September, 2023
An overweight stance in financials also detracted from performance, while stock picking in industrials added relative value. The position in India’s leading online travel agency MakeMyTrip, which is 53% owned by Ctrip, advanced. It stands to benefit from an increase in penetration of airlines and hotels services, improving air connectivity and rising income levels, which provides a long runway for growth. The exposure to Mphasis added value as it focuses on new vertical expansion beyond the banking and financial services segment. Furthermore, it is seeing large deal wins as global companies continue to outsource non-core activities. KEC International’s business outlook remains positive, on the back of better domestic transmission and civil business. It has seen a 30% higher order intake in the current financial year. HDFC Bank was the biggest detractor from returns during the quarter as it faces increased liquidity costs related to its merger with Housing Development Finance Corporation. Moreover, the Reserve Bank of India imposed an incremental cash reserve ratio (CRR) requirement that is likely to weigh on its net interest margin. Nevertheless, the long-term investment rationale for the bank remains intact, with strong asset-quality and a well-capitalised balance sheet. The position in Eicher Motors slid as its year-on-year growth looks muted and its export volumes are weaker than its peers due to a subdued riding season in developed countries and foreign exchange related issues in emerging countries.
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/FundFactSheet_fidelity-india-fund_Quarterly_Net_Sep23.pdfJune, 2023
The holding in Shriram Finance proved rewarding as it maintains a strong capital position, adequate liquidity and improving asset quality levels. It also remains on track to achieve double-digit growth in its assets under management and earnings, with an everincreasing demand for commercial vehicles in India. Shares in Astral advanced as it posted a strong set of earnings for the March quarter, buoyed by low-cost inventories. Moreover, the outlook remains healthy with robust growth across segments, aided by new product launches and geographical expansion. The holding in Tata Motors supported performance on the back of improved global electronic vehicle (EV) business. The company exhibits an adaptive product development strategy that is in sync with market readiness. It has a competitive advantage compared to its peers as it has developed custom made products for India, balancing accessibility and features. Many information technology (IT) services companies struggled amid heightened recession fears across the globe. Consequently, an overweight allocation to Infosys held back gains. The position in HDFC Bank detracted as its merger with HDFC would cause the net interest margin and return on equity to drop this year. The exposure to SRF weighed on returns as its technical textiles and packaging film segments have not been performing well in light of weaker demand and higher input costs.
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/FundFactSheet_fidelity-india-fund_Quarterly_Net_Jun23.pdfMarch, 2023
The Fund returned -2.1% over the quarter, while the index returned -5.2%. Shares in several Adani Group companies experienced massive losses following the release of a research report that highlighted concerns over the group’s debt levels. Therefore, not holding Adani Total Gas, Adani Enterprises, Adani Transmissions and Adani Green Energy contributed to relative performance. The holding in HCL Technologies added value. The company posted higher-than-expected profits for the December quarter, aided by their strong order pipeline. Its shares are also supported by its long-term sustainable growth, better sales growth and higher risk-reward The conviction position in HDFC Bank enhanced gains as it reported a jump in net profits, buoyed by higher top-line and strong loan growth. The lack of exposure to ITC weighed on returns. It posted healthy profit estimates for the December quarter, helped by steady demand for its packaged food. The lack of exposure to Tata Consultancy Services pared gains. The company exhibits quality characteristics including better growth rates, margins and execution skills, which puts it ahead of its peers. Not holding Larsen & Toubro held back gains. Its biggest segment, infrastructure projects, reported a strong pick up in order inflow. The stock was sold from a sustainability point of view due to concerns around its defence business.
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/FundFactSheet_fidelity-india-fund_Quarterly_Net_Mar23.pdfJanuary, 2023
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/FundFactSheet_fidelity-india-fund_Monthly_Net_Jan23.pdfDecember, 2022
Holdings in IT services detracted from performance
An anticipated slowdown in IT spending, given rising inflation and a likely slowdown in global growth, put pressure on IT stocks. As a result, positions in Infosys and HCL Technologies held back gains, while the conservative exposure to TCS and the overall underweight in the sector added relative value. Infosys is expected to strengthen its sales team, with a special focus on large deals and investing in digital capabilities, which has resulted in market share gains and industry-leading growth over the last three years. HCL Technologies has created strong capabilities in cloud infrastructure services and benefits from the acceleration in the shift to cloud and cyber security requirements in remote workplaces.
Positions in NBFCs and insurance companies held back gains
The holding in Shriram Transport Finance, the largest used commercial vehicle financier in India slid. Investors took profits in the stock ahead of its merger with Shriram City Union Finance and Shriram Capital. The consolidation is set to create the largest retail non-bank financial company (NBFC) in the country. In the insurance space, positions in ICICI Lombard General Insurance weighed on performance.
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/FundFactSheet_fidelity-india-fund_Quarterly_Net_Dec22.pdfSeptember, 2022
Holdings in IT services detracted from performance
An anticipated slowdown in IT spending, given rising inflation and a likely slowdown in global growth, put pressure on IT stocks. As a result, positions in Infosys and HCL Technologies held back gains, while the conservative exposure to TCS and the overall underweight in the sector added relative value. Infosys is expected to strengthen its sales team, with a special focus on large deals and investing in digital capabilities, which has resulted in market share gains and industry-leading growth over the last three years. HCL Technologies has created strong capabilities in cloud infrastructure services and benefits from the acceleration in the shift to cloud and cyber security requirements in remote workplaces.
Positions in NBFCs and insurance companies held back gains
The holding in Shriram Transport Finance, the largest used commercial vehicle financier in India slid. Investors took profits in the stock ahead of its merger with Shriram City Union Finance and Shriram Capital. The consolidation is set to create the largest retail non-bank financial company (NBFC) in the country. In the insurance space, positions in ICICI Lombard General Insurance weighed on performance.
Stock picking in consumer discretionary added value
The allocation to premium two-wheeler manufacturer Eicher Motors proved rewarding with better-than-expected results due to its product mix and price hikes. The company also fared well on the export front, with an encouraging response from Brazil and Australia. Eicher Motors is trying to make the brand more accessible, with new product launches at competitive prices to attract young customers. The position in Sapphire Foods, one of the largest franchisees of Yum! Brands, which operates KFC/Pizza Hut stores in India, gained amid optimism around robust growth in its stores and a guidance upgrade.
June, 2022
The Fund returned -5.8% over the quarter, while the index returned -5.7%.
Selected financials added value
The holding in Shriram Transport Finance, the largest used commercial vehicle financier in India, advanced. In our view investor sentiment was buoyed by the RBI’s approval of the merger of Shriram City Union Finance and Shriram Capital Ltd with Shriram Transport Finance Company. The consolidation is set to create the largest retail non-bank financial company (NBFC) in the country. Holdings in private lenders HDFC Bank and ICICI Bank proved rewarding. We believe that shares in these banks gained momentum amid expectations of improved margins supported by interest rate hikes. The merger of Housing Development Finance Corporation (HDFC) with HDFC Bank may have further buoyed investor sentiment.
Underweight in IT services companies enhanced gains
Potential concerns over a slowdown in demand against the backdrop of muted economic growth weighed on IT services companies. The lack of exposure to Tech Mahindra and Wipro proved rewarding as these companies slid in line with global peers. Conversely, a slight overweight in Infosys held back gains.
Bias against utilities and selected automobile names detracted
Not holding selected utility companies, including NTPC, Adani Total Gas, Adani Enterprises and Adani Transmission held back gains. These companies fared well in a risk-off environment. The lack of exposure to tractor manufacturer Mahindra & Mahindra and automobile manufacturer Maruti Suzuki detracted from relative performance. Shares in these companies gained momentum towards the end of the period as commodity prices eased somewhat. Encouragingly, the exposure to premium two-wheeler manufacturer Eicher Motors proved rewarding amid steady demand in both domestic and international markets. The company has an encouraging response from Brazil and Australia on the export front. Moreover, its new launches, distribution network expansion in underpenetrated Indian states and international expansion are helping to offset the slowdown in more mature states.
March, 2021
Stock selection in utilities and financials proved rewarding In the utilities space, Gujarat Gas was supported by continued strength in its core area in Gujarat and continued expansion into new regions. It remains a key beneficiary of the government’s impetus to adopt greener fuel in India. Among financials, Shriram Transport Finance Company benefited from the post COVID-19 normalisation, driven by favourable government policies and easy liquidity. The position in Axis Bank, India’s third largest private sector lender, rebounded on increased confidence about the bank’s resilience during the pandemic. Construction proxy stocks added value India’s largest structural steel tubes and pipes player APL Apollo Tubes gained momentum amid an encouraging demand outlook, driven by the launch of new products with strong distribution and branding efforts. Ultratech Cement also advanced during the month. Increased government spending on infrastructure projects, low interest rates supporting housing demand and ongoing government programmes for low-cost housing is driving cement demand. Chlorinated polyvinyl chloride (CPVC) pipe player Astral PolyTechnik gained momentum after it reported better than expected earnings due to higher plastic pipe margins, and strong revenues and margins for its adhesive business.
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/FundFactSheet_fidelity-india-fund_Quarterly_Net_Mar21.pdfFebruary, 2021
Invests in a diversified selection of 30 to 50 Indian companies and draws on the research capabilities of Fidelity’s analysts based on the ground in India. Valuation plays a key role in stock selection. Portfolio holdings are continually assessed against new investment ideas.
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/FundFactSheet_fidelity-india-fund_Monthly_Net_Feb21.pdfDecember, 2020
Financials stocks were among key contributors
The sector gained momentum in a risk-on environment, supported by positive news flows around COVID-19 vaccines. Of note, the exposure to private sector lenders HDFC Bank and Axis Bank proved rewarding. Consumer finance companies Shriram Transport Finance Co and Bajaj Finance remained in favour amid optimism over a faster economic recovery from the pandemic. Conversely, the underweight positions in Housing Development Finance Corp and ICICI Bank weighed on relative returns. The manager reduced the allocation to Housing Development Finance Corp, which is the parent company of HDFC Bank and HDFC Life Insurance, in favour of its two subsidiary companies. Elsewhere, MakeMyTrip rose on prospects of an acceleration in recovery in the travel sector amid positive vaccine news. The company reported corporate earnings that were in line with expectations in October.
ticker: FID0015AU
commentary_block: Array
factsheet_url:
https://www.fidelity.com.au/funds/fidelity-india-fund/related-documents/fund-fact-sheet/
Fund factsheet -> “Fund Performance”
https://www.fidelity.com.au/funds/fidelity-india-fund/
release_schedule: Quarterly
fund_features:
Fidelity India Fund aims to achieve returns in excess of the MSCI India Index over the suggested minimum investment time period of five to seven years.
- Invests in a diversified portfolio of typically 30 to 50 Indian companies.
- Uses in-house, bottom-up company research.
- Fidelity seeks out stocks that it believes are undervalued and likely to generate growth.
- The Fund suits for investors looking for an Indian equities investment who have a tolerance for a very high amount of risk.
manager_contact_details: Array
asset_class: Foreign Equity
asset_category: Global Other
peer_benchmark: Foreign Equity - Other Index
broad_market_index: Developed -World Index
structure: Managed Fund