India Equity Analyst - Fundamental & Thematic, Beat the Street

Sudarshan Bhandari

India Equity Analyst - Fundamental & Thematic

Beat the Street

Beat The Street was founded by Nimish Maheshwari and Sudarshan Bhandari, both of whom are Chartered Accountants by Profession, known for their expert analysis in the fields of Business, Sectoral analysis, and Corporate governance.

With a strong social media presence of 45,000+ Subscribers across various platforms, they are considered trusted voices in the industry. Their insights and analysis have been featured in some of India’s most prominent publications, including the Economic Times, Dalal Street Investment Journal, The Morning Context, and The Ken.

Their analysis on Bankrupt & Insolvent companies has been instrumental in saving investors from significant losses. They have a keen eye for identifying red flags and has identified exclusive redflags earlier in Vedanta, Nykaa, Dhani Services, Adani and many more.

Read Business Not Stock Prices

Thematic (Sector/Industry)

<ul>
<li>Big Tech companies are already generating significant revenue from AI. Microsoft expects to reach $10 billion in AI revenue by the next quarter, making it their fastest-growing area.</li>
<li>In the third quarter of 2024 alone <strong>Microsoft, Google, and Meta</strong> collectively spent over $42 billion on AI infrastructure, primarily on building data centers and purchasing computing equipment.</li>
<li>Companies are projecting continued high spending on AI into 2025 to meet growing demand. However, challenges remain, including supply constraints for AI chips</li>
</ul>


Big Tech companies are already generating significant revenue from AI. Microsoft expects to reach $10 billion in AI revenue by the next quarter, making it their fastest-growing area.
In the third quarter of 2024 alone Microsoft, Google, and Meta collectively spent over $42 billion on AI infrastructure, primarily on building data centers and purchasing computing equipment.
Companies are projecting continued high spending on AI into 2025 to meet growing demand. However, challenges remain, including supply constraints for AI chips


Thematic Report: AI Wave- Big Tech's Spending Spree

Market & Forensics Analyst, Beat the Street

Nimish Maheshwari

Market & Forensics Analyst

<ul>
<li>India is experiencing a slowdown in capital expenditure (capex), both in the government and private sectors. This slowdown, largely attributed to the general elections in the Q1 of FY25.</li>
<li>The central government has set an ambitious target of 50.5% capex growth in the second half of FY25 to compensate for the sluggish first half.</li>
<li>The capex slowdown has resulted in reduced investment in crucial infrastructure projects, impacting key sectors such as defense, roads, and railways.</li>
</ul>


India is experiencing a slowdown in capital expenditure (capex), both in the government and private sectors. This slowdown, largely attributed to the general elections in the Q1 of FY25.
The central government has set an ambitious target of 50.5% capex growth in the second half of FY25 to compensate for the sluggish first half.
The capex slowdown has resulted in reduced investment in crucial infrastructure projects, impacting key sectors such as defense, roads, and railways.


Thematic Report: India's Capex Growth Ambitions Vs. Reality

New Zealand Professional Investment Services Firm, Forsyth Barr

Forsyth Barr

New Zealand Professional Investment Services Firm

We are proud to be a New Zealand owned firm, with 21 offices throughout the country and over 300 employees. We assist personal, institutional and corporate clients providing a full range of investment services.

Forsyth Barr is a foundation New Zealand Exchange firm (NZX) and accredited market participant. We have been confirmed by the Financial Markets Authority as a Qualifying Financial Entity (QFE).

Research is the cornerstone of our advice. We have one of New Zealand's leading teams of analysts. Our global affiliations ensure comprehensive research coverage of all major investment markets.

Equity Bottom-Up

AFT Pharmaceuticals Limited develops, licenses, and sells pharmaceutical products. The Company offers medicines for allergy, cough, cold, and flu, eye care, pain management, and laxatives. AFT Pharmaceuticals serves customers worldwide.

<ul><li>Following a weak update three weeks ago, AFT Pharmaceuticals' (AFT) 1H25 result had few surprises and we have again materially downgraded our forecasts.</li><li>This hurts. That said, we don't view any of the recent issues as structural, and we think the growth story remains well intact.</li><li>AFT has set a FY27 revenue target of NZ$300m (~+17% CAGR from FY24), which we view as achievable in light of its track record. ​​​​​​​Placing AFT's defensive and strong performing ANZ business on ~11x EV/EBIT (~-30% discount to the NZ market median), implies investors are paying nothing for International and SE Asia, despite FY25E revenue of ~NZ$30m, and significant optionality through multiple growth drivers. OUTPERFORM.</li></ul>

Following a weak update three weeks ago, AFT Pharmaceuticals' (AFT) 1H25 result had few surprises and we have again materially downgraded our forecasts.This hurts. That said, we don't view any of the recent issues as structural, and we think the growth story remains well intact.AFT has set a FY27 revenue target of NZ$300m (~+17% CAGR from FY24), which we view as achievable in light of its track record. ​​​​​​​Placing AFT's defensive and strong performing ANZ business on ~11x EV/EBIT (~-30% discount to the NZ market median), implies investors are paying nothing for International and SE Asia, despite FY25E revenue of ~NZ$30m, and significant optionality through multiple growth drivers. OUTPERFORM.

AFT Pharmaceuticals - 1H25 Result; No Pain, No Gain

ikeGPS Group Limited develops and produces location-based measurement devices and accessories to integrate digital camera and laser range finder technologies. The Company offers devices and accessories to capture a GPS location and photo of remote targets, and measures the distance and heights of objects.

<ul><li>ikeGPS (IKE) delivered a solid 1H25 result in revenue terms, which was pre-released in October.</li><li>Group revenue growth of +16% was underpinned by robust growth in Subscriptions, as total enterprise customers rose +21 over the period to 436. </li><li>Gross margin improved from 59% in 1H24 to 67% in 1H25, reflecting: (1) the mix-shift towards higher-margin Subscription products, and (2) productivity gains from IKE Analyze's support centre in Mexico. </li></ul>

ikeGPS (IKE) delivered a solid 1H25 result in revenue terms, which was pre-released in October.Group revenue growth of +16% was underpinned by robust growth in Subscriptions, as total enterprise customers rose +21 over the period to 436. Gross margin improved from 59% in 1H24 to 67% in 1H25, reflecting: (1) the mix-shift towards higher-margin Subscription products, and (2) productivity gains from IKE Analyze's support centre in Mexico. 

Chief Executive Officer, Emmer Capital Partners Limited

Manishi Raychaudhuri

Chief Executive Officer

Emmer Capital Partners Limited

Emmer Capital Partners is an Asia Pacific focused financial advisory firm engaging in strategic financial asset allocation advice, bespoke thematic research and advising early-stage companies and connecting them to investors. Emmer Capital provides macro-economic and multi-asset investment strategy inputs to institutions, family offices, private wealth managers, private equity, and corporate boards directly and through independent research platforms. Emmer Capital also advises a wide range of startup companies on fund raising and business strategy. Emmer Capital's active engagement with the print and electronic media reaches a broad spectrum of investors across the globe.

Cross Asset Strategy

<ul>
<li>A key medium-term driver of share price is earnings estimate trajectory - in particular, "earnings inflections" - i.e. the trajectory of earnings estimates changing directions. </li>
<li>Different Asian markets have had different estimate trajectories. But most suffered estimate cuts since August/September 2024, coinciding with the US Dollar appreciation and the spike in US yields.</li>
<li>We argue that investors need to watch out for Taiwan, Indonesia, Malaysia and India for earnings estimate increases. India's could decline in the near term and commence an uptrend later. </li>
</ul>


A key medium-term driver of share price is earnings estimate trajectory - in particular, "earnings inflections" - i.e. the trajectory of earnings estimates changing directions. 
Different Asian markets have had different estimate trajectories. But most suffered estimate cuts since August/September 2024, coinciding with the US Dollar appreciation and the spike in US yields.
We argue that investors need to watch out for Taiwan, Indonesia, Malaysia and India for earnings estimate increases. India's could decline in the near term and commence an uptrend later. 


Asian Equities: In Search of Earnings Estimate Uptrends