Equity & Debt Strategy

Mid Nov – Dec’ 2018

Equity Market Update &

Equity MF Strategy

Confidential | 3

Nifty 50 fell 5% in October but has recovered in November

15,500

16,000

16,500

17,000

17,500

18,000

18,500

9,500

9,700

9,900

10,100

10,300

10,500

10,700

10,900

3-Oct 9-Oct 15-Oct 21-Oct 27-Oct 2-Nov 8-Nov 14-Nov

NIFTY Index Nsemcap index

Sell-off in global

markets on sharp rise

in US bond yields

RBI keeps

policy rates

unchanged

INR rise & global

rally led to market

High crude prices

& depreciating

INR impacted

market negatively

Uninspiring

results kept

market lowFalling crude prices,

bond yields & robust

ICICI results helped

markets recover

1,414

-1,918

-9,461

-26,626

286

-1,277

828

4,0183,883 4,057

11,585

21,420

-30,000

-20,000

-10,000

0

10,000

20,000

30,000

Jul 18 Aug 18 Sep 18 Oct 18

FII DII excl MF MF

Nifty 50 saw corrections along with Midcap 100; weak macros,

trade tariffs & NBFC concerns dampened sentimentsFII selling rose sharply leading to market corrections, MF

buying however remained strong despite falling markets

Technology sector has benefited from ~14% INR depreciation

in CYTD18

Source: Bloomberg, Kotak Institutional Equities (KIE), AMFIAs of 14th November, 2018

cr

Net Flows to Equity Mutual Funds remained above 15k cr,

strong SIP flows continued

cr

9,639 10,08511,647

15,779

7,554 7,658 7,727 7,985

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

Jul 18 Aug 18 Sep 18 Oct 18

Net Equity Inflows SIP

Net investment in Cash market

Note: Amount excludes Arbitrage Funds, assumes 65% equity flow from Balanced

24.7%

-6.3%-2.6%

-4.7%

-35.1%

-15.4%

-23.1%

-4.2%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

Confidential | 4

776

333270

120164

0

200

400

600

800

1000

Nov 18 Dec 18 Jan 19 Feb 19 Mar 19

Maturities of MF Debt in NBFC + HFCs forFY19 (Rs Bn)

Banks have now become more competitive vs bond marketsMF Debt of ~ INR 1.7 tn in NBFCs and HFCs is maturing over

Nov ‘18 – Mar ’19 and is front-ended in Nov

Auto sales have been slowing sequentially in the past 3

monthsPAT margins have reduced in the current year over higher

input costs

As of 14th November 2018 Source: Bloomberg, CLSAYoY% growth

Domestic Market Update

10.63 10.6

9.839.63

9.0

9.2

9.4

9.6

9.8

10.0

10.2

10.4

10.6

10.8

Dec 17 Mar 18 Jun 18 Sep 18

12-month trailing PAT margin for Nifty 50 Index

37.5

-2.7 -2.5 -5.6

22.3

8.2

2.9 4.1

-10

-5

0

5

10

15

20

25

30

35

40

Jun 18 Jul 18 Aug 18 Sep 18

Passenger vehicle (% YoY)

Two wheeler (% YoY)

6.50

7.00

7.50

8.00

8.50

9.00

9.50

Sep16

Nov16

Jan17

Mar17

May17

Jul17

Sep17

Nov17

Jan18

Mar18

May18

Jul18

Sep18

Nov18

1 Yr MCLR 3Yr AAA Corp Bond

Confidential | 5

0

2

4

6

8

10

12

Miss In Line Beat Estimate

Earnings and Valuation

Post recent correction, Mid Caps now at a 2% discount on

large caps

Q2FY2019 Nifty 50 earnings growth has been ~6%, earnings

disappointed in consumer, Tech and select Banking

FY19 earnings outlook dampened after Q2FY19 resultsPost uninspiring Q22019 results, earnings recovery

expectations has been put back by a year to FY19-20

400.00

450.00

500.00

550.00

600.00

650.00

700.00

Apr 15 Aug 15 Dec 15 Apr 16 Aug 16 Dec 16 Apr 17 Aug 17 Dec 17 Apr 18 Aug 18

FY2019 FY2018 FY2017

Source: Bloomberg, KIE * Based on KIE Estimates on free float basis.As of 14th November 2018

14

16

18

20

22

24

26

Nov 15 May 16 Nov 16 May 17 Nov 17 May 18 Nov 18

12m Forward PE of Mid Cap over Large Cap

Nifty Mid cap

Nifty 50

2% Discount

No of companies

466505

658

765

0

100

200

300

400

500

600

700

800

900

FY2018 FY2019 FY2020 FY2021

Est. EPS

+8%+30%

+16%

Confidential | 6

Key Events in next few months

Debt market stability (RBI and NBFC CPs) and State elections are two important events which we are monitoring

November3rd week

MayApril

Tailwin

ds

He

adw

ind

s

30/11 -US-China meeting in G20

18/12 FOMC Meeting

Most NBFC maturities to complete by Nov

end

05/12 RBI Policy

IBC Resolution

General Election06/12 -OPEC Meeting

November4th week

Dec 2nd

weekDec 4th

week

11/12 –State Election result

Source: Bloomberg

Confidential | 7

US Fed kept policy stance with its strong GDP growth impacting EMs equities including India

Since 1st Jan, Emerging markets have corrected by 18%, India

and US have been an outlier

INR depreciated 14% in CYTD19 on macro concerns despite

RBI intervention

Fed Balance sheet leaner by $306 bn in last 1 Year; ECB Bond

buying slowing, reduced from 30bn to 15bn monthly

As of 14th November 2018Source: Bloomberg

US economy growing at strong rate seen in GDP numbers over 2

years

1.3%

-16.6%-18.0%

-20.7%

-16.5% -15.5%

-10.9%

1.0%

-25%

-20%

-15%

-10%

-5%

0%

5%

YoY%

In local currency terms

1,000

2,000

3,000

4,000

5,000

3,900

4,000

4,100

4,200

4,300

4,400

4,500

4,600

Nov 1

4

Jan

15

Ma

r 15

Ma

y 1

5

Jul 15

Se

p 1

5

Nov 1

5

Jan

16

Ma

r 16

Ma

y 1

6

Jul 16

Se

p 1

6

Nov 1

6

Jan

17

Ma

r 17

Ma

y 1

7

Jul 17

Se

p 1

7

Nov 1

7

Jan

18

Ma

r 18

Ma

y 1

8

Jul 18

Se

p 1

8Fed Assets ECB Assets

$ Bn € Bn

62

64

66

68

70

72

74

76

385

390

395

400

405

410

415

420

425

430

Jan 18 Feb 18Mar 18 Apr 18 May18

Jun 18 Jul 18 Aug18

Sep 18 Oct 18 Nov18

Forex Reserves ($ Mn) USDINR 5.55.4

4.64.54.2

3.94.13.4

2.6

0.0

1.0

2.0

3.0

4.0

5.0

6.0

Sep 18Jun 18Mar 18Dec 17Sep 17Jun 17Mar 17Dec 16Sep 16

Confidential | 8

Key Triggers

• Global Economic data : World GDP improving

• Resolution of NPA: Effective addressal of NCLT lists

• Weaker Rupee: To benefit export-oriented sectors like Auto, Chemicals, IT and Pharma

• Rural recovery: Government focus on rural economy includingincrease of MSP could benefit rural consumption

• Inflation: Despite INR slide, CPI inflation is lower than RBI’s target

Positive Triggers

• Trade Wars: Further tariffs imposed by US/China and strict enforcement of Iran sanctions

• Monetary Policy: Faster than expected monetary tightening in Europe and US

• Weaker Macro: Higher crude prices, weaker currency and low GST collection could lead to lower re-rating of Equity valuations

• State Elections : A combined opposition can be a threat to BJP in the upcoming elections

• Weaker Rupee: Would impact on FII flows

• Contagion effect in NBFC sector: Liquidity concerns coupled with ALM mismatch leading to stress in select companies

Risks

Source: Bloomberg, KIE

Confidential | 9

India Equities: Valuations & Strategy – Continue 20% Underweight

Nifty continued its slide for the second consecutive month on statusquo by RBI, uninspiring corporate results, sharp rise in US bond yieldsamongst others. However, over the last few weeks macro concerns haveabated as brent has fallen >20% from peak levels leading to somerecovery in equity markets.

Bond market stability and State elections are two key events which arelikely to drive markets in the short term. Therefore we continue to be“20% Underweight” on equities and see the current rally as anopportune time for fully built portfolios to create some cash position.

Mutual Funds: As domestic liquidity continues to drive markets, weadvise new investments to be staggered in Mutual Funds via SIPs/STPs.

Recommended allocation within equity mutual funds is as under:

• 50% Large Cap allocation (Prefer Large Cap stocks over Mid capsince Mid cap valuations are still above historical levels)

• 50% Multi Cap allocation (such funds currently have a biastoward large cap)

• For investors who want equity exposure but have low appetitefor volatility, they can take equity exposure through AggressiveHybrid Funds. Such funds have around 25% to 30% of theirportfolio into Debt instruments which provides cushion to theportfolio return during market volatility.

Source: EPS Estimates by KIE

Units Now1 Yr

Prior

Macros & Flows

Nifty 50 10,576 10,187

12 Month Forward PE 16.7 17.7

FII Inflow (cumulative CYTD) $ bn -5.59 7.69

MF Inflow (cumulative CYTD) $ bn 7.64 9.33

Gsec Yields % 7.73 7.05

USD INR 72.31 65.42

US Yields 3.15 2.37

Micros

Earnings Growth (KIE Universe) 13.00 -8.1

GDP Growth (Qtr) 8.2 5.6

PMI 53.0 51.3

Non-Food Credit Growth 14.0 7.4

Confidential | 10

Recommended Large Cap, Multi Cap & Balanced Fund Performances

Source: MFI ExplorerReturns are CAGR as on Nov 16, 2018 and for Regular Plans with Growth option. Corpus size is as on Oct, 2018.

Scheme Name Corpus (In crs.) 1 Year 3 Years 5 Years Investor Suitability

Large Cap Funds

Aditya Birla Sun Life Frontline Equity Fund 20,011 -1.37 10.66 15.38 All Risk Profiles except Secure

Axis Bluechip Fund 2,927 7.01 11.92 14.76 All Risk Profiles except Secure

ICICI Prudential Bluechip Fund (erstwhile ICICI Prudential Focused Bluechip Equity Fund) 18,870 1.93 12.47 15.48 All Risk Profiles except Secure

SBI Bluechip Fund 19,097 -1.63 9.77 16.57 All Risk Profiles except Secure

UTI Nifty Next 50 Index Fund 254 - - - All Risk Profiles except Secure

Large & Mid Cap Funds

Aditya Birla Sun Life Equity Advantage Fund (erstwhile Aditya Birla Sun Life Advantage Fund) 5,407 -10.68 10.99 19.03 All Risk Profiles except Secure

IDFC Core Equity Fund (erstwhile IDFC Classic Equity Fund) 2,765 -3.16 12.94 14.08 All Risk Profiles except Secure

Invesco India Growth Opportunities Fund (erstwhile Invesco India Growth Fund) 892 1.14 12.61 17.15 All Risk Profiles except Secure

Kotak Equity Opportunities Fund (erstwhile Kotak Opportunities Fund) 2,254 -4.88 11.27 16.77 All Risk Profiles except Secure

Mirae Asset Emerging Bluechip Fund 5,780 -1.28 17.15 28.54 All Risk Profiles except Secure

Multi Cap Funds (Multi Cap/ Value/ Focused/ Dividend Yield/ Contra)

Axis Focused 25 Fund 5,904 3.13 15.09 16.58 All Risk Profiles except Secure

Kotak Standard Multicap Fund (erstwhile Kotak Select Focus Fund) 20,100 0.33 12.98 19.29 All Risk Profiles except Secure

L&T India Value Fund 7,639 -6.99 11.70 23.03 All Risk Profiles except Secure

Mirae Asset India Equity Fund (erstwhile Mirae Asset India Opportunities Fund) 9,033 2.05 14.67 19.68 All Risk Profiles except Secure

Motilal Oswal Multicap 35 Fund 12,236 -4.02 12.77 - All Risk Profiles except Secure

Mid & Small Cap Funds (Mid Cap/Small Cap)

Aditya Birla Sun Life Small Cap Fund (erstwhile Aditya Birla Sun Life Small & Midcap Fund ) 2,020 -18.47 11.24 21.50 All Risk Profiles except Secure

HDFC Small Cap Fund 5,320 -0.02 17.11 21.16 All Risk Profiles except Secure

Kotak Emerging Equity Scheme 3,140 -8.15 11.72 25.14 All Risk Profiles except Secure

L&T Midcap Fund 3,197 -8.94 14.56 26.11 All Risk Profiles except Secure

Aggressive Hybrid Funds

Aditya Birla Sun Life Equity Hybrid '95 (erstwhile Aditya Birla Sun Life Balanced 95) 13,516 -3.48 9.50 15.38 All Risk Profiles except Secure

L&T Hybrid Equity Fund (erstwhile L&T India Prudence Fund) 9,975 -1.41 9.17 16.39 All Risk Profiles except Secure

Reliance Equity Hybrid Fund 13,039 -2.61 9.48 16.15 All Risk Profiles except Secure

SBI Equity Hybrid Fund (erstwhile SBI Magnum Balanced Fund) 27,082 0.45 9.57 16.13 All Risk Profiles except Secure

Balanced Advantage Funds (Balanced Advantage OR Dynamic Asset Allocation)

ICICI Prudential Balanced Advantage Fund 28,244 2.65 9.14 12.91 All Risk Profiles except Secure

Kotak Balanced Advantage Fund 2,053 - - - All Risk Profiles except Secure

Indices

Nifty 4.58 11.01 12.00

Debt Market Update &

Debt MF Strategy

Confidential | 12

Indicators

Policy Action

• RBI kept rate hike on hold in October focusing on itsinflation target mandate

• Moderate inflation could keep rate hike on hold for now

Inflation

• CPI inflation stood at 13 month low of 3.31% in October• The sequential hardening in the core inflation driven by

miscellaneous items poses some concern• CPI likely to inch towards 4.8% by March 2019 on the back of

pass-through of MSP hikes and elevated core inflation

Corporate and G-Sec Benchmark Yield• G-Sec yield have fallen from peak of 8.2% to 7.75%• Lower crude prices, FII participation and better GST

collection have supported government yields

Liquidity• Liquidity continues to be scarce however RBI has been

infusing liquidity aggressively• RBI has announced INR 40k cr of OMO for November

INR• INR likely to remain under pressure as the DM monetary

policies unwind and their effects on EMs are visible over the next few years

• Lower crude prices gave some respite to depreciating currency this month

G-Sec Supply• RBI has done three INR 96,000 cr of OMO this year,

another INR 28,000 cr announced for remaining part of November

• While Net G-Sec supply net of OMOs and maturities seem to be moderate, SDL supply may be higher.

Debt Market: Key Variables

Source: Bloomberg, KIE

Global Trends• US 10 Year yields have crossed 3% on strong inflation data• Brent has fallen from $86/bbl peak to ~$67/bbl on

expectation of supply exceeding demand • Debt FII flows have been positive for last 1 month

Fiscal Policy• Fiscal deficit in 6 months has touched 95.3% of target. • Fiscal risks remain in spite of govt’s commitment to adhere

to 3.3% target

Confidential | 13

Both Domestic and Foreign Bond market flows have been impacted this year

-7,789

22,970

-6,529

7,560

CYTD2018CY2017CY2016CY2015

-10,000

-5,000

0

5,000

10,000

15,000

20,000

25,000

US

D M

illi

on

FII money has flown out in 2018 due to rising US rates

leading to pressure on INR and yields, Oct-Nov has seen

some reversal

454,432 394,774

604,266

428,557

753,898 785,764 820,654 825,627

Oct 18Sep 18Aug 18Jul 18

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

INR

Cro

res

Liquid Others (Income, Arbitrage & Gilt)

Debt and Liquid funds AUM has been impacted post IL&FS

issue

30,24036,610

42,11236,724

4,698

5,072

5,175

4,315

Jul 18 Aug 18 Sep 18 Oct 18

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

INR

Cro

res

Avg G-Sec Volumes Avg Corp Bond Volumes

Trading activity in both Corporate and Gsec market has

also been impacted since September

129,760

172,460

260,890 267,260

303,970

223,780

174,840

8.20

8.28

8.54

8.33

8.53

8.68

8.65

7.90

8.00

8.10

8.20

8.30

8.40

8.50

8.60

8.70

8.80

Apr 18 May 18 Jun 18 Jul 18 Aug 18 Sep 18 Oct 18

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

INR

Cro

res

CP Issuance 3 Yr AAA PSU Yields

CP issuances which had grown due to rising interest rates

have reduced drastically post September

Note: As of 13th November 2018, Source Bloomberg, AMFI, CCIL, RBI, BSE

Confidential | 14

Macros have started to improve with lower crude and strong GST collection recently

3.31

6.20

-0.14

8.55

Oct17

Nov17

Dec17

Jan18

Feb18

Mar18

Apr18

May18

Jun18

Jul 18 Aug18

Sep18

Oct18

-1.00

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

10.00 CPI (YoY%) Core Inflation

Food Inflation Fuel Inflation

Inflation has been moderate in last few months despite higher

crude prices due to low food inflation

60.00

62.00

64.00

66.00

68.00

70.00

72.00

Jun 16 Sep 16 Dec 16 Mar 17 Jun 17 Sep 17 Dec 17 Mar 18 Jun 18

-2.5

-2.0

-1.5

-1.0

-0.5

0.0

CAD (% of GDP)

CAD has widened from 1% to ~2.5% of GDP due to higher

import bill through Crude, Gold and Electronic items

1007.1

Apr 18 May 18 Jun 18 Jul 18 Aug 18 Sep 18 Oct 18

880

900

920

940

960

980

1000

1020

1040

1060

GST collections improved in October and was close to

breakeven rate of Rs 1.05 tn/month

Note: As of 13th November 2018, Source Bloomberg, PTI

5.50

6.00

6.50

7.00

7.50

8.00

8.50

No

v 1

8O

ct

18

Au

g 1

8J

ul 1

8J

un

18

Ma

y 1

8A

pr

18

Ma

r 1

8J

an

18

Dec

17

No

v 1

7O

ct

17

Se

p 1

7J

ul 1

7J

un

17

Ma

y 1

7A

pr

17

Ma

r 1

7J

an

17

Dec

16

No

v 1

6O

ct

16

Se

p 1

6A

ug

16

Ju

n 1

6

45.00

50.00

55.00

60.00

65.00

70.00

75.00

80.00

85.00

90.00Brent Oil ($/bbl)

Crude above budgeted $65/bbl raises concern on its impact

on Fiscal Deficit, CAD and inflation$/bbl

Rs bn

Yield %

Confidential | 15Note: As of 13th November 2018, Source Bloomberg, MFI

No

v…

No

v…

Oc

t…

Oc

t…

Oc

t…

Oc

t…

Oc

t…

Se

p…

Se

p…

Se

p…

Se

p…

Au

g…

Au

g…

Au

g…

Au

g…

Ju

ly…

Ju

ly…

Ju

ly…

Ju

ly…

Ju

n…

Ju

n…

Ju

n…

Ju

n…

Ju

n…7.50

8.00

8.50

9.00

9.50

10.00 1 Yr CP 3 Yr AAA PSU 3 Yr AA Corp 10 Yr G-Sec

1 Year CP rates have increased while G Sec yields have

softened in last few months

Market will look towards next RBI policy for addressing concerns over Liquidity and rates

7.05

5.50

6.00

6.50

7.00

7.50

8.00

8.50

No

v-1

6

Jan

-17

Ma

r-1

7

Ma

y-1

7

Ju

l-17

Se

p-1

7

No

v-1

7

Jan

-18

Ma

r-1

8

Ma

y-1

8

Ju

l-18

Se

p-1

8

No

v-1

8

Jan

-19

Ma

r-1

9

Ma

y-1

9

Ju

l-19

Se

p-1

9

No

v-1

9

% Y

ield

Repo Rate (1 yr forward) 1 yr OIS

Market Expectation of rate hike as reflected from 1 Year OIS have

reduced lately

-899.26

-2000

-1000

0

1000

12-Oct 22-Oct 1-Nov 11-Nov

Am

ou

nt

in R

s. B

n

Liquidity below neutral level. 1% cut in CRR could release 1.2

lk cr of liquidity in the system

776

333270

120164

0

200

400

600

800

1000

Nov 18 Dec 18 Jan 19 Feb 19 Mar 19

Maturities of MF Debt in NBFC + HFCs for FY19(Rs Bn)

MF Debt of ~ INR 1.7 tn in NBFCs and HFCs is maturing over

Nov ‘18 – Mar ‘19

Confidential | 16

Money Market Fund’s OutperformsHigh quality FMPs to be preferred in tight credit environment

Mar 18 Apr 18 May 18 Jun 18 Jul 18 Aug 18 Sep 18 Oct 18

5.00

5.50

6.00

6.50

7.00

7.50 Tax free FMP

AAA FMPs have become more attractive compared to Tax

Free Bonds on a post tax basis

0.89

0.63

0.8

1.43

2018201720162015

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

Upgrade/Downgrade within High Yield papers have been

subdued for last 3 Years

Note: As of 13th November 2018, Source Bloomberg, MFI

Rs bn

6.66 6.144.81

3.992.81

2.04

0.0

2.0

4.0

6.0

8.0

Liquid Funds Ultra Short / LowDuration Funds

Medium & CreditRisk Funds

Short Term Funds Dynamic Gilt

Performance Comparison

Confidential | 17

17

Tenors G-Sec AAA - PSU AAA- Corp AA+ AA AA- A+

3M 6.1 8.4 8.0 8.3 8.6 9.0 9.4

6M 6.3 8.6 8.3 8.6 8.8 9.2 9.7

1Y 7.3 8.7 8.7 9.0 9.3 9.4 9.9

3Y 7.5 8.6 8.7 9.0 9.2 9.3 9.7

5Y 7.6 8.6 8.7 9.0 9.3 9.4 9.9

7Y 7.8 8.7 8.8 9.1 9.3 9.4 9.9

10Y 7.8 8.7 9.0 9.2 9.4 9.6 10.1

15Y 8.0 8.7 9.0 9.2 9.4 9.6 10.0

Credit SpreadsThe current spreads call for high quality (AAA) in upto 3 year segment

Source: Bloomberg, KIE

Confidential | 18

India Fixed Income: Strategy

G-Sec yield have fallen from peak of 8.2% to 7.75%. Lower crude prices, FII participation and better GST collection have supported bond yields. Liquidity continues to be scarce however RBI has been infusing liquidity aggressively. RBI has done three 96,000 cr of OMO this year, another 28,000 cr announced for remaining part of November. Market Expectation of rate hike as reflected from 1 Year OIS have reduced lately.

The net spread Credit Funds over AAA is not attractive enough to prefer credit exposure. Moreover current environment calls for caution in credit space. Therefore we recommend no allocation to “Credit Funds” and major allocation to AAA oriented Funds.

Due to absolute high yields, we advise investors to allocate excess liquidity to Debt funds at current level via FMPs & roll down strategies.

Investment Focus:Passive Accrual-Oriented Debt funds

High quality portfolios (~100% AAA / Sovereign)

Portfolio is run on a passive accrual basis i.e buying a bond and holding it till maturity thereby earning from the accruing of interest

Higher predictability of return, lower volatility & lower interest rate risk

Prefer core allocations in the 1 to 3 year segment

Source : AMCs, other Financial websites

Confidential | 19

Recommended Short Term Bond, High Yield & Debt Others Performances

Scheme NameCorpus (In

crs.)6m 1Yr 2Yr Investor Suitability

Short Term 1-3 yrs (Corporate Bond/ Banking & PSU/Short Duration)

Aditya Birla Sun Life Corporate Bond Fund 12,462 7.68 5.65 6.08 All Risk Profiles except Secure

Axis Banking & PSU Debt Fund 1,446 7.36 6.29 6.75 All Risk Profiles

ICICI Prudential Banking & PSU Debt Fund 4,635 6.77 4.60 5.15 All Risk Profiles except Secure

IDFC Banking & PSU Debt Fund 776 7.71 5.36 5.71 All Risk Profiles

L&T Triple Ace Bond Fund 359 6.04 3.23 2.25 All Risk Profiles except Secure

Sundaram Corporate Bond Fund 346 6.36 2.30 3.83 All Risk Profiles

Dynamic Debt (Medium to Long Duration/ Dynamic Bond/Gilt)ICICI Prudential All Seasons Bond Fund (erstwhile ICICI Prudential Long Term Plan) 1,999 6.02 4.42 4.78 All Risk Profiles except SecureICICI Prudential Bond Fund (erstwhile ICICI Prudential Income Opportunities Fund) 2,841 6.07 2.72 3.72 All Risk Profiles

Source: MFI ExplorerReturns are CAGR as on Nov 16, 2018 and for Regular Plans with Growth option. Corpus size is as on Oct, 2018.

Confidential | 20

DisclaimerThe aforesaid is for information purposes only and should not be construed to be investment advice under SEBI (Investment Advisory) Regulations.

In the preparation of the material contained in this document, Kotak Mahindra Bank has used information that is publicly available, including information developed in-house. Some of the material used in the document may have been obtained from members/persons other than the Kotak Mahindra Bank and/or its affiliates and which mayhave been made available to Kotak Mahindra Bank and/or its affiliates. Information gathered & material used in this document is believed to be from reliable sources. KotakMahindra Bank however does not warrant the accuracy, reasonableness and/or completeness of any information. For data reference to any third party in this material nosuch party will assume any liability for the same. Kotak Mahindra Bank and/or any affiliate of Kotak Mahindra Bank does not in any way through this material solicit any offerfor purchase, sale or any financial transaction/commodities/products of any financial instrument dealt in this material. All recipients of this material should before dealingand or transacting in any of the products referred to in this material make their own investigation, seek appropriate professional advice

We have included statements/opinions/recommendations in this document which contain words or phrases such as "will", "expect" "should" and similar expressions orvariations of such expressions, that are "forward looking statements". Actual results may differ materially from those suggested by the forward looking statements due torisks or uncertainties associated with our expectations with respect to, but not limited to, exposure to market risks, general economic and political conditions in India andother countries globally, which have an impact on our services and / or investments, the monetary and interest policies of India, inflation, deflation, unanticipatedturbulence in interest rates, foreign exchange rates, equity prices or other rates or prices, the performance of the financial markets in India and globally, changes indomestic and foreign laws, regulations and taxes and changes in competition in the industry. By their nature, certain market risk disclosures are only estimates and could bematerially different from what actually occurs in the future. As a result, actual future gains or losses could materially differ from those that have been estimated

Kotak Mahindra Bank (including its affiliates) and any of its officers directors, personnel and employees, shall not liable for any loss, damage of any nature, including but notlimited to direct, indirect, punitive, special, exemplary, consequential, as also any loss of profit in any way arising from the use of this material in any manner. The recipientalone shall be fully responsible/ are liable for any decision taken on the basis of this material. The investments discussed in this material may not be suitable for all investors.Any person subscribing to or investing in any product/financial instruments should do so on the basis of and after verifying the terms attached to such product/financialinstrument. Financial products and instruments are subject to market risks and yields may fluctuate depending on various factors affecting capital/debt markets. Please notethat past performance of the financial products and instruments does not necessarily indicate the future prospects and performance thereof. Such past performance mayormay not be sustained in future. Kotak Mahindra Bank (including its affiliates) or its officers, directors, personnel and employees, including persons involved in thepreparation or issuance of this material may; (a) from time to time, have long or short positions in, and buy or sell the securities mentioned herein or (b) be engaged in anyother transaction involving such securities and earn brokerage or other compensation in the financial instruments/products/commodities discussed herein or act as advisoror lender / borrower in respect of such securities/financial instruments/products/commodities or have other potential conflict of interest with respect to anyrecommendation and related information and opinions. The said persons may have acted upon and/or in a manner contradictory with the information contained here. Nopart of this material may be duplicated in whole or in part in any form and or redistributed without the prior written consent of Kotak Mahindra Bank. This material is strictlyconfidential to the recipient and should not be reproduced or disseminated to anyone else

This material is not a research report as per the SEBI (Research Analyst) Regulations, 2014.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.