Download L50 delivering higher returns with good NAV growth over Nifty

Weekly Performance Update: 13 December, 2013
L50 delivering higher returns with good NAV growth over Nifty
Over last 3-4months L50 has delivered an excess return of as high as 5% over Nifty TRI and an absolute return of as
high as 18%. Nearly all the L50 baskets are outperforming Nifty Index. L50’s highest and the lowest returns are higher
than Nifty’s highest and lowest. This is in line with the strategy expectation.
Performance Till
13th Dec. 2013
Start Date
Days Since
Inception
Nifty
Nifty TRI
L50
Excess
Return
Nifty TRI
NAV
L50
NAV
L50 Basket 1
24-07-2013
143
1.5%
1.9%
6.7%
4.8%
101.9
106.7
L50 Basket 2
08-08-2013
128
11.8%
12.1%
16.4%
4.2%
112.1
116.4
L50 Basket 3
21-08-2013
115
14.2%
14.5%
17.6%
3.1%
114.5
117.6
L50 Basket 4
11-09-2013
94
4.6%
4.8%
8.1%
3.3%
104.8
108.1
L50 Basket 5
24-09-2013
81
4.7%
4.9%
6.6%
1.7%
104.9
106.6
L50 Basket 6
08-10-2013
67
4.4%
4.6%
4.9%
0.3%
104.6
104.9
L50 Basket 7
21-10-2013
54
-0.3%
-0.2%
1.3%
1.6%
99.8
101.3
L50 Basket 8
11-11-2013
33
0.5%
0.5%
2.5%
2.0%
100.5
102.5
L50 Basket 9
25-11-2013
19
2.9%
2.9%
2.4%
-0.5%
102.9
102.4
L50 Basket 1
Nifty TRI
L50 Basket 2
120.0
106.7
110.0
L50 Basket 3
101.9
90.0
80.0
L50 Basket 4
116.4
120.0
112.1
100.0
108.1
104.8
100.0
80.0
L50 Basket 6
Nifty TRI
110.0
106.6
104.9
90.0
80.0
L50 Basket 7
Nifty TRI
101.3
99.8
110.0
104.9
104.6
100.0
90.0
L50 Basket 8
108.0
106.0
104.0
102.0
100.0
98.0
96.0
94.0
92.0
Nifty TRI
120.0
100.0
90.0
114.5
100.0
80.0
120.0
110.0
110.0
90.0
L50 Basket 5
117.6
120.0
90.0
Nifty TRI
120.0
Nifty TRI
130.0
110.0
100.0
108.0
106.0
104.0
102.0
100.0
98.0
96.0
94.0
92.0
Nifty TRI
130.0
L50 Basket 9
Nifty TRI
102.5
100.5
108.0
106.0
104.0
102.0
100.0
98.0
96.0
ArthVeda Portfolio Management Services. Registration No. PM/ INP 000003567
Nifty TRI
102.9
102.4
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Weekly Performance Update: 13 December, 2013
L50 is a superior quality portfolio with cheaper valuation than Nifty Index
L50 basket is trading at nearly 30%-40% discount to Nifty Index while on all the quality, income and risk parameters L50
is superior to Nifty. L50 portfolio has higher cash on balance sheet with leverage characteristic and interest coverage
better than Nifty. In terms of dividend yield L50 is delivering an income of nearly ₹23lakhs per annum on a portfolio of
₹10 Cr against Nifty’s ₹15lakhs.
Parameter
Valuations
Fundamentals
Ratios
Current L50
Current Nifty
P/E
11.6
16.8
P/BV
2.0
2.5
EV/EBITDA
7.0
9.8
EV/EBIT
8.4
12.0
P/Sales
0.9
1.6
Div. Yield
2.3%
1.5%
ROE
17.2
14.9
ROCE
21.1
17.2
Sales to Asset
1.4
0.9
Gross Debt to Equity
0.5
0.6
Net Debt to Equity
0.3
0.4
Interest Coverage
8.7
7.6
L50 outperforms market irrespective of market valuation
Historically market valuation (Price to Book) has been in the range of 2.0x to 6.0x. Realized return over next 5 year
depends on valuations investor entered the market. L50 investors during bottom of market valuation (P/B 1.8x - 2.0x)
realized nearly 42.5% CAGR over next 5 year whereas Nifty investors realized only 40.9%. Further investors in L50
during peak of market valuation (P/B 5.6x -5.8x) realized nearly 7.9% CAGR over next 5 years whereas Nifty investors
realized only 0.4% CAGR.
Growth of ₹100
Nifty 50 TRI
Growth of ₹100
5Yr CAGR
p.a. Return
Invested in
AlphaL50
5Yr CAGR
p.a. Return
Invested in
Nifty50
1.8 to 2.0
42.50%
₹ 587.59
40.90%
₹ 555.33
2.4 to 2.6
31.50%
₹ 393.21
29.60%
₹ 365.62
3.0 to 3.2
23.80%
₹ 290.81
19.40%
₹ 242.67
5.6 to 5.8
7.90%
₹ 146.25
0.40%
₹ 102.02
Starting P/BV
Range of Nifty
Alpha L50
The current market valuation is in the range of 2.4x -2.6x book value. Based on historical performance markets could
deliver a CAGR of about 29.6% p.a. i.e. 3.66x initial capital. While during same periods Alpha L50 has delivered a CAGR
of about 31.5% p.a. i.e. 3.93x initial capital.
ArthVeda Portfolio Management Services. Registration No. PM/ INP 000003567
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