External broker reports(aggregated public sources), Axis Direct

Axis Direct

External broker reports(aggregated public sources)

Equity Bottom-Up

Cholamandalam Investment and Finance / Equity Bottom-Up

<p>Cholamandalam Invst. &amp; Finance Company Ltd (CIFC) Q1FY22 performance was a mixed bag, with strong operating performance (PPOP up 55.8%/19.9% YoY/QoQ) while elevated provisioning of Rs 5.6 Bn led to a PAT de-growth of 24% YoY (up 34% QoQ). NII growth (34.8%/1.4% YoY/QoQ) was driven by stable NIM of 7.6% even as the AUM growth lagged. Disbursements were muted at Rs 36 Bn, down 55% QoQ as mobility was restricted due to lockdown restrictions. Asset quality deteriorated as Gross stage 3 assets rose to 6.8% (4% QoQ).</p><p>We maintain HOLD with a target price of 570 (3.7x FY23 P/ABV)</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>

Cholamandalam Invst. &amp; Finance Company Ltd (CIFC) Q1FY22 performance was a mixed bag, with strong operating performance (PPOP up 55.8%/19.9% YoY/QoQ) while elevated provisioning of Rs 5.6 Bn led to a PAT de-growth of 24% YoY (up 34% QoQ). NII growth (34.8%/1.4% YoY/QoQ) was driven by stable NIM of 7.6% even as the AUM growth lagged. Disbursements were muted at Rs 36 Bn, down 55% QoQ as mobility was restricted due to lockdown restrictions. Asset quality deteriorated as Gross stage 3 assets rose to 6.8% (4% QoQ).We maintain HOLD with a target price of 570 (3.7x FY23 P/ABV)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.

Cholamandalam Invesment & Finance: Strong Operating Performance; Pressure on Asset Quality

External broker reports(aggregated public sources), HDFC Securities

HDFC Securities

<p>HSIE Results Daily NTPC: Generation/sales increased 19.2%/19.3% YoY to 71.7bn/66.6bn unit in Q1FY22 on the back of demand recovery. Coal PAF, however, declined in Q1FY22 to 94% vs 96% YoY, but coal PLF was up at 70% in Q1FY22 vs 58.2% YoY. Underrecovery in Q1FY22 came in at INR1.9bn. After adjusting for previous periods and one-off items, adjusted PAT came in at INR31.6bn above our estimate. Debtors (&gt;45 days) increased to INR90bn vs INR65bn QoQ during the second corona wave. NTPC plans to add 15GW of RES capacity by FY24 and another 45GW by FY32.</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>

HSIE Results Daily NTPC: Generation/sales increased 19.2%/19.3% YoY to 71.7bn/66.6bn unit in Q1FY22 on the back of demand recovery. Coal PAF, however, declined in Q1FY22 to 94% vs 96% YoY, but coal PLF was up at 70% in Q1FY22 vs 58.2% YoY. Underrecovery in Q1FY22 came in at INR1.9bn. After adjusting for previous periods and one-off items, adjusted PAT came in at INR31.6bn above our estimate. Debtors (&gt;45 days) increased to INR90bn vs INR65bn QoQ during the second corona wave. NTPC plans to add 15GW of RES capacity by FY24 and another 45GW by FY32.
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, IOC, Britannia and More

<p>We reiterate CIFC among larger NBFCs and CREDAG among mid-sized ones as our top picks within our universe. As REPCO finally brought the curtain down on a long earnings season for NBFCs, we argue that within our coverage universe (18% of the NBFC AUM market share), they are comfortably positioned on their balance sheets, having utilised the benign funding cost environment (50-150bps benefit during FY21) to significantly shore up their coverage (FY21: 2.5%, FY20: 2%). The second wave is likely to manifest itself in deferred disbursement momentum, softer collections, and a larger restructured portfolio (compared to FY21).</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>

We reiterate CIFC among larger NBFCs and CREDAG among mid-sized ones as our top picks within our universe. As REPCO finally brought the curtain down on a long earnings season for NBFCs, we argue that within our coverage universe (18% of the NBFC AUM market share), they are comfortably positioned on their balance sheets, having utilised the benign funding cost environment (50-150bps benefit during FY21) to significantly shore up their coverage (FY21: 2.5%, FY20: 2%). The second wave is likely to manifest itself in deferred disbursement momentum, softer collections, and a larger restructured portfolio (compared to FY21).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.

NBFCs: Pandemic year navigated; recovery interrupted

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

<p>In this Insight, we present our takeaways from interaction with transport operators, recovery agents and collection heads across Bihar, Uttar Pradesh, Maharashtra, Tamil Nadu and Punjab.  Our focus companies are <a href="https://www.smartkarma.com/entities/cholamandalam-investment-and-finance" target="_blank" data-smartkarma-citation="entities:17583:1" rel="noopener">Cholamandalam Investment and Finance (CIFC IN)</a> / <a href="https://www.smartkarma.com/entities/shriram-transport-finance" target="_blank" data-smartkarma-citation="entities:253:1" rel="noopener">Shriram Transport Finance (SHTF IN)</a> / <a href="https://www.smartkarma.com/entities/indusind-bank-ltd" target="_blank" data-smartkarma-citation="entities:1558:1" rel="noopener">Indusind Bank (IIB IN)</a> </p>
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<p>We have also included our notes in this insight, for those who want to have a deeper look at how we go about doing our checks.</p>
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<h2>About India Channel Insight</h2>
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<p>Our objective with India Channel Insight is to share snippets from our channel interactions that are part of our research process. These snippets can potentially be signals for larger themes/ideas emerging out of these interactions.  </p>
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In this Insight, we present our takeaways from interaction with transport operators, recovery agents and collection heads across Bihar, Uttar Pradesh, Maharashtra, Tamil Nadu and Punjab.  Our focus companies are Cholamandalam Investment and Finance (CIFC IN) / Shriram Transport Finance (SHTF IN) / Indusind Bank (IIB IN) 

We have also included our notes in this insight, for those who want to have a deeper look at how we go about doing our checks.


About India Channel Insight


Our objective with India Channel Insight is to share snippets from our channel interactions that are part of our research process. These snippets can potentially be signals for larger themes/ideas emerging out of these interactions.  


India Channel Insight | Chola, Shriram, Indusind - Borrower Health Update

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

<div><p>The Indian mutual fund industry has assets of almost INR 6.6 trillion across Multi cap, Large Cap, Large and Mid Cap, Mid Cap, Small Cap and Flexi Cap equity schemes. Equity schemes classified as large cap need to have at least 80% of their assets invested in large cap stocks, large and mid cap schemes need to have at least 35% of their assets in large cap stocks and at least 35% in mid cap stocks, mid cap funds need to hold at least 65% of their assets in mid cap stocks, and small cap funds need to hold at least 65% of their assets in small cap stocks. Flexi cap funds can invest across market caps.</p></div><div>
<p>The Association of Mutual Funds in India (AMFI) publishes the list of the stocks in each market cap segment in January and July each year and mutual funds have one month to rebalance their portfolios to adhere to the new categorization.</p>
<p>At the next recategorization in July 2021, we see 7 stocks moving from the mid cap segment to the large cap segment with an equal number of stocks moving the other way, and 13 stocks are expected to move from the small cap segment to the mid cap segment with the 16 stocks moving from the mid cap to the small cap segment. There are 3 recent listings that will enter the mid cap segment with over 18 joining the small cap segment.</p>
<p>Historically, the stocks migrating upward to a higher market cap segment have outperformed stocks that migrate to a lower market cap segment over the 1 month and 2 month period post the publishing of the AMFI list. This can be attributed to fund managers realigning their portfolios to meet the new categorization. This provides opportunities to pre-position for the move and unwind post the announcement of the reclassification.</p>
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The Indian mutual fund industry has assets of almost INR 6.6 trillion across Multi cap, Large Cap, Large and Mid Cap, Mid Cap, Small Cap and Flexi Cap equity schemes. Equity schemes classified as large cap need to have at least 80% of their assets invested in large cap stocks, large and mid cap schemes need to have at least 35% of their assets in large cap stocks and at least 35% in mid cap stocks, mid cap funds need to hold at least 65% of their assets in mid cap stocks, and small cap funds need to hold at least 65% of their assets in small cap stocks. Flexi cap funds can invest across market caps.
The Association of Mutual Funds in India (AMFI) publishes the list of the stocks in each market cap segment in January and July each year and mutual funds have one month to rebalance their portfolios to adhere to the new categorization.
At the next recategorization in July 2021, we see 7 stocks moving from the mid cap segment to the large cap segment with an equal number of stocks moving the other way, and 13 stocks are expected to move from the small cap segment to the mid cap segment with the 16 stocks moving from the mid cap to the small cap segment. There are 3 recent listings that will enter the mid cap segment with over 18 joining the small cap segment.
Historically, the stocks migrating upward to a higher market cap segment have outperformed stocks that migrate to a lower market cap segment over the 1 month and 2 month period post the publishing of the AMFI list. This can be attributed to fund managers realigning their portfolios to meet the new categorization. This provides opportunities to pre-position for the move and unwind post the announcement of the reclassification.


India: Stock Reclassification & Active Portfolio Management

India

Cholamandalam Investment and Finance Company Limited operates as a financial services provider. The Company offers vehicle finance, home equity loans, investment advisory, stock broking, and other financial services to customers.

Cholamandalam Investment and Finance (CIFC IN)

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Cholamandalam Investment and Finance (CIFC IN)

Cholamandalam Invesment & Finance: Strong Operating Performance; Pressure on Asset Quality

We maintain HOLD with a target price of 570 (3.7x FY23 P/ABV). Cholamandalam Invesment & Finance (CIFC) Q1FY22 performance was a mixed bag.

Axis Direct

HSIE Results Daily: NTPC, IOC, Britannia and More

NTPC: Generation/sales increased 19.2%/19.3% YoY to 71.7bn/66.6bn unit in Q1FY22 on the back of demand recovery. Coal PAF, however, declined in...

HDFC Securities

NBFCs: Pandemic year navigated; recovery interrupted

We reiterate CIFC among larger NBFCs and CREDAG among mid-sized ones as our top picks within our universe. As REPCO finally brought the curtain...

HDFC Securities

India Channel Insight | Chola, Shriram, Indusind - Borrower Health Update

In this Insight, we present our takeaways from interaction with transport operators, recovery agents and collection heads across Bihar, Utter...

Pranav Bhavsar

India: Stock Reclassification & Active Portfolio Management

There are a lot of segment changes expected in July when AMFI recategorizes stocks and mutual funds start to rebalance their portfolios. We...

Brian Freitas

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