Consumer Analyst / Channel Surveillance Specialist, Trudence Capital Advisors

Pranav Bhavsar

Consumer Analyst / Channel Surveillance Specialist

Trudence Capital Advisors

Trudence Capital Advisors Private Limited is a SEBI-registered Research Analyst, holding SEBI registration number INH000015747. Our firm is dedicated to providing independent and unbiased research on Indian mid to large-cap companies. Trudence Capital is known for its counter-consensus views, with a focus on forensic research and on-ground primary investigations. Our research approach is thorough, involving detailed analysis of accounting practices and governance, alongside extensive channel checks.

Independent & Unbiased Research

Thematic (Sector/Industry)

<p>The objective of this insight is to reflect back on our work published on SmartKarma - to highlight what has worked for us and more importantly what has not worked and our plans to improve the same. </p>
<p>2020 is indeed special and we are unlikely to see something similar in our professional life once again. Therefore, we have made an attempt to capture our key learnings, which will also enable us to reflect back on the same at frequent intervals in time. </p>
<p>We also highlight our key themes for 2021 along with sectorial preferences where we might deploy our resources. </p>

The objective of this insight is to reflect back on our work published on SmartKarma - to highlight what has worked for us and more importantly what has not worked and our plans to improve the same. 
2020 is indeed special and we are unlikely to see something similar in our professional life once again. Therefore, we have made an attempt to capture our key learnings, which will also enable us to reflect back on the same at frequent intervals in time. 
We also highlight our key themes for 2021 along with sectorial preferences where we might deploy our resources. 

2020 Review & 2021 Key Themes | What Worked and What Has Not

ASA Capital Management

ASA Capital Management is a boutique Research and Investment Advisory firm focusing on primary research in India. ASA provides bespoke research services to Institutional Clients with a focus on due diligence backed with primary research, Field Trips & Channel Checks.

Equity Bottom-Up

<p>Our objective with this weekly is to highlight notable developments in the India internet and consumer sector focusing on public and private companies. The sub-sectors covered include payment providers, e-commerce retailers,  social media platforms and consumer companies.</p>
<ul>
<li>PUBG Corporation struggles to make a come back in India. After breaking ties with <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent Holdings (700 HK)</a> as their distribution partner in India - the company now looks at <a href="https://www.smartkarma.com/entities/bharti-airtel-ltd" target="_blank" data-smartkarma-citation="entities:953:1" rel="noopener">Bharti Airtel (BHARTI IN)</a> to be their godfather.</li>
<li>
<a href="https://www.smartkarma.com/entities/amazon-com-inc" target="_blank" data-smartkarma-citation="entities:409:1" rel="noopener">Amazon.com Inc (AMZN US)</a> pumps in another 7 billion INR into its payments platform Amazon Pay to give it the push it needs with the Indian festive season around the corner.</li>
<li>
<a href="https://www.smartkarma.com/entities/titan-co-ltd" target="_blank" data-smartkarma-citation="entities:12630:1" rel="noopener">Titan Co Ltd (TTAN IN)</a> shines on in its journey back to normalcy with a great performance this quarter.</li>
</ul>

Our objective with this weekly is to highlight notable developments in the India internet and consumer sector focusing on public and private companies. The sub-sectors covered include payment providers, e-commerce retailers,  social media platforms and consumer companies.

PUBG Corporation struggles to make a come back in India. After breaking ties with Tencent Holdings (700 HK) as their distribution partner in India - the company now looks at Bharti Airtel (BHARTI IN) to be their godfather.

Amazon.com Inc (AMZN US) pumps in another 7 billion INR into its payments platform Amazon Pay to give it the push it needs with the Indian festive season around the corner.

Titan Co Ltd (TTAN IN) shines on in its journey back to normalcy with a great performance this quarter.


India Internet & Consumer Weekly | Airtel, Amazon & Titan

Indian Accounting Research Analyst, Trudence Capital Advisors

Nitin Mangal

Indian Accounting Research Analyst

<p>The Indian Telecom Industry had been cautioned yesterday for yet another time, as Jio (<a href="https://www.smartkarma.com/entities/reliance-industries-ltd" target="_blank" data-smartkarma-citation="entities:198:1" rel="noopener">Reliance Industries (RIL IN))</a> came up with a fresh set of postpaid plus plans. Consequently the panic spread to <a href="https://www.smartkarma.com/entities/bharti-airtel-ltd" target="_blank" data-smartkarma-citation="entities:953:1" rel="noopener">Bharti Airtel (BHARTI IN)</a> and <a href="https://www.smartkarma.com/entities/vodafone-idea-ltd" target="_blank" data-smartkarma-citation="entities:15678:1" rel="noopener">Vodafone Idea (IDEA IN)</a> as their shares saw a sharp, alarming downfall of 7.9% and 10% respectively in today's trading session. </p><p>While many believe that this is an awakening of new tariff war, we however feel that the move is nothing but a sentimental boost and would have no major damaging impact on the industry dynamics. </p>

The Indian Telecom Industry had been cautioned yesterday for yet another time, as Jio (Reliance Industries (RIL IN)) came up with a fresh set of postpaid plus plans. Consequently the panic spread to Bharti Airtel (BHARTI IN) and Vodafone Idea (IDEA IN) as their shares saw a sharp, alarming downfall of 7.9% and 10% respectively in today's trading session. While many believe that this is an awakening of new tariff war, we however feel that the move is nothing but a sentimental boost and would have no major damaging impact on the industry dynamics. 

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

<p>Late Friday evening, the Securities and Exchange Board of India (SEBI) published a blandly titled '<a href="https://www.sebi.gov.in/legal/circulars/sep-2020/circular-on-asset-allocation-of-multi-cap-funds_47542.html" target="_blank" rel="noopener"><em>Circular on Asset Allocation of Multi Cap Funds</em></a>'. The implications of the circular, however, are not as bland and will result in a big shift in allocation among market cap segments in Indian mutual funds and drive trading activity over the next few months.</p><p>SEBI has now mandated that Mutual Fund schemes classified as 'Multi Cap Funds' need to invest a minimum of 75% of their total scheme assets in equities and equity related investments with a minimum 25% allocation to each segment: large caps, mid caps and small caps. Currently, the top 11 multi cap schemes by assets (making up 85% of total multi cap assets) hold 78% of their assets in large cap stocks, 16.6% in mid cap stocks, and only 5.4% in small cap stocks.</p><p>All Multi Cap funds have till the first week of February 2021 to meet the new requirements. While there will not be a big impact on large cap stocks, there could be a very big impact on small cap funds. The Nifty Smallcap 250 index has underperformed the Nifty 100 and the Nifty Midcap 150 index over the last year and could outperform over the next few months.</p>

Late Friday evening, the Securities and Exchange Board of India (SEBI) published a blandly titled 'Circular on Asset Allocation of Multi Cap Funds'. The implications of the circular, however, are not as bland and will result in a big shift in allocation among market cap segments in Indian mutual funds and drive trading activity over the next few months.SEBI has now mandated that Mutual Fund schemes classified as 'Multi Cap Funds' need to invest a minimum of 75% of their total scheme assets in equities and equity related investments with a minimum 25% allocation to each segment: large caps, mid caps and small caps. Currently, the top 11 multi cap schemes by assets (making up 85% of total multi cap assets) hold 78% of their assets in large cap stocks, 16.6% in mid cap stocks, and only 5.4% in small cap stocks.All Multi Cap funds have till the first week of February 2021 to meet the new requirements. While there will not be a big impact on large cap stocks, there could be a very big impact on small cap funds. The Nifty Smallcap 250 index has underperformed the Nifty 100 and the Nifty Midcap 150 index over the last year and could outperform over the next few months.

India Small Caps: Position for Outperformance Vs Large & Mid Caps

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<div>
<p>Investors and <a href="https://www.smartkarma.com/entities/singapore-telecommunications" target="_blank" data-smartkarma-citation="entities:20:1" rel="noopener">Singtel (ST SP)</a> have unerringly been disconnected in 2020. Shares are currently trading at their lowest level outside the GFC.</p>
<p>Sentiment was not helped by the 24% decline in EBITDA (excluding the results of its regional associates) for the <a href="https://links.sgx.com/FileOpen/1stqtr-BusinessUpdate.ashx?App=Announcement&amp;FileID=628134" target="_blank" rel="noopener">June-ending quarter</a> announced the 14 August.</p>
</div>
<p>I see the implied stub - net of all its listed holdings - at an all-time low.</p>
<h2>Implied Stub (in S$/share) - Stripping Out All Listcos</h2>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/156/814/original/image_98073797421599099095235.png?1599099097" class="editor-image img-responsive" data-smartkarma-image-id="156814"></figure>
<div style="text-align: left;" class="content-caption">Source: CapIQ, the orange band represents 2StDevs from the average</div>
<p>The discount to NAV of 44% is also around its widest ever recorded. </p>
<div>
<p>COVID-19 promotes tough market conditions. Yet SingTel appears to have overshot to the downside, providing an inexpensive entry into <a href="https://www.smartkarma.com/entities/bharti-airtel-ltd" target="_blank" data-smartkarma-citation="entities:953:1" rel="noopener">Bharti Airtel (BHARTI IN)</a>.</p>
</div>


Investors and Singtel (ST SP) have unerringly been disconnected in 2020. Shares are currently trading at their lowest level outside the GFC.
Sentiment was not helped by the 24% decline in EBITDA (excluding the results of its regional associates) for the June-ending quarter announced the 14 August.

I see the implied stub - net of all its listed holdings - at an all-time low.
Implied Stub (in S$/share) - Stripping Out All Listcos

Source: CapIQ, the orange band represents 2StDevs from the average
The discount to NAV of 44% is also around its widest ever recorded. 

COVID-19 promotes tough market conditions. Yet SingTel appears to have overshot to the downside, providing an inexpensive entry into Bharti Airtel (BHARTI IN).


India

Bharti Airtel Limited, a part of Bharti Enterprises, provides telecommunications services throughout India. The Company provides GSM Mobile Services, broadband, fixed line telephone services, long distance services (international & national) and enterprise services.

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Bharti Airtel (BHARTI IN)

2020 Review & 2021 Key Themes | What Worked and What Has Not

A walk down the memory lane. What has worked, what has not, what have we learnt and how we think 2021 will pan out, this insight is our reflection...

Pranav Bhavsar

India Internet & Consumer Weekly | Airtel, Amazon & Titan

This week we cover Airtel's attempt to reinforce its E-sports strategy with talks bring PUBG back, Amazon Pay gearing up for the festive season,...

Pranav Bhavsar

Reliance Jio: Fate of Postpaid Plans

The Indian Telecom Industry had been

Nitin Mangal

India Small Caps: Position for Outperformance Vs Large & Mid Caps

Late Friday evening, the Securities and Exchange Board of Indian

Brian Freitas

SingTel: Make The Call

This morning Singtel (ST SP) announced its FY20 (Mar-Y/E) results. The key takeaways were: A 2% decline in operating revenue of S$16.54bn. 4Q20...

David Blennerhassett

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