External broker reports(aggregated public sources), HDFC Securities

HDFC Securities

External broker reports(aggregated public sources)

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Equity Bottom-Up

<p>The base deficit rose marginally to 0.4% in Dec-21 while peak deficit fell to 0.1% vs 0.6% MoM, with the merchant rate at INR3.2/unit. As of Jan-22, discoms' outstanding dues have risen to INR1066 bn (+18%/+8% on YoY/MoM). We expect power demand to revive during Feb-Mar-22. NTPC, PGCIL, and CESC are our top picks. Generation growth remained subdued in Dec-21 at 2.5% YoY due to low temperatures at the onset of peak winter, which dampened power demand. In the MTD Jan-22 period as well, demand growth stood at 1.5% YoY, mainly due to a partial lockdown imposed across states due to rising COVID cases.</p><div class="content-highlight"><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></div>

The base deficit rose marginally to 0.4% in Dec-21 while peak deficit fell to 0.1% vs 0.6% MoM, with the merchant rate at INR3.2/unit. As of Jan-22, discoms' outstanding dues have risen to INR1066 bn (+18%/+8% on YoY/MoM). We expect power demand to revive during Feb-Mar-22. NTPC, PGCIL, and CESC are our top picks. Generation growth remained subdued in Dec-21 at 2.5% YoY due to low temperatures at the onset of peak winter, which dampened power demand. In the MTD Jan-22 period as well, demand growth stood at 1.5% YoY, mainly due to a partial lockdown imposed across states due to rising COVID cases.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Power Plus: Peak winter demand remains subdued

<p>While the Centre has dropped the DBT scheme from the proposed bill, other reforms like delicencing and smart metering can be the silver lining that will revive the sector. NTPC, PGCIL, and CESC are our top picks. Given the onset of winter and muted power demand, generation growth remained subdued in Nov-21 at 2.1% YoY. During MTD Dec-21 as well, demand growth has been low at 2% YoY. Lower power demand and improved coal supply led to a 1.5x increase in coal stocks across stations compared to the critical Oct-21 level.</p><div class="content-highlight"><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></div>

While the Centre has dropped the DBT scheme from the proposed bill, other reforms like delicencing and smart metering can be the silver lining that will revive the sector. NTPC, PGCIL, and CESC are our top picks. Given the onset of winter and muted power demand, generation growth remained subdued in Nov-21 at 2.1% YoY. During MTD Dec-21 as well, demand growth has been low at 2% YoY. Lower power demand and improved coal supply led to a 1.5x increase in coal stocks across stations compared to the critical Oct-21 level.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Power Plus: Low demand, better supply ups coal inventory 1.5x

<p>GAIL (India): Our BUY recommendation on GAIL with a price target of INR 210 is based on 9% CAGR expansion in gas transmission volume over FY22-24E to 136mmscmd on the back of (1) increase in domestic gas production, (2) increase in demand of RLNG, and (3) completion of major pipelines in eastern and southern India. Q2FY22 EBITDA/APAT were 34/47% above our estimates, owing to a 7% higher revenue, lower-than-expected raw material cost, higher-than-expected other income, and lower-than-expected tax outgo.</p>
<div class="content-highlight"><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></div>

GAIL (India): Our BUY recommendation on GAIL with a price target of INR 210 is based on 9% CAGR expansion in gas transmission volume over FY22-24E to 136mmscmd on the back of (1) increase in domestic gas production, (2) increase in demand of RLNG, and (3) completion of major pipelines in eastern and southern India. Q2FY22 EBITDA/APAT were 34/47% above our estimates, owing to a 7% higher revenue, lower-than-expected raw material cost, higher-than-expected other income, and lower-than-expected tax outgo.
Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

HSIE Results Daily: NTPC, DLF, InterGlobe Aviation, Tata Power, GAIL (India), JSW Energy, Bandhan...

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

<div><p>The <a href="https://www.smartkarma.com/entities/s-p-bse-sensex-index" target="_blank" data-smartkarma-citation="entities:31494:1" rel="noopener">S&amp;P BSE SENSEX Index (SENSEX INDEX)</a> is the flagship index of the Bombay Stock Exchange (BSE). The index has 30 stocks and is a free float weighted market cap index. The next rebalance will be effective after the close of trading on 17 December.</p></div><div>
<p>The December review uses the market cap and turnover data from 1 May to 31 October to determine the stocks to be included and excluded from the index, and the announcement of the changes is done 4 weeks before the rebalance effective date.</p>
<p>With 6 days to go in the review period, we see <a href="https://www.smartkarma.com/entities/wipro-ltd" target="_blank" data-smartkarma-citation="entities:15360:1" rel="noopener">Wipro Ltd (WPRO IN)</a> as a high probability index addition. <a href="https://www.smartkarma.com/entities/bajaj-auto-ltd" target="_blank" data-smartkarma-citation="entities:3613:1" rel="noopener">Bajaj Auto Ltd (BJAUT IN)</a> is the lowest ranked index constituent and is a likely deletion from the index.</p>
<p>There is a (slim) possibility of <a href="https://www.smartkarma.com/entities/nestle-india-ltd" target="_blank" data-smartkarma-citation="entities:13101:1" rel="noopener">Nestle India (NEST IN)</a> being deleted from the index if it fails the annualised traded value test. As it stands, it is touch and go for the stock.</p>
<p>Passive trackers will need to buy over 2 days of ADV on <a href="https://www.smartkarma.com/entities/wipro-ltd" target="_blank" data-smartkarma-citation="entities:15360:1" rel="noopener">Wipro Ltd (WPRO IN)</a> and sell over 3.5 days of ADV on <a href="https://www.smartkarma.com/entities/bajaj-auto-ltd" target="_blank" data-smartkarma-citation="entities:3613:1" rel="noopener">Bajaj Auto Ltd (BJAUT IN)</a>. If <a href="https://www.smartkarma.com/entities/nestle-india-ltd" target="_blank" data-smartkarma-citation="entities:13101:1" rel="noopener">Nestle India (NEST IN)</a> is deleted instead, passive trackers will need to sell 7 days of ADV on the stock.</p>
<p>In terms of delivery volumes, the impact is much larger with passive trackers needing to buy 8.5 days on <a href="https://www.smartkarma.com/entities/wipro-ltd" target="_blank" data-smartkarma-citation="entities:15360:1" rel="noopener">Wipro Ltd (WPRO IN)</a>, while selling either 8.8 days on <a href="https://www.smartkarma.com/entities/bajaj-auto-ltd" target="_blank" data-smartkarma-citation="entities:3613:1" rel="noopener">Bajaj Auto Ltd (BJAUT IN)</a> or 13 days on <a href="https://www.smartkarma.com/entities/nestle-india-ltd" target="_blank" data-smartkarma-citation="entities:13101:1" rel="noopener">Nestle India (NEST IN)</a>.</p>
</div>

The S&amp;P BSE SENSEX Index (SENSEX INDEX) is the flagship index of the Bombay Stock Exchange (BSE). The index has 30 stocks and is a free float weighted market cap index. The next rebalance will be effective after the close of trading on 17 December.
The December review uses the market cap and turnover data from 1 May to 31 October to determine the stocks to be included and excluded from the index, and the announcement of the changes is done 4 weeks before the rebalance effective date.
With 6 days to go in the review period, we see Wipro Ltd (WPRO IN) as a high probability index addition. Bajaj Auto Ltd (BJAUT IN) is the lowest ranked index constituent and is a likely deletion from the index.
There is a (slim) possibility of Nestle India (NEST IN) being deleted from the index if it fails the annualised traded value test. As it stands, it is touch and go for the stock.
Passive trackers will need to buy over 2 days of ADV on Wipro Ltd (WPRO IN) and sell over 3.5 days of ADV on Bajaj Auto Ltd (BJAUT IN). If Nestle India (NEST IN) is deleted instead, passive trackers will need to sell 7 days of ADV on the stock.
In terms of delivery volumes, the impact is much larger with passive trackers needing to buy 8.5 days on Wipro Ltd (WPRO IN), while selling either 8.8 days on Bajaj Auto Ltd (BJAUT IN) or 13 days on Nestle India (NEST IN).


Sensex Dec 2021 Index Rebalance Preview: Wipro Should Be Added, Deletion Has An Interesting Option

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

<p>A "Buyback" is where (for our purposes) a publicly-listed company repurchases its shares from existing shareholders, sometimes in the market, sometimes in a structured buyback off exchange, and sometimes at a price higher than market price (in this insight, we will use the nouns "Buy-back" and "Buyback" interchangeably; the official regulatory documents in India often use the form with the hyphen).</p><p>When companies use excess cash to buy back shares, they often not only end up optimising their capital structure but also <em>"achieve</em>" EPS accretion with the aid of a reduction in the total share count of the company. Some companies use buy-backs to support their share prices during sluggish periods and others attempt to use it as a defence mechanism against hostile takeover situations.  Still others in India use it to return capital to their promoters.</p><p>All that is pretty well-known.</p><p>In India, such Buy-backs are governed by the <a href="https://www.sebi.gov.in/legal/regulations/jul-2019/securities-and-exchange-board-of-india-buy-back-of-securities-regulations-2018-last-amended-on-april-17-2020-_40327.html" target="_blank" rel="noopener">SEBI (BUY-BACK OF SECURITIES) REGULATIONS, 2018</a> (last amended on 17th April 2020) and are principally executed through three main mechanisms - Tender Offers, On-Market Transactions, and Book-building Processes. </p><p>This insight is the first of a two-part series by Quiddity on Indian Buy-backs.</p><p>In this insight, we will look into the regulations that govern each of the buy-back mechanisms to discover the basis for how they get executed.</p>

A "Buyback" is where (for our purposes) a publicly-listed company repurchases its shares from existing shareholders, sometimes in the market, sometimes in a structured buyback off exchange, and sometimes at a price higher than market price (in this insight, we will use the nouns "Buy-back" and "Buyback" interchangeably; the official regulatory documents in India often use the form with the hyphen).When companies use excess cash to buy back shares, they often not only end up optimising their capital structure but also "achieve" EPS accretion with the aid of a reduction in the total share count of the company. Some companies use buy-backs to support their share prices during sluggish periods and others attempt to use it as a defence mechanism against hostile takeover situations.  Still others in India use it to return capital to their promoters.All that is pretty well-known.In India, such Buy-backs are governed by the SEBI (BUY-BACK OF SECURITIES) REGULATIONS, 2018 (last amended on 17th April 2020) and are principally executed through three main mechanisms - Tender Offers, On-Market Transactions, and Book-building Processes. This insight is the first of a two-part series by Quiddity on Indian Buy-backs.In this insight, we will look into the regulations that govern each of the buy-back mechanisms to discover the basis for how they get executed.

Quiddity India Buy-Back Guide 2021: Regulations & Patterns

India

NTPC Ltd. owns and operates power generation plants that supply power to state electricity boards throughout India.  The Company is a public sector undertaking of the Government of India and it also undertakes turnkey consulting projects to set up power plants.

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NTPC Ltd (NTPC IN)

Power Plus: Peak winter demand remains subdued

The base deficit rose marginally to 0.4% in Dec-21 while peak deficit fell to 0.1% vs 0.6% MoM, with the merchant rate at INR3.2/unit. As of Jan...

HDFC Securities

Power Plus: Low demand, better supply ups coal inventory 1.5x

While the Centre has dropped the DBT scheme from the proposed bill, other reforms like delicencing and smart metering can be the silver lining that...

HDFC Securities

HSIE Results Daily: NTPC, DLF, InterGlobe Aviation, Tata Power, GAIL (India), JSW Energy, Bandhan...

GAIL (India): Our BUY recommendation on GAIL with a price target of INR 210 is based on 9% CAGR expansion in gas transmission volume over FY22-24E...

HDFC Securities

Sensex Dec 2021 Index Rebalance Preview: Wipro Should Be Added, Deletion Has An Interesting Option

Near the end of the review period, we see Wipro as a high probability add. Bajaj Auto could be deleted as the lowest ranked constituent, but Nestle...

Brian Freitas

Quiddity India Buy-Back Guide 2021: Regulations & Patterns

This insight is a basic primer of Indian buyback types, rules and regulations, and is part of a two-part series, with the other part being a

Travis Lundy

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