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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

<ul>
<li>We see 8 stocks moving from MidCap to LargeCap, 8 stocks moving from LargeCap to MidCap, 13 stocks from SmallCap to MidCap, and 13 stocks from MidCap to SmallCap.</li>
<li>The expected migrations from SmallCap to MidCap have outperformed the other potential migrations with all stocks moving higher over the last six month.</li>
<li>Active managers could continue to realign their portfolios. Some of the upward migrations will have passive flows in the next few days and over the next few months.</li>
</ul>


We see 8 stocks moving from MidCap to LargeCap, 8 stocks moving from LargeCap to MidCap, 13 stocks from SmallCap to MidCap, and 13 stocks from MidCap to SmallCap.
The expected migrations from SmallCap to MidCap have outperformed the other potential migrations with all stocks moving higher over the last six month.
Active managers could continue to realign their portfolios. Some of the upward migrations will have passive flows in the next few days and over the next few months.


AMFI Stock Reclassification Preview (Dec 2023): Overlap Between Active & Passive Flows

External broker reports(aggregated public sources), HDFC Securities

HDFC Securities

External broker reports(aggregated public sources)

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Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

Thematic (Sector/Industry)

<ul><li>Bharat Forge: Bharat Forge’s consolidated PAT at INR 2.2 bn is better than our estimate of INR 1.8bn, led by a performance beat at both standalone and overseas subsidiaries</li><li>Performance beat was largely driven by better-than-expected revenue growth at the standalone entity and break-even at the Europe subsidiary</li><li>We continue to highlight that BHFC has multiple growth levers to offset any potential slowdown from US Class8 which include: (1) defence orders that are likely to see this segment’s revenue ramp-up to INR 17bn by FY25E, from INR 3.5bn in FY23, (2) strong growth expected in PV and industrial exports, (3) huge ramp-up potential at JS-Auto Cast, given its capacity is expected to increase by 2x and there is a huge demand for castings, both in India and abroad, (4) strong order backlog in aerospace, which would help boost revenue to INR 5bn over next the four years, from INR 1.7bn</li></ul><p><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></p>

Bharat Forge: Bharat Forge’s consolidated PAT at INR 2.2 bn is better than our estimate of INR 1.8bn, led by a performance beat at both standalone and overseas subsidiariesPerformance beat was largely driven by better-than-expected revenue growth at the standalone entity and break-even at the Europe subsidiaryWe continue to highlight that BHFC has multiple growth levers to offset any potential slowdown from US Class8 which include: (1) defence orders that are likely to see this segment’s revenue ramp-up to INR 17bn by FY25E, from INR 3.5bn in FY23, (2) strong growth expected in PV and industrial exports, (3) huge ramp-up potential at JS-Auto Cast, given its capacity is expected to increase by 2x and there is a huge demand for castings, both in India and abroad, (4) strong order backlog in aerospace, which would help boost revenue to INR 5bn over next the four years, from INR 1.7bnContent 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: Bharat Forge, Phoenix Mills, Oil India, Prestige Estates

External broker reports(aggregated public sources), Axis Direct

Axis Direct

Axis Direct is the flagship brand under Axis Securities Limited, a subsidiary of Axis Bank in India. 

Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

Equity Bottom-Up

<ul><li>Aarti Industries Q1FY24 numbers surprised on the PAT front with the company utilising its MAT Credit to negate tax outgo.</li><li>Consolidated Revenue missed our estimate by 8% (down 12%/14% YoY/QoQ).</li><li>EBITDA stood lower (down 28%/ 20% YoY/QoQ) on account of lower RM prices and high employee expenses but beat our estimates by 5.2% as we expected a lower gross margin.</li></ul><p><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></p>

Aarti Industries Q1FY24 numbers surprised on the PAT front with the company utilising its MAT Credit to negate tax outgo.Consolidated Revenue missed our estimate by 8% (down 12%/14% YoY/QoQ).EBITDA stood lower (down 28%/ 20% YoY/QoQ) on account of lower RM prices and high employee expenses but beat our estimates by 5.2% as we expected a lower gross margin.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.

Aarti Industries Ltd - Weak Demand Outlook in Near-Term to Persist:

<div><div><div><div><ul><li>Specialty Chemicals sector stands in puddle facing twin problems of falling demand due to reduction in discretionary spends affecting end-user industries such as dyes pigments and inventory issues in agro-chem, pharma API segment.</li><li>This situation is further aggravated by over-supply in certain Chemicals from Chinese players leading to severe price freefall of certain chemicals in South-East Asia region.</li><li>Chemical companies with strong brand history and goodwill &amp; execution track record in CSM/CDMO with good quality order book can withstand the coming storm, although commoditized manufacturers will be strictly punished in coming quarters, alongside certain specialty players with import substitution risk. </li></ul></div></div></div></div><p><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></p>

Specialty Chemicals sector stands in puddle facing twin problems of falling demand due to reduction in discretionary spends affecting end-user industries such as dyes pigments and inventory issues in agro-chem, pharma API segment.This situation is further aggravated by over-supply in certain Chemicals from Chinese players leading to severe price freefall of certain chemicals in South-East Asia region.Chemical companies with strong brand history and goodwill &amp; execution track record in CSM/CDMO with good quality order book can withstand the coming storm, although commoditized manufacturers will be strictly punished in coming quarters, alongside certain specialty players with import substitution risk. 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.

Q1 FY24 PREVIEW: CHEMICALS & MIDCAP (OUTLOOK)

<ul><li>Aarti Industries: We maintain our BUY recommendation on Aarti Industries (AIL), with a target price of INR 726/share</li><li>AIL's constant focus on Capex and R&amp;D will enable it to remain competitive and expand its customer base</li><li>The toluene segment in India is mainly untapped and catered to through imports AIL will benefit in the long term by entering this segment</li></ul><p><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></p>

Aarti Industries: We maintain our BUY recommendation on Aarti Industries (AIL), with a target price of INR 726/shareAIL's constant focus on Capex and R&amp;D will enable it to remain competitive and expand its customer baseThe toluene segment in India is mainly untapped and catered to through imports AIL will benefit in the long term by entering this segmentContent 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: Aarti Industries, Westlife Foodworld, Kalpataru Power Transmission

India

Aarti Industries Limited develops and manufactures basic bulk chemicals, dyes and pigment intermediates, pharmaceuticals and agrochemicals, rubber chemicals, surfactant intermediates, and specialty chemicals. The company sells its products in India and elsewhere throughout the world.

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Aarti Industries (ARTO IN)

AMFI Stock Reclassification Preview (Dec 2023): Overlap Between Active & Passive Flows

We see 42 potential migrations between the size categories. The small to mid migrations have outperformed. There will be a lot of overlap between...

Brian Freitas

HSIE Results Daily: Bharat Forge, Phoenix Mills, Oil India, Prestige Estates

Bharat Forge’s consolidated PAT at INR 2.2 bn is better than our estimate of INR 1.8bn, led by a performance beat at both standalone and overseas...

HDFC Securities

Aarti Industries Ltd - Weak Demand Outlook in Near-Term to Persist:

Aarti Industries Q1FY24 numbers surprised on the PAT front with the company utilising its MAT Credit to negate tax outgo.

Axis Direct

Q1 FY24 PREVIEW: CHEMICALS & MIDCAP (OUTLOOK)

Specialty Chemicals sector stands in puddle facing twin problems of falling demand due to reduction in discretionary spends affecting end-user...

Axis Direct

HSIE Results Daily: Aarti Industries, Westlife Foodworld, Kalpataru Power Transmission

The toluene segment in India is mainly untapped and catered to through imports AIL will benefit in the long term by entering this segment

HDFC Securities

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52-week Range

Market Cap (USDm)

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