A Multi-cap sector agnostic Portfolio seeking to balance consistency and growth through mispriced opportunities in Indian Equity Markets

QUEST INVESTMENT ADVISORS PMS PORTFOLIO

Extending the frontier of wealth creation through the science of investing!

QUESTCONTENTS

1

About Quest

Investment Strategy

Investment philosophy & Investment process

Investment Team

Past performance track record

Key Terms & Fees

Quest Foundation

QUEST

ABOUT QUEST INVEST

2

QUESTWHO WE ARE

3

• Over 30 years old legacy in the investment advisory space with the first

foundation being laid in late 1980s by Mr. Ajay Sheth

• Quest began its journey as a provider of high quality bespoke equity research in

the midcap and smallcap space for FIIs, Mutual Funds and other Institutional

investors

• Commenced Portfolio Management Services in 2007 managing money for HNI,

family offices and corporates. Currently manage money for over 1400 such

clients

• Have built our team and grown our resources over the years to be managing over

USD 300 mn currently across PMS strategies

QUEST

4

WHAT WE STAND FOR – OUR VALUES

IntegrityInvestment management is one place where the importance of integrity

cannot be over emphasized. We swear by

it and also invest in companies which stand out on their integrity of

doing business

PatienceA good investment

doesn’t yield returns overnight. It is difficult to

not get distracted by every upswing and

downswing that market throws at you. Some laws, however, simply stand the

test of time.

TrustAt the very heart of Quest lies trust. We value and understand the role this plays in our relationships

with our partners, investors and society at large. Trust has a deep

role to play in investment management universe

GratitudeWe respect the fact that

the market we are working in, is much bigger

than us and we try to learn from it everyday. We value relationship

with each stakeholder and partners and strive to be

worthy of it

QUEST

STRATEGY FOR PORTFOLIO

CONSTRUCTION

5

QUESTINVESTMENT STRATEGY

6

Be sector and market-cap agnostic & look for

outsized earnings growth potential

Be active in managing cash levels in portfolio

taking advantage of sharp swings in market

Be agile to move across sectors, earnings cycle

and business cycles

Don’t overpay for businesses; keep an eye on

valuation

Look for strong balance sheets and steady cash

generating businesses

Look for P/E re-rating opportunities

Have a mix of Top-down and Bottom-up approach

in selecting the portfolio companies

QUESTSECTOR ROTATION - KEY TO ALPHA CREATION

7

• Being in the right sector at right time is key to generating alpha.

• Strategy is to take concentrated bets in 3-4 sectors at the beginning of the earnings upcycle and go underweight/avoid on the

sectors which are going to see earnings down-cycle

CY Performance 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Autos 103.8% 34.0% 150.6% 11.4% 46.8% 30.4% -0.5% -57.6% 195.0% 35.1% -20.3% 42.0% 6.4% 51.8% -1.0% 8.4% 29.5% -21.5% -15.0%

Bankex 34.3% 109.4% 29.8% 35.4% 38.1% 60.4% -54.0% 79.6% 32.4% -32.0% 56.3% -10.7% 64.9% -10.0% 6.7% 40.7% 6.1% 16.6%

Basic Materials 51.2% 69.7% -70.4% 156.4% 7.5% -39.7% 26.9% -11.7% 27.8% -14.4% 30.9% 52.5% -18.8% -7.6%

Cons Durables 68.2% 19.0% 92.4% 5.7% 109.0% 8.4% 92.8% -72.3% 93.5% 65.0% -18.1% 44.1% -25.3% 64.7% 23.8% -6.7% 98.7% -9.0% 20.2%

Capital Goods 79.0% 47.4% 166.2% 27.2% 92.7% 56.3% 114.8% -64.9% 95.0% 8.4% -47.9% 34.1% -6.6% 50.4% -8.9% -4.3% 38.9% -2.0% -11.1%

Consumer Disc. 36.2% 36.7% -67.4% 100.7% 11.1% -23.2% 41.8% -4.1% 52.9% 7.7% 4.5% 52.3% -15.5% -4.5%

Energy 42.9% 116.1% -56.1% 71.0% 1.3% -30.8% 14.5% 1.5% 12.9% 1.1% 15.3% 39.4% 0.8% 24.9%

Financial services 34.6% 74.9% -57.6% 83.1% 31.1% -31.1% 51.7% -11.3% 59.1% -6.3% 6.5% 44.3% 2.6% 13.2%

FMCG 90.7% -11.1% 35.4% -6.9% 54.8% 18.2% 19.5% -17.1% 40.1% 30.5% 9.3% 48.6% 10.4% 18.1% 1.6% 3.2% 31.5% 10.9% -2.5%

Industrials 49.1% 89.7% -69.0% 113.4% 10.4% -44.9% 36.0% -4.9% 54.4% -6.6% -0.5% 35.9% -19.0% -10.7%

IT & IT Services 61.7% 5.4% 22.3% 24.7% 41.0% 41.7% -15.6% -49.9% 124.2% 30.7% -15.6% -2.4% 59.7% 17.3% 4.4% -7.7% 11.2% 25.6% 6.2%

Metals 82.9% 62.7% 209.7% 12.5% 3.2% 38.3% 119.5% -74.1% 214.7% -0.7% -48.3% 18.4% -11.9% 7.7% -31.9% 35.8% 45.0% -20.3% -19.2%

Oil & Gas 84.9% 69.9% 125.6% -2.2% 37.2% 38.8% 113.2% -54.8% 70.0% 1.5% -29.0% 11.7% 3.5% 12.4% -3.5% 26.6% 33.3% -15.2% 7.1%

Power 45.8% 40.6% 120.2% -60.7% 69.3% -6.8% -40.2% 11.3% -15.4% 22.9% -6.4% 0.6% 19.3% -16.7% -6.6%

PSU 95.8% 72.7% 142.2% 11.6% 19.7% 11.5% 72.4% -51.0% 74.9% -1.7% -33.1% 15.0% -20.2% 38.8% -17.6% 12.0% 19.2% -21.0% -7.4%

Realty 464.2% 69.7% -83.1% 59.2% -26.2% -52.1% 54.0% -33.9% 5.4% -13.7% -7.8% 97.8% -31.3% 16.9%

Telecom 58.2% 79.6% -48.1% -9.1% 2.2% -16.4% -4.1% 16.8% 6.3% -0.1% -21.6% 47.6% -40.6% 10.3%

Utilities 20.0% 150.3% -57.7% 67.0% -6.4% -34.7% 10.4% -14.2% 19.9% -3.8% 9.4% 29.4% -15.5% -10.5%

Sensex 82.5% 4.0% 72.2% 11.6% 40.7% 46.8% 45.5% -52.9% 76.4% 16.8% -24.8% 25.2% 8.1% 30.1% -5.1% 1.8% 28.1% 6.7% 11.7%

QUESTFINE BLEND OF GROWTH AND VALUE

8

Be flexible in capturing market opportunity across sectors and market-caps which broadly fall

in these three segments

Value StocksCompanies which have seen recent bad times and are available at deep value

- Low teens EPS growth

- Low teens ROE / ROCE

P/E Re-rating companiesCompanies which are either in large expansion mode or at cusp of an industry disruption mode (Y2K moment) and are to see significant earnings growth- EPS growth entering high teens- ROE getting into high teens or more

Consistent EarningsCompanies which are cycle resistant and continue to deliver in all markets- High EPS growth- High ROE / ROCE profile

Sectors

like

Capital

goods,

Autos

Cement,

Telecom

Sectors like

Specialty

chemicals,

Pharma API

players,

Select

Consumer

disc.

Sectors like

Private

Banks,

NBFCs,

Consumer

Disc.

Allocation:

15 – 25%

Allocation:

25 – 35%

Allocation:

40 – 50%

*Please note all the above allocations are tentative and could change with market conditions and opportunities

QUEST

INVESTMENT PHILOSOPHY AND

INVESTMENT PROCESS

9

QUESTWHAT WE SEE BEFORE INVESTING IN A BUSINESS

10

Outsized returns are earned over time by investing in great businesses with strong drivers

Businesses we

would want to

own

Well managed and

scalable

businesses, with

superior returns on

capital

Leadership position in its sector – scope for margin

expansion

Large addressable market size with few players

Unorganized to organized market share gains

Businesses which are in Y2K moment of growth & disruption

• Companies who have strong pricing power owing to

their leadership position. Also companies which can

expand their margins and also improve ROE

• Focus on companies with large growth potential

where the market size is huge and has few players

• Post GST and with rising tax compliance the price

differential has reduced between organised and

unorganised products across sectors. People have

become more brand aware

Attributes we look for

Strong cash flow generation capability

Comfortable manageable leverage on books

• Changes in global trade dynamics has opened

opportunities for Indian manufacturing in various

sectors. Companies at forefront of this Y2K moment

• Companies with strong consistent cash flows which

helps them to expand during growth phases and wade

though difficult macro economic times with ease

• Companies with low / comfortable level of debt on

books

QUESTWHAT WE WOULD AVOID IN PORTFOLIO

11

Companies which are faced with Substitution or

Obsolescence risk

Companies with Weak returns on

incremental capital

Companies with Poor Corporate Governance

history

Past cases of siphoning of cash

Manipulation of stock prices

Unethical business practices

Misaligned interests

Excessive competition in capital-intensive industry

Misallocation of capital

Empire building tendency of promoters

Existential threat from technological developments

Companies which fail to show dynamism in meeting external business challenges

QUESTHOW WE FILTER WHAT GOES IN PORTFOLIO

12

Investment Universe

(Filter out the noise and make a bucket list of 80-100 companies)

Focus List

(Zero down on 40-50 companies)

Portfolio

(20-25 names)

• Screen out poor governance companies from the market

• Avoid companies with weak financials

• Look for companies which meet our philosophy and investment parameters

• Conduct management meetings and plant visits

• Do competitive analysis with peers both local and global

• Do in depth SWOT analysis

• Financial modelling and sensitivity analysis

• Do liquidity test, risk metrics analysis

• Portfolio construction of the highest conviction 20-25 names

• Continuous monitoring of events, earnings and news flow in all portfolio companies

• Maintain Sell discipline as and when meets our target objectives

QUESTFEW QUOTES WHICH DESCRIBE OUR PHILOSOPHY

13

❑ Herd-like stock selection can only lead to herd-like performance. To get to the top of the performance distributionyou have to escape the crowd – Howard Marks

❑ Our portfolios are set up to outperform in bad times, and that's when we think our performance is essential. Clearly,if we can keep up in good times and outperform in bad times, we will have above average results over full cycles andbelow average volatility, and our clients will enjoy outperformance when others are suffering. – Howard Marks

❑ In stocks as in romance, ease of divorce is not a sound basis for commitment. If you have chosen wisely to begin with,you won’t want a divorce – Peter Lynch

❑ A concentrated portfolio of strong and predictable companies acquired at a price that makes sense will do the job. -Charles T. Munger

❑ You learn quickly in this business that you are not going to look smart all the time, which invariably brings criticism.We always remind ourselves of a quote “I had rather lose clients then lose clients’ money” – David Samara

❑ Successful investing is about managing risk, not avoiding it – Benjamin Graham

❑ The important quality for an investor is temperament, not intellect – Warren Buffet

QUEST

INVESTMENT TEAM AND

PERFORMANCE TRACK RECORD

14

QUESTEXPERIENCED TEAM

15

Foundin

g

mem

bers

Port

folio

Manager

Oth

er

Invest

ment

Team

mem

bers

Ajay

Sheth

• Founder Director and has been with Quest since 1987

• B.Com and ICWA with over 40 yrs of experience including 29 yrs of Equity research & Fund Management

• Worked with Richardson Hndustan (now P&G) and Roche Products for 10 yrs

Bharat

Sheth• Co-founder and Head of Equities

• B.Com and LLB having 40 yrs of experience including 23 yrs of Equity research & Fund management

Aniruddha

Sarkar

• Co-Head of Equities and Senior Portfolio Manager

• B.Com (H) from St. Xavier’s Kolkata and MBA Finance from IMI, New Delhi

• Has over 13 yrs experience in portfolio management and equity research

• Prior to Quest, was working with IIFL AMC and has consistent track record of generating high teens CAGR

Hiten

Sampat

• Chief Compliance Officer

• Chartered Accountant from ICAI

• Has over 20 yrs experience in the investment management and portfolio management

• Responsible for Risk Management and all compliance matters in portfolios at Quest

Jigar

Shah

• Co-Head of Equities & Strategy

• B.Com and PGDBA having 16 yrs of experience in equity investments, marketing and fund management

• Prior to Quest, was associated with Motilal Oswal Financial services for over a decade

QUESTPAST PERFORMANCE OF PORTFOLIO MANAGER

16

Prior to joining Quest, Aniruddha Sarkar was the Portfolio Manager for IIFL Multicap PMS for a period of 5 years from

inception in Dec’14 to Dec’19. Below is his performance comparison to other Multi-cap PMS schemes:

Note: Following PMS schemes are included in the Peer average calculation and ranking: Aditya Birla Core Equity PMS, Alchemy Select

Stock, Alchemy High Growth, ASK IEP, ASK India Select, Axis Brand Equity PMS, Sundaram PACE, Sundaram SISOP, ICICI Pru Flexi Cap, ICICI

Pru Value Portfolio, Invesco RISE, Invesco DAWN, Kotak Special Situations Series 1, Motilal IOP, Motilal Value, Motial NTDOP

As on 31st Dec 2019 PMS Performance Comparison Snapshot

3M 6M 1 year 2 Years 3 Years 5 Years

Return Rank Return Rank Return Rank Return Rank Return Rank Return Rank

Average performance of comparable Peer PMS Schemes 5.09% 3.80% 8.67% -0.86% 9.64% 10.00%

IIFL Multicap PMS 7.3% 5 9.4% 3 27.2% 1 13.0% 1 18.3% 1 19.1% 1

Relevant Index Performance

NIFTY – 50 Largecap 6.0% 3.2% 12.0% 7.5% 14.1% 8.0%

NIFTY MIDCAP – 100 Midcap 6.7% -3.1% -4.3% -10.0% 6.0% 6.3%

BSE 500 Multicap 5.8% 2.5% 7.8% 2.2% 12.4% 7.9%

The PMS managed by Aniruddha has received the following Industry Accolades for out-performance

QUESTQUEST FLAGSHIP PMS

17

• The Above returns are of a Model Client as on 30th June, 2020. • Returns shown above are post all billed fees & expenses. • Returns of individual clients may differ depending on time of entry in the Strategy. • Past performance may or may not be sustained in future and should not be used as a basis for comparison with other investments.

CY20 CY19 CY18 CY17 CY16 CY15 CY14

Quest Flagship PMS -6.0% -0.7% -15.7% 47.5% 8.1% 12.4% 77.0%

Nifty Smallcap -20.9% -9.5% -29.1% 57.3% 2.3% 7.2% 55.0%

Nifty Midcap -14.0% -4.3% -15.4% 47.3% 7.1% 6.5% 55.9%

Nifty 50 -15.3% 12.0% 3.2% 28.6% 3.0% -4.1% 31.4%

Company Weigthage

ICICI Bank 6.50%

Divis Labs 5.21%

Coromandel International 5.11%

Bajaj Finance 5.07%

Bharti Airtel 4.95%

Biocon 4.60%

HDFC Bank 4.54%

Reliance Industries 4.50%

Ramco Cement 4.46%Sunpharma 3.83%

Cash 12.96%

Top 10 HoldingsCalendar year returns since inception

Largecap Midcap Smallcap Cash

Quest Flagship PMS 54.0% 19.6% 13.5% 12.9%

333.5

196.5 193.3207.8

190.3176.9

132.5

100

150

200

250

300

350

QUEST

PMS

Sensex Nifty

50

BSE Midcap Nifty

Midcap 50

BSE

Small Cap

Nifty

Small 100

Growth of Rs. 100 Lakhs Invested in Quest FLAGSHIP PMS v/s various indices (since inception)

Financials, 27.19%

Pharma & Healthcare,

19.50%

Chemicals, 8.85%

Telecom, 9.45%

Cement, 5.42%

Utilities, 3.65%

Autos, 7.70%

Consumer Disc, 2.41%

IT & IT Services,

2.87%

Cash, 12.96%

Sector Allocation

QUESTQUEST MULTI PMS

18

• The Above returns are of a Model Client as on 30th June, 2020. • Returns shown above are post all billed fees & expenses. • Returns of individual clients may differ depending on time of entry in the Strategy. • Past performance may or may not be sustained in future and should not be used as a basis for comparison with other investments.

Top 10 HoldingsCalendar year returns since inceptionCompany Weightage

Divis Lab 5.78%

HDFC Bank 5.58%

Coromandel International 4.91%

Ramco Cement 4.51%

Bajaj Finance 4.43%

Kalpataru Power 3.76%

Biocon 3.75%

Sunpharma 3.70%

Atul Ltd 3.56%

ICICI Securities 3.53%

Cash 7.37%

CY20 CY19 CY18 CY17 CY16 CY15 CY14

Quest Multi PMS -10.5% 0.0% -22.5% 53.2% 8.3% 14.5% 20.4%

Nifty Smallcap -20.9% -9.5% -29.1% 57.3% 2.3% 7.2% 55.0%

Nifty Midcap -14.0% -4.3% -15.4% 47.3% 7.1% 6.5% 55.9%

Nifty 50 -15.3% 12.0% 3.2% 28.6% 3.0% -4.1% 31.4%

Largecap Midcap Smallcap Cash

Quest Multi PMS 41.0% 30.1% 21.5% 7.4%

159.3

134.9 132.7

141.1

127.5122.5

90.4

75

100

125

150

175

QUEST

PMS

Sensex Nifty

50

BSE

Midcap

Nifty

Midcap 50

BSE

Small Cap

Nifty

Small 100

Growth of Rs. 100 Lacs Invested in Quest MULTI PMS v/s various indices (since inception)

Pharma & Healthcare,

18.22%

Financials, 25.23%

Chemicals, 13.93%

Cement, 4.51%

Utilities, 3.76%

Real Estate, 3.47%

Autos, 5.77%

Telecom, 5.45%

IT & IT Services, 5.40%

Consumer Disc, 5.78%

Metals, 1.11%Cash, 7.37%

Sector Allocation

QUESTSOME WEALTH CREATION IDEAS IDENTIFIED EARLY

19

QUEST

QUEST FOUNDATION

OUR RESPONSIBILITY TO THE SOCIETY

20

QUESTEYEING A BETTER TOMORROW FOR ALL

21

A good investment benefits you….but a great investment does a lot more

o Quest Founders have publicly pledged to use all their profits for charitable and spiritual activities;

contributed ~Rs. 60 crores over last 5 years

o Quest Foundation has been actively working with various hospitals in Mumbai for Covid-19

related assistance and has ear-marked Rs 20 crores towards the same.

o Quest Foundation presently operates Iyengar Yoga classes from a 4,000 sq. ft. premises in Sion

o Quest Foundation also runs Nutun Gyan Dhara, a free public library with over 5,000 titles on

various subjects like spirituality, healthcare, etc.

o Currently Quest Foundation is actively associated with

• KEM, Sion Hospital, Nair hospital, JJ Hospital, Cooper Hospital and SR Mehta & Kikabhai

Hospital – Mumbai (Medical)

• SNDT College – Wadala – Mumbai (Education)

• Shri Ram Hospital – Gondal – Gujarat (Rural Healthcare)

Talk about investment with a soul

QUESTDISCLAIMER

22

o Investors are NOT BEING offered any guaranteed / assured returns.

o Investments in equities are subject to market and other risks.

o Value of investments may go up or down due to various factors and forces affecting the capital market.

o Our past performance does not indicate the future performance of the portfolio manager and/or the portfolio management scheme.

o Investors are urged to apply appropriate caution while making investment in the Quest PMS.

o There is no capital guarantee in the Quest PMS product.

The purpose of this presentation is to provide general information of a product structure to prospective investors in a manner to assist them in

understanding the product. The Presentation is purely for information purposes and should not be construed to be investment recommendation/advice

or an offer or solicitation of an offer to buy/sell any securities. This Presentation is for the personal information of the authorized recipient(s) and is not

for public distribution and should not be reproduced or redistributed to any other person or in any form without prior permission of Quest Investment

Advisors Pvt Ltd. While reasonable endeavors have been made to present reliable data in the Presentation, but Quest PMS does not guarantee the

accuracy or completeness of the data in the Presentation. Quest Investment Advisors Pvt Ltd or any of its connected persons including its subsidiaries or

associates or partners or employees shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error

in the information contained, views and opinions expressed in this Presentation. Past performance should not be taken as an indication or guarantee of

future performance, and no representation or warranty, express or implied, is made regarding future performance. Information, opinions and estimates

contained in this Presentation reflect a judgment of its original date of publication by Quest Investment Advisors Pvt Ltd and are subject to change

without notice. This Presentation is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of or located in

any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to local law, regulation or

which would subject Quest Investment Advisors Pvt Ltd and its affiliates to any registration or licensing requirement within such jurisdiction. The

product described herein may or may not be eligible for sale in all jurisdictions or to certain category of investors. Persons in whose possession this

Report/Presentation may come are required to inform themselves of and to observe such restrictions.

This presentation is qualified in its entirety by the Terms of Agreement and other related documents, copies of which will be provided to prospective

investors. All investors must read the detailed Terms of Agreement including the Risk Factors and consult their tax advisors, before making any

investment decision/contribution to be managed under the Portfolio Management Services offered by Quest Investment Advisory Pvt Ltd.

QUEST

THANK YOU