010 (%)

Britannia Industries Ltd

HDFC Bank Ltd

Titan Co Ltd

Bajaj Finance Ltd

Eicher Motors Ltd

Top Holdings - # Stocks -15

Compounded annualised returns are in percentage, excess returns is in percentage pointCompounded annualised returns for periods greater than one year

Returns are in percentage; Excess Returns are in percentage points

Wt. Avg. Market cap 1,14,106 Crs

Key Contributors to the Strategy

Name of the stocks Weighted Market Gain/LossAvg Cost (`) Price (`) %

HDFC Bank Ltd 468 2,080 345

Titan Industries Ltd 502 996 98

Kotak Mahindra Bank Ltd 694 1,256 81

All data as of 31 January 2019 Source: Inhouse computation

EXPERT SOLUTIONSHAND DELIVERED

SUNDARAM ALTERNATE ASSETS SISOP Portfolio

January 2019

November 2018

Key Holdings

Disclaimer

General Disclaimer: Returns over a period of one year are on a compounded annualized basis • All returns are in percentage • Performance as of 31 January 2019 • Past performance may or may not be sustained in future • Returns represented are of a modelportfolio. The model portfolio return indicated in this document may not represent the returns of individual portfolio It should not be construed as investment advice to any party. All opinions, figures, charts/graphs, estimates and data included in this document areas on 31 January 2019 and are subject to change without notice. While utmost care has been exercised in preparing this document, Sundaram Alternate Assets Limited does not warrant the completeness or accuracy of the information and disclaims all liabilities,losses and damages arising out of the use of this information.Detailed Disclaimer: This document is issued by Sundaram Alternate Assets Limited registered with the Securities and Exchange Board of India. This document is produced for information purposes only and not a complete disclosure of every material fact and termsand conditions. It does not constitute a prospectus or disclosure document or an offer or solicitation to buy any securities or other investment The statements contained herein may include statements of future expectations and other forward-looking statements thatare based on our current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. Investors shall be fully responsible/liable for any decision taken on the basis of this document. The material relating to economy, market and industry is based upon information sourced from different agencies - Government as well as Private. Therefore, the Portfolio Manager will not attest for thereliability of such information. Investors should before investing in the portfolio make their own investigation and seek appropriate professional advice. Investments in Securities are subject to market and other risks and there is no assurance or guarantee that theobjectives of any of the strategies of the Portfolio Management Services will be achieved. • Clients under Portfolio Management Services are not being offered any guaranteed/assured returns. • Past performance of the Portfolio Manager does not indicate the futureperformance of any of the strategies. • The name of the Strategies do not in any manner indicate their prospects or return. • The investments may not be suited to all categories of investors. • The material is based upon information that we consider reliable, but wedo not represent that it is accurate or complete, and it should not be relied upon as such. • Neither Sundaram Alternate Assets Limited. , nor any person connected with it, accepts any liability arising from the use of this material. The recipient of this material shouldrely on their investigations and take their own professional advice. • Opinions, if any, expressed are our opinions as of the date of appearing on this material only. While we endeavour to update on a reasonable basis the information discussed in this material, theremay be regulatory, compliance, or other reasons that prevent us from doing so. • The Portfolio Manager is not responsible for any loss or shortfall resulting from the operation of the strategy. • Recipient shall understand that the aforementioned statements cannotdisclose all the risks and characteristics. The recipient is requested to take into consideration all the risk factors including their financial condition, suitability to risk return, etc. and take professional advice before investing. As with any investment in securities, theValue of the portfolio under management may go up or down depending on the various factors and forces affecting the capital market. Disclosure Document shall be obtained and read carefully before executing the PMS agreement. • Prospective investors and othersare cautioned that any forward - looking statements are not predictions and may be subject to change without notice. • For tax consequences, each investor is advised to consult his / her own professional tax advisor. • This document is not for public distribution andhas been furnished solely for information and must not be reproduced or redistributed to any other person. Persons into whose possession this document may come are required to observe these restrictions. Distribution Restrictions – This material should not becirculated in countries where restrictions exist on soliciting business from potential clients residing in such countries. Recipients of this material should inform themselves about and observe any such restrictions.

Stocks Name Rationale

Britannia Industries Ltd

• Britannia is the market leader with 33% share in the biscuits category and is among the fastest growing company in the category. The company has presence in biscuits, cakesand bakery products , Through 3rd party manufacturing the company has entered into the fast growing dairy sector through products like curd, cheese and butter.

• Focus on direct distribution expansion and capturing share in Hindi Belt. Apart from sustainable sales growth, the company has also focused on operational efficiency which hashelped in improving the EBITDA margins by over 10% in last 5-6 years. The company continues to focus on cost savings, efficiency and productivity improvement programs todrive margins, apart from product mix.

• While, there is competitive intensity in biscuits category, organised players continue to gain share over unorganised players. Category is growing at 7-8% in value. Britanniacontinues to gain share from organised as well as unorganised players. Distribution expansion, increased share in rural market, entry into new geography every year has been thestrategy of Britannia.

• Company will continue to focus on new products and FY19 to be benchmark year in terms of innovation and premiumisation. There is huge capacity expansion happening inbiscuits and dairy, which will also play over the next 1-2 years, which will also drive cost efficiencies. The story of premiumisation in biscuits and other categories is yet to playout for Britannia, which could drive significant margin gains for the company in forthcoming years.

• We are expecting 14-15% revenue CAGR and over 25% earnings CAGR over FY18-20.

HDFC Bank

• HDFC Bank is the market leader in most of the retail segments (ex Housing) the bank operates in. On the corporate front the bank now has full capabilities on the DCM, project financingand syndication front which puts the bank in a lead position to gain market share from PSU banks.

• In addition to banking services, HDFC Bank also offers Securities trading through HDFC Securities and other financing products through HDB Financials.• The key differentiation of HDFC Bank is that it is one of the few banks to offer all products in all the branches for all the segments of customers in all geographies. This together with

lowest cost of funding and strong processes means that the customer especially the good quality borrowers get the best deal. • On the liabilities front HDFC Bank has one of the best technology platform and a wide branch network essentially giving best in class service to customer.• 11 of the 21 PSU banks are in PCA which puts severe restrictions on their lending capabilities. Banks like HDFCB will benefit from the situation to gain market share in corporate lending.• HDFC Bank is likely to deliver PAT growth of 20% CAGR over next 2-3 years which should translate into EPS CAGR of 18% given the expected Rs 240bn capital raising and some ESOP

dilution.

Eicher Motors Ltd

• Eicher Motors is the manufacturer of the marquee ‘Royal Enfield’ ( RE) brand of motorcycles, Eicher commercial vehicles and Volvo trucks. Royal Enfield (RE) dominates the>250cc segment (95% market share) with brands such as ‘Classic’, ‘Thunderbird’ and ‘Himalayan’.

• RE is an inspiration brand among Indians and is likely to penetrate further in the 2 Wheeler market in which Eicher motors has just 5% market share as the per capita incomelevels in India grow

• RE has been increasing network penetration in the hitherto underpenetrated markets such as Uttar Pradesh, Madhya Pradesh etc.• While mature markets are entering a phase of consolidation, these newer markets would bring in incremental volume growth for the company.• CV segment grew 12.5% in volumes in FY18. With improving economic growth, we expect the CV segment to register 10-11% volume growth over FY19 and 20.• We estimate a steady 20% earnings growth for the consolidated business primarily driven by RE business.

1. Strong track record 2. Low Churn 3. Time Tested stock Selection Process 4. Reach across Country 5. Transparency 6. Strict adherence to risk guidelines7. Shared Research Capabilities

Reporting Statements andServicing

Monthly performance Statements Transactions, Holding & Corporate action reports, Annual CA certifiedStatement of the account & Online access

Why Sundaram PMS ?

Customer Services

Investment Horizon Above 3 years

Asset Allocation (%) Equity: 95-100; Cash: 0-5

Benchmark Nifty 500

Fund Manager Madanagopal Ramu

Fund Facts

EXPERT SOLUTIONSHAND DELIVERED

SUNDARAM ALTERNATE ASSETS SISOP Portfolio

January 2019