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

Escorts Kubota Limited / Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/escorts-ltd" target="_blank" data-smartkarma-citation="entities:6773:1" rel="noopener">Escorts Ltd (ESC IN)</a> has been losing market share. As per management, <strong>"there are no "big" problems and they will regain the market share"</strong>, but we do not think so. </li>
<li>Some flash channel checks are suggesting issues with some of the company's products. These issues still remain unaddressed as per some dealers and customers. </li>
<li>While the export opportunity and overall industry dynamics are positive unless the market share is regained, growth is likely to be slower than industry. </li>
</ul>



Escorts Ltd (ESC IN) has been losing market share. As per management, "there are no "big" problems and they will regain the market share", but we do not think so. 
Some flash channel checks are suggesting issues with some of the company's products. These issues still remain unaddressed as per some dealers and customers. 
While the export opportunity and overall industry dynamics are positive unless the market share is regained, growth is likely to be slower than industry. 


Escorts Ltd (ESC IN) | Expected to Grow Slower than Industry

<ul>
<li>Consumer sentiment and demand environment is stable in Rural India. </li>
<li>There is a bit of optimism and hope of breaching FY20 volumes in FY23, supported with some pricing action. </li>
<li>Technical/Product issues are leading to a loss of market share for <a href="https://www.smartkarma.com/entities/escorts-ltd" target="_blank" data-smartkarma-citation="entities:6773:1" rel="noopener">Escorts Ltd (ESC IN)</a> </li>
</ul>


Consumer sentiment and demand environment is stable in Rural India. 
There is a bit of optimism and hope of breaching FY20 volumes in FY23, supported with some pricing action. 
Technical/Product issues are leading to a loss of market share for Escorts Ltd (ESC IN) 


India Channel Insight #37 | Escorts & Mahindra & Mahindra (Tractors)

Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

Equity Capital Markets

<ul><li>Despite continuing supply constraints, Deere managed a decent result without its margins taking too bad of a hit.</li><li>As reflected in the recent WASDE report, supply and demand factors drive up crop prices which should benefit Deere.</li><li>As a result, growers' profitability and cash flow remain strong which should give them a higher budget to spend on Deere’s offerings in the year.</li></ul>

Despite continuing supply constraints, Deere managed a decent result without its margins taking too bad of a hit.As reflected in the recent WASDE report, supply and demand factors drive up crop prices which should benefit Deere.As a result, growers' profitability and cash flow remain strong which should give them a higher budget to spend on Deere’s offerings in the year.

Deere & Company: Precision Agriculture & Other Drivers

Japan Specialist

Mark Chadwick

<ul>
<li>Kubota's stock declined in sympathy with agricultural major Deere following a quarterly earnings miss</li>
<li>Kubota faces similar supply chain and cost pressures, but it is the US housing market that is a bigger concern</li>
<li>We believe that the market is underestimating the earnings risk for Kubota should the housing market start to cool </li>
</ul>


Kubota's stock declined in sympathy with agricultural major Deere following a quarterly earnings miss
Kubota faces similar supply chain and cost pressures, but it is the US housing market that is a bigger concern
We believe that the market is underestimating the earnings risk for Kubota should the housing market start to cool 


Kubota (6326 JP) | US Housing Risk to Big to Ignore

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

iShares Russell 2000 ETF / Technical Analysis

<ul>
<li>Last week's FOMC announcement and quad witching allowed for some breadth improvement, and the S&amp;P 500, Nasdaq 100, Russell 2000, and Russell Micro Cap indexes broke above their respective downtrends.</li>
<li>While this is undoubtedly a positive, we are waiting for more confirmation. It is not uncommon to have misdirection following important FOMC meetings.</li>
<li>The Russell 2000(IWM) remains below major resistance at $209, which was support for all of 2021. This is arguably the most important resistance level in regards to the broad market.</li>
</ul>


Last week's FOMC announcement and quad witching allowed for some breadth improvement, and the S&amp;P 500, Nasdaq 100, Russell 2000, and Russell Micro Cap indexes broke above their respective downtrends.
While this is undoubtedly a positive, we are waiting for more confirmation. It is not uncommon to have misdirection following important FOMC meetings.
The Russell 2000(IWM) remains below major resistance at $209, which was support for all of 2021. This is arguably the most important resistance level in regards to the broad market.


Russell 2000 Testing Resistance; Buying Steel, Copper, Uranium, Ag Equipment Stocks

United States

Caterpillar Inc. designs, manufactures and markets construction, mining and forestry machinery. The Company also manufactures engines  and other related parts for its equipment, and offers financing and insurance. Caterpillar distributes its products through a worldwide organization of dealers.

Graco Inc. supplies technology for the management of fluids in both industrial and commercial applications.  The Company designs, manufactures, and markets systems to move, measure, control, dispense, and apply fluid materials.  Graco's products are used for applying paints and coatings, high-pressure cleaning of equipment, and lubricating and maintaining vehicles and other equipment.

Nordson Corporation designs, manufactures, and markets systems that apply adhesives, sealants, and coatings to consumer and industrial products during manufacturing operations.  The Company's products include customized electronic controls for the precise application and curing of materials to meet customers' requirements.  Nordson operates around the world.

Illinois Tool Works Inc. designs and manufactures fasteners and components, equipment and consumable systems, and a variety of specialty products and equipment.  The Company's products include industrial fluids and adhesives, tooling for specialty applications, welding products, and quality measurement equipment and systems.  Illinois Tool Works operates worldwide.

Parker-Hannifin Corporation manufactures motion control products, including fluid power systems, electromechanical controls, and related components.  The Company also produces fluid purification, fluid flow, process instrumentation, air conditioning, refrigeration, and electromagnetic shielding and thermal management products.

IDEX Corporation designs, manufactures, and markets a variety of pump products, dispensing equipment, and other engineered products.  The Company's products include industrial pumps, lubrication systems, banding and clamping devices, and rescue tools.  IDEX markets its products to customers in the United States and overseas.

Xylem, Inc. is a designer, manufacturer, equipment and service provider for water and wastewater applications addressing the full-cycle of water from collection, distribution, and use to the return of water to the environment. The Company's products include water and wastewater pumps, treatment and testing equipment, industrial pumps, valves, heat exchangers, and dispensing equipment.

Wabtec Corporation, doing business as Westinghouse Air Brake Technologies Corporation, provides technology products and services for the rail industry on a worldwide basis. The Company manufactures a range of products for locomotives, freight cars, and passenger transit vehicles. Wabtec also builds new locomotives and provides aftermarket services.

Dover Corporation manufactures industrial products and manufacturing equipments. The Company's products includes printing, identification, marking and coding systems, waste handling, industrial equipments, refrigeration systems, display cases, industrial pumps, fuel dispensers, nozzles, piping, and electronic tank gauge equipments. Dover serves customers worldwide.

Snap-on Incorporated develops, manufactures, and distributes tool and equipment solutions worldwide.  The Company's products include hand and power tools, diagnostics and shop equipment, tool storage products, diagnostics software, and other solutions for the automotive service industry.  Customers include professional service technicians and motor service shop owners, among others.

CRRC Corporation Limited manufactures rolling stock products. The Company produces locomotives, passenger carriages, freight wagons, vehicles key components, and other products. CRRC also provides vehicle repairing, investment management, and other services.

FANUC CORPORATION manufactures factory automation (FA) systems and equipments, and robots. The Company's products include computerized numerically-controlled (CNC) equipment, servo motors, laser systems, industrial robots, wire-cut electric discharge machines, and CNC drill.  Fanuc participates in a joint venture with General Electric in the FA field.

China CSSC Holdings Ltd. offers shipbuilding, ship components, ship repairing and diesel engines manufacturing. The Company distributes its products within the domestic market and to overseas markets.

China Shipbuilding Industry Company Limited designs, manufactures, sells and leases ship parts.  The Company's products include engines and parts, auxiliay engines and transportation equipment.

KOMATSU LTD. manufactures and sells construction and mining machinery, including excavators, bulldozers, and wheel loaders.  The Company, operating on a global scale, also produces forklift trucks and engineering equipment such as press system.

Weichai Power Co., Ltd. specializes in the research and development, manufacturing and sales of diesel engines. The company's products are applicable to markets such as, heavy-duty vehicles, coaches, construction machines, vessels and power generator.

KUBOTA CORPORATION manufactures industrial machinery, farm machinery, and fluid piping systems.  The Company's products include ductile iron pipes, engines, tractors, combine harvesters, reaper binders, rice planters, and excavators.  Kubota also produces forged iron products, housing equipment, and environmental control plants.

Mitsubishi Heavy Industries, Ltd. is a comprehensive heavy machinery maker. The Company manufactures machinery, ships, turbines and engines, prime movers, aircrafts, and machine parts for military and commercial use.  Mitsubishi Heavy Industries also researches and develops nuclear power plants.

Hengli Petrochemical Co.,Ltd. manufactures chemical fibers. The Company researches, produces, and sells polyester filament and chips for consumer and industry products. Hengli Petrochemical markets it products worldwide.

Hengli Petrochemical Co.,Ltd. A (600346 CH)

Shenzhen Inovance Technology Co., Ltd. develops, manufactures and sells automate control products.  The Company's products include low frequency converter, servo drive, and programmable logic controller (PLC).

Shenzhen Inovance Technology Co., (300124 CH)

Deere & Company manufactures and distributes a range of agricultural, construction and forestry, and commercial and consumer equipment.  The Company supplies replacement parts for its own products and for those of other manufacturers. Deere also provides product and parts financing services. Deere and Company extends its services and products worldwide.

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Deere & Co (DE US)

Escorts Ltd (ESC IN) | Expected to Grow Slower than Industry

The tractor industry is poised well for a recovery. However, we believe Escorts Ltd (ESC IN)'s product issues will lead to its growth being slower...

Pranav Bhavsar

India Channel Insight #37 | Escorts & Mahindra & Mahindra (Tractors)

There is optimism among tractor dealers with regards to TIVs, but not all players are equal. Escorts Ltd (ESC IN)'s dealers are complaining about...

Pranav Bhavsar

Deere & Company: Precision Agriculture & Other Drivers

Despite continuing supply constraints, Deere managed a decent result without its margins taking too bad of a hit. As reflected in the recent WASDE...

Baptista Research

Kubota (6326 JP) | US Housing Risk to Big to Ignore

Supply chain and cost pressures abound, but it is the risk around a cooling US housing market concerns us the most. We think the stock could...

Mark Chadwick

Russell 2000 Testing Resistance; Buying Steel, Copper, Uranium, Ag Equipment Stocks

The Russell 2000 $IWM remains below major resistance at $209, which was support for all of 2021. This is arguably the most important resistance...

Vermilion Research

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