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

Equity Bottom-Up

<ul>
<li>The situation in West Bengal is improving/stable. While Assam is showing no signs of improvement</li>
<li>Recent floods have impacted collections, however, as highlighted earlier they are not likely to slip into NPA.</li>
<li>The asset quality downcycle could be on the verge of ending.  Additional provisioning requirements should be sharply lower from Q3. </li>
</ul>


The situation in West Bengal is improving/stable. While Assam is showing no signs of improvement
Recent floods have impacted collections, however, as highlighted earlier they are not likely to slip into NPA.
The asset quality downcycle could be on the verge of ending.  Additional provisioning requirements should be sharply lower from Q3. 


India Channel Insight #43 | Bandhan Bank - One More Quarter of Pain?

<ul>
<li>Our channels in Assam indicate a high impact of floods this year on the overall state economy. Normalcy is expected to take 4-5 months in order to be restored. </li>
<li>Despite the high impact, <a href="https://www.smartkarma.com/entities/bandhan-bank-ltd" target="_blank" data-smartkarma-citation="entities:26705:1" rel="noopener">Bandhan Bank Ltd (BANDHAN IN)</a> may not see an increase in NPAs.</li>
<li>New recovery tools, changing regulations and customer mindsets are aiding faster than anticipated recovery even for older loans. </li>
</ul>


Our channels in Assam indicate a high impact of floods this year on the overall state economy. Normalcy is expected to take 4-5 months in order to be restored. 
Despite the high impact, Bandhan Bank Ltd (BANDHAN IN) may not see an increase in NPAs.
New recovery tools, changing regulations and customer mindsets are aiding faster than anticipated recovery even for older loans. 


India Channel Insight #40 | Assam Floods and Impact on Financials

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>Nearing the end of the review period, we see 5 stocks moving from MidCap to LargeCap, 2 new listings added to LargeCap and 7 stocks moving from LargeCap to MidCap.</li>
<li>We see 7 stocks moving from SmallCap to MidCap, 3 new listings added to MidCap, and 12 stocks moving from MidCap to SmallCap.</li>
<li>Stock migrating upward have, on average, outperformed stocks that are downward migrations. Stocks moving from MidCap to LargeCap have performed the best.</li>
</ul>


Nearing the end of the review period, we see 5 stocks moving from MidCap to LargeCap, 2 new listings added to LargeCap and 7 stocks moving from LargeCap to MidCap.
We see 7 stocks moving from SmallCap to MidCap, 3 new listings added to MidCap, and 12 stocks moving from MidCap to SmallCap.
Stock migrating upward have, on average, outperformed stocks that are downward migrations. Stocks moving from MidCap to LargeCap have performed the best.


India: AMFI Stock Reclassification Preview

Specialist in Indian Banking and Economic Research

Hemindra Hazari

<ul>
<li>When stocks languish, or spiral downwards, it is not just shareholders whose wealth erodes. Senior executives, also suffer, as much of their personal wealth may be tied up in ESOPs. </li>
<li>Few HDFC Bank ESOPs  may be of concern to executives while many ESOPs of RBL Bank and Bandhan Bank are under water</li>
<li>ESOPs are a major retention tool for holding onto executives. If ESOPs are under water it may accelerate senior executive attrition worsening the situation</li>
</ul>


When stocks languish, or spiral downwards, it is not just shareholders whose wealth erodes. Senior executives, also suffer, as much of their personal wealth may be tied up in ESOPs. 
Few HDFC Bank ESOPs  may be of concern to executives while many ESOPs of RBL Bank and Bandhan Bank are under water
ESOPs are a major retention tool for holding onto executives. If ESOPs are under water it may accelerate senior executive attrition worsening the situation


When Bank ESOPs Go Under Water, Expect Senior Management to Be Distracted or Departing

<ul>
<li>Two-Thirds of the way through the review period, we see 7 stocks migrating from MidCap to LargeCap, 8 stocks from LargeCap to MidCap, and 1 new listing added to LargeCap.</li>
<li>Post listing, <a href="https://www.smartkarma.com/entities/life-insurance-corp-of-india-lic" target="_blank" data-smartkarma-citation="entities:28829:1" rel="noopener">Life Insurance Corp of India (LIC) (1248Z IN)</a> should be added to the LargeCap segment while <a href="https://www.smartkarma.com/entities/delhivery-pvt-ltd" target="_blank" data-smartkarma-citation="entities:33471:1" rel="noopener">Delhivery (1058656D IN)</a> should be added to the MidCap segment.</li>
<li>On average, stocks expected to migrate from Mid Cap to Large Cap have outperformed. Stocks expected to migrate from the Large Cap to Mid Cap segment have performed the worst.</li>
</ul>


Two-Thirds of the way through the review period, we see 7 stocks migrating from MidCap to LargeCap, 8 stocks from LargeCap to MidCap, and 1 new listing added to LargeCap.
Post listing, Life Insurance Corp of India (LIC) (1248Z IN) should be added to the LargeCap segment while Delhivery (1058656D IN) should be added to the MidCap segment.
On average, stocks expected to migrate from Mid Cap to Large Cap have outperformed. Stocks expected to migrate from the Large Cap to Mid Cap segment have performed the worst.


India: Preview of Stock Reclassification for Active Funds

India

Bandhan Bank Limited operates as a commercial bank. The Bank provides accounts checking, savings deposits, money market, mortgage, and term loans services, as well as card facilities and Internet banking services. Bandhan Bank serves customers in India.

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Bandhan Bank Ltd (BANDHAN IN)

India Channel Insight #43 | Bandhan Bank - One More Quarter of Pain?

We speak to channels in West Bengal and Assam to gauge the sentiment and situation on the ground with the focus on EEB (microfinance) portfolio.

Pranav Bhavsar

India Channel Insight #40 | Assam Floods and Impact on Financials

We speak to channels on the ground in Assam to understand the current flood situation and its likely impact on asset quality for financials.

Pranav Bhavsar

India: AMFI Stock Reclassification Preview

With 9 trading days to go in the review period, we see 5 stocks moving from Mid to Large and 7 stocks moving the other way. 2 new listings will be...

Brian Freitas

When Bank ESOPs Go Under Water, Expect Senior Management to Be Distracted or Departing

A decling/flat share price not only frustrates shareholders but can prove disastrous for senior executives either locked into/granted ESOPs at...

Hemindra Hazari

India: Preview of Stock Reclassification for Active Funds

Two-thirds of the way through the review period, we see quite a few changes to the Large/Mid/Small Cap classification for Indian stocks. The upward...

Brian Freitas

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