Motilal Oswal Asset Management Company Ltd. (MOAMC) is a public limited company incorporated under the Companies Act, 1956 on November 14, 2008, having its Registered Office at 10th Floor, Motilal Oswal Tower, Rahimtullah Sayani Road, Opposite Parel ST Depot, Prabhadevi, Mumbai - 400025.
Motilal Oswal Asset Management Company Ltd. has been appointed as the Investment Manager to Motilal Oswal Mutual Fund by the Trustee vide Investment Management Agreement (IMA) dated May 21, 2009, executed between Motilal Oswal Trustee Company Ltd. and Motilal Oswal Asset Management Company Ltd.
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Motilal Oswal Dynamic Fund (Div-A) - 10.6871Motilal Oswal Dynamic Fund (Div-Q) - 10.4984Motilal Oswal Dynamic Fund (G) - 11.3614Motilal Oswal Dynamic Fund-Dir (Div-A) - 10.8441Motilal Oswal Dynamic Fund-Dir (Div-Q) - 10.4758Motilal Oswal Dynamic Fund-Dir (G) - 11.8131Motilal Oswal Equity Hybrid Fund - Direct (G) - 10.0372Motilal Oswal Equity Hybrid Fund - Regular (G) - 9.7978Motilal Oswal Focused 25 Fund - Direct (D) - 14.3528Motilal Oswal Focused 25 Fund - Direct (G) - 20.908Motilal Oswal Focused 25 Fund (D) - 13.1183Motilal Oswal Focused 25 Fund (G) - 19.0383Motilal Oswal Large and Midcap Fund - Dir (D) - 8.0442Motilal Oswal Large and Midcap Fund - Dir (G) - 8.0442Motilal Oswal Large and Midcap Fund (D) - 7.9785Motilal Oswal Large and Midcap Fund (G) - 7.9785Motilal Oswal Liquid Fund - Direct (Div-D) RI - 10.0077Motilal Oswal Liquid Fund - Direct (Div-F) RI - 10.015Motilal Oswal Liquid Fund - Direct (Div-M) - 10.0407Motilal Oswal Liquid Fund - Direct (Div-Q) - 10.014Motilal Oswal Liquid Fund - Direct (Div-W) RI - 10.0105Motilal Oswal Liquid Fund - Direct (G) - 10.71Motilal Oswal Liquid Fund - Regular (Div-D) RI - 10.0055Motilal Oswal Liquid Fund - Regular (Div-F) RI - 10.0143Motilal Oswal Liquid Fund - Regular (Div-M) - 10.0401Motilal Oswal Liquid Fund - Regular (Div-Q) - 10.3654Motilal Oswal Liquid Fund - Regular (Div-W) RI - 10.0175Motilal Oswal Liquid Fund - Regular (G) - 10.6891Motilal Oswal Long Term Equity Fund (D) - 12.1765Motilal Oswal Long Term Equity Fund (G) - 13.742Motilal Oswal Long Term Equity Fund -Dir (D) - 13.1303Motilal Oswal Long Term Equity Fund -Dir (G) - 14.7416Motilal Oswal Midcap 30 Fund (D) - 13.6548Motilal Oswal Midcap 30 Fund (G) - 19.1141Motilal Oswal Midcap 30 Fund-Dir (D) - 13.9469Motilal Oswal Midcap 30 Fund-Dir (G) - 20.6171Motilal Oswal Multicap 35 Fund (D) - 17.4708Motilal Oswal Multicap 35 Fund (G) - 19.8304Motilal Oswal Multicap 35 Fund-Dir(D) - 17.4527Motilal Oswal Multicap 35 Fund-Dir(G) - 20.9838Motilal Oswal Nasdaq 100 FOF - Direct (G) - 13.128Motilal Oswal Nasdaq 100 FOF - Regular (G) - 13.0569Motilal Oswal Nifty 50 Index Fund - Direct (G) - 7.1988Motilal Oswal Nifty 50 Index Fund (G) - 7.1903Motilal Oswal Nifty 500 Fund - Direct (G) - 8.0927Motilal Oswal Nifty 500 Fund (G) - 8.0618Motilal Oswal Nifty Bank Index Fund - Direct (G) - 6.9435Motilal Oswal Nifty Bank Index Fund (G) - 6.9175Motilal Oswal Nifty Midcap 150 Index Fund (G) - 8.2499Motilal Oswal Nifty Midcap 150 Index Fund-Dir (G) - 8.2813Motilal Oswal Nifty Next 50 Index Fund - Dir (G) - 7.8421Motilal Oswal Nifty Next 50 Index Fund (G) - 7.8274Motilal Oswal Nifty Smallcap 250 Index Fund (G) - 7.3975Motilal Oswal Nifty Smallcap 250 Index Fund-Dir(G) - 7.4261Motilal Oswal Ultra Short Term Fund - Dir (Div-D) - 9.5092Motilal Oswal Ultra Short Term Fund - Dir (Div-F) - 9.5271Motilal Oswal Ultra Short Term Fund - Dir (Div-M) - 9.5161Motilal Oswal Ultra Short Term Fund - Dir (Div-Q) - 9.6528Motilal Oswal Ultra Short Term Fund - Dir (Div-W) - 9.5198Motilal Oswal Ultra Short Term Fund - Dir (G) - 13.4739Motilal Oswal Ultra Short Term Fund (Div-D) - 9.5127Motilal Oswal Ultra Short Term Fund (Div-F) - 9.5226Motilal Oswal Ultra Short Term Fund (Div-M) - 9.5132Motilal Oswal Ultra Short Term Fund (Div-Q) - 9.6515Motilal Oswal Ultra Short Term Fund (Div-W) - 9.5161Motilal Oswal Ultra Short Term Fund (G) - 13.1022

GST likely to reduce inflation

Blog Blog Details
  • May 29, 2017
  • Mr. Siddharth Bothra|
  • Fund Manager, MF

With the stock market at a record high, is the risk-reward ratio no longer in favour of the investors?
We are still positive on the Indian equity markets from the long-term perspective, if the growth opportunity and key catalysts remain intact. We believe investors should view the ongoing market correction and volatility in the context of the sharp up-move the Indian markets have seen in the past 12-15 months. Following such moves, market consolidation is not surprising and is often healthy for the market as a whole. In our opinion, the risk-reward ratio continues to be favourable for long-term equity investors.

Has the current earnings season delivered on expectations?
The ongoing earnings season has had its share of positive and negative surprises. But overall, it seems to be delivering on expectations. So far, the revenue growth has been broadly in line with expectations at about 8% for Nifty, but profitability growth has exceeded expectations at 6% year-on-year. There have been positive surprises in the discretionary consumption sectors like jewellery, cement and consumer electronics, which have reported better numbers than expected. Even in the consumer universe, volume growth has been better than anticipated as the impact of demonetisation seems to be fading. We have also seen some strong results in auto and financials, whereas large pharma companies have disappointed.

GST rates are finally in place. Are there any factors that have taken you by surprise?
While the expectation was that GST could be inflationary, the announced rates suggest it is likely to reduce inflation. Most primary articles and food categories have been assigned lower tax rates, which would reduce CPI inflation. Most of the rates are largely in line with what was anticipated. However, building materials, five-star hotels, detergents, hair creams, ayurvedic products products and multiplexes have been assigned higher than expected tax rates. There have been a few positive surprises like cigarettes, SUVs and coal.

Which themes or sectors do you expect to do well over the next 3-5 years?
We are positive on the banking and financial services sector in general, and the housing finance and insurance sectors in particular. Some of the key themes we find attractive for the next three to five years are: financial savings moving from physical to financial assets, shift from unorganised sector to the organised, and plays benefiting from structural changes in rural India.

Do large-caps make more sense at current levels or do you think mid-caps still hold more potential?

Mid and small caps as a category have had a dream run over the past 3-4 years. Over 2014-16, the CNX Midcap 100 Index has posted 21.2% CAGR returns, while the large-cap CNX Nifty Index has posted only 9.1% returns. As the earnings trajectory for large-cap gains traction, the large-cap performance could revert to the mean. Going forward, in the medium term the risk-reward seems more favourable for large-caps, given the expectation of earnings revival and the valuation differential between large-caps and midcaps. Nonetheless, the long-term potential for mid-caps remains strong since the probability of finding fast-growing and emerging companies is higher in this category.

Do large-caps make more sense at current levels or do you think mid-caps still hold more potential?

The real estate sector has seen some key developments in recent times. These include the implementation of the Real Estate Regulatory Authority (RERA), the push for affordable housing, and issuance of government sops like the Pradhan Mantri Awas Yojana. Successful implementation of RERA should be a key positive for large organised real estate companies as it would allow them to gain market share from the unorganised segment. While there are structural positives for the sector, in the near term it is witnessing oversupply in most of the key markets, due to the subdued demand over the past few years. It could take another 4-5 quarters, or more, for demand and supply in the sector to reach equilibrium. Moreover, given the poor corporate governance standards in this sector, our advise for investors is to choose and stick to quality companies that have proven track records.

Is the long -term structural story for IT firms intact or should investors moderate return expectations?

Indian IT services companies are going through a major transition as their legacy business is being challenged by newer technologies in the digital era. The legacy business is witnessing major changes on two fronts—pricing and automation. As a result of this, both volumes and pricing are under pressure. These issues are reflected in Nasscom’s revenue guidance, which has been steadily declining for several years, and stands at 6-10% for 2017-18, down from a high of 13-15% in 2014-15. Though the digital vertical is growing rapidly, for many Indian IT services companies, its contribution to overall revenue is still low, and hence, not enough to negate the pressure from the legacy vertical. In the long term, many of the key Indian IT firms should be able to successfully transition their business models, but in the near to medium term, growth could continue to be challenged for most companies in the sector.

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