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

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<li>We speak to channels across West, North and South to understand the 2W demand environment </li>
<li>Mid segment is still not seeing recovery, premium and lower end segment is stabilising / doing relatively better. </li>
<li>Restoration of supplies and aggressive marketing strategies can aid volume recovery for <a href="https://www.smartkarma.com/entities/tvs-motor-co-ltd" target="_blank" data-smartkarma-citation="entities:16123:1" rel="noopener">TVS Motor (TVSL IN)</a> and <a href="https://www.smartkarma.com/entities/eicher-motors-ltd" target="_blank" data-smartkarma-citation="entities:18316:1" rel="noopener">Eicher Motors (EIM IN)</a> </li>
</ul>


We speak to channels across West, North and South to understand the 2W demand environment 
Mid segment is still not seeing recovery, premium and lower end segment is stabilising / doing relatively better. 
Restoration of supplies and aggressive marketing strategies can aid volume recovery for TVS Motor (TVSL IN) and Eicher Motors (EIM IN) 


India Channel Insight #34 | Eicher (Royal Enfield), TVS Motors, Hero MotoCorp

External broker reports(aggregated public sources), Nirmal Bang

Nirmal Bang

External broker reports(aggregated public sources)

A Relationship Beyond Broking

Nirmal Bang, one of the leading stock broking companies in India, caters to retail and institutional clients by offering them a range of financial products and services, including equities, derivatives, commodities, currency derivatives, mutual funds, IPOs, insurance, depository services and PMS.

Nirmal Bang is drawn from a diversity of professional backgrounds, and blend of experience, skill and dedication is shared with its clients. Nirmal Bang emphasizes adequate, thorough research local and world-wide developments, balancing these with the astute discovery of intrinsic values, synergies and growth. The aim is simply to help the investors to maximize their returns.

<div><div><div><div><ul><li>Revenue and margins in line - displaying good improvement: Standalone revenue came in at Rs31.9bn, up ~9% YoY, which was in line with our estimate, led by ASP growth and an optimum product mix.</li></ul><div><div><div><div><ul><li>Valuation turns favorable: We value RE (standalone) at 24x FY24E EPS and VECV at 12x EV/EBITDA on FY24E to arrive at a TP of Rs2,939.</li></ul><div><div><div><div><ul><li>We expect demand to remain strong and drive volume growth going ahead in both domestic as well as export markets, leading to 21% volume growth.</li></ul></div></div></div></div></div></div></div></div></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>

Revenue and margins in line - displaying good improvement: Standalone revenue came in at Rs31.9bn, up ~9% YoY, which was in line with our estimate, led by ASP growth and an optimum product mix.Valuation turns favorable: We value RE (standalone) at 24x FY24E EPS and VECV at 12x EV/EBITDA on FY24E to arrive at a TP of Rs2,939.We expect demand to remain strong and drive volume growth going ahead in both domestic as well as export markets, leading to 21% volume growth.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.

Eicher Motors - New Launches and Exports to Drive Volume Growth; BUY

External broker reports(aggregated public sources), HDFC Securities

HDFC Securities

HDFC securities is the best online trading platform for stocks, IPOs, mutual fund 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.

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<li>Tech Mahindra: With in-line revenue growth of +5.3% QoQ CC (organic ~2.2%), healthy net new deal wins (FY22 +48% YoY) lending growth visibility, and valuation reverting to its historical average, we maintain ADD on Tech Mahindra (TECHM).</li>
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<li>Eicher Motors: Royal Enfield posted better-than-expected margin in Q4 (up 310bps QoQ), led by improved volumes and better mix.</li>
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<li>Emami: Emami posted a slight beat on revenue and in-line EBITDA growth.</li>
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<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>





Tech Mahindra: With in-line revenue growth of +5.3% QoQ CC (organic ~2.2%), healthy net new deal wins (FY22 +48% YoY) lending growth visibility, and valuation reverting to its historical average, we maintain ADD on Tech Mahindra (TECHM).





Eicher Motors: Royal Enfield posted better-than-expected margin in Q4 (up 310bps QoQ), led by improved volumes and better mix.





Emami: Emami posted a slight beat on revenue and in-line EBITDA growth.










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: Tech Mahindra, Eicher Motors, Emami, CreditAccess Grameen, Brigade Enterprises

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 are past the halfway mark in the review period of the <a href="https://www.smartkarma.com/entities/nifty-index" target="_blank" data-smartkarma-citation="entities:23617:1" rel="noopener">NIFTY Index (NIFTY INDEX)</a> September rebalance. We see one potential change which should be announced end August.</li>
<li>There is a high probability of <a href="https://www.smartkarma.com/entities/adani-enterprises-ltd" target="_blank" data-smartkarma-citation="entities:245:1" rel="noopener">Adani Enterprises (ADE IN)</a> being included in the index, while either <a href="https://www.smartkarma.com/entities/shree-cement-ltd" target="_blank" data-smartkarma-citation="entities:10531:1" rel="noopener">Shree Cement (SRCM IN)</a> or <a href="https://www.smartkarma.com/entities/hero-motocorp-ltd" target="_blank" data-smartkarma-citation="entities:2391:1" rel="noopener">Hero Motocorp (HMCL IN)</a> will be deleted.</li>
<li>The impact of passive fund trading on the stocks is high in terms of days of ADV, but very high in terms of delivery volume.</li>
</ul>


We are past the halfway mark in the review period of the NIFTY Index (NIFTY INDEX) September rebalance. We see one potential change which should be announced end August.
There is a high probability of Adani Enterprises (ADE IN) being included in the index, while either Shree Cement (SRCM IN) or Hero Motocorp (HMCL IN) will be deleted.
The impact of passive fund trading on the stocks is high in terms of days of ADV, but very high in terms of delivery volume.


NIFTY50 Index Rebalance Preview: High Probability Add; Impact Higher than the Headline Numbers

Thematic (Sector/Industry)

<div><div><div><div><ul><li>PVs – supply chain constraints to persist; demand holding strong: We expect PV volume to be slightly lower on MoM basis due to supply<br>side issues and higher monthly base.</li></ul><div><div><div><ul><li>2Ws – demand revival remains muted: Domestic 2W dispatches are expected to improve on MoM basis, albeit at a slower pace, led by opening up of schools &amp; offices, beginning of marriage season and improving rural economics.</li></ul><div><div><div><div><ul><li>Tractors – moderating growth on a high base: We expect tractor demand to ease due to a high base.</li></ul></div></div></div></div></div></div></div></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>

PVs – supply chain constraints to persist; demand holding strong: We expect PV volume to be slightly lower on MoM basis due to supply side issues and higher monthly base.2Ws – demand revival remains muted: Domestic 2W dispatches are expected to improve on MoM basis, albeit at a slower pace, led by opening up of schools &amp; offices, beginning of marriage season and improving rural economics.Tractors – moderating growth on a high base: We expect tractor demand to ease due to a high base.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.

Automobile Sales Estimates – 2Ws Rising from Dust; Demand Outlook for PVs and CVs Positive

India

Hero MotoCorp Ltd. designs, manufactures and distributes motorcycles. The Company's products also include motorcycle parts and accessories.

TVS Motor Company Limited manufactures motorcycles, mopeds, and scooters. The Company provides spark ignition operated outboard motors, combustion spark ignition engines, critical engines, and transmission parts. TVS Motor Company serves customers in India.

Maharashtra Scooters Ltd. manufactures and distributes two-wheeler scooters.

Tata Motors Limited manufactures cars and commercial automotive vehicles in India. The Company designs, manufactures and sells heavy commercial, medium commercial and small commercial vehicles including trucks, tankers, vans, buses, ambulances and minibuses. Tata also manufactures small cars and sports utility vehicles.

Bajaj Auto Limited manufactures and distributes motorized two-wheeled and three-wheeled scooters, motorcycles and mopeds.

Atul Auto Ltd. manufactures three-wheeled commercial diesel vehicles.

MRF Limited manufactures and distributes tyres and tubes for automobiles, aircrafts, motorcycles and cycles. The Company also manufactures conveyor belts, paint and coats, and hoses. Every MRF tyre designed is the result of a special acid test on the race and rally tracks.

Bosch Limited manufactures a wide range of automotive parts. The Company'products includes fuel injection pumps, spark plugs, including nozzles and nozzle holders, elements, delivery valves, filters and filter inserts, glow plugs, starter motors, alternators and wipers. Bosch also manufactures hydraulics and pneumatic equipment and electric power tools and fixtures.

Hindustan Motors Limited manufactures cars, trucks, diesel engines, bulldozers, cranes, dumpers, compactors, shovels and scrapers. The Company also manufactures a wide range of steel products, axle assemblies, special purpose machine tools, hydraulic pumps and hydraulic valves.

Bharat Forge Limited manufactures steel forgings and machined components for the automotive, diesel engine, railway, earthmoving, cement, sugar, steel, coal, ship building and oilfield industries. The Company specializes in Closed Die as well as Open Die Forgings.

PT Astra International Tbk assembles and distributes automobiles, motorcycles, and their related spare parts.  Through its subsidiaries, the Company also operates in the mining, development of plantations, financial and information technology.

NISSAN MOTOR CO., LTD. manufactures and distributes automobiles and related parts. It also provides financing services. Nissan delivers a comprehensive range of products under various brands. The Company manufactures in Japan, the United States, Mexico, the United Kingdom and many other countries.

Geely Automobile Holdings Limited operates as a passenger vehicles manufacturing company. The Company provides passenger vehicles development, manufacturing, sales, and other services. Geely Automobile Holdings also exports passenger vehicles.

Great Wall Motor Company Limited, through its subsidiaries, manufactures and sells pick-up trucks and sport-utility vehicles (SUVs) in China under branded names. The Company also researches and develops, and manufactures principal automotive parts and components for use in the assembly of pick-up trucks and SUVs.

Suzuki Motor Corporation manufactures automobiles, motorcycles, and their related parts. The Company has production facilities in USA, Japan, Taiwan, India, Pakistan, Indonesia, Thailand, and Hungary.

Subaru Corp manufactures passenger cars, buses, motor vehicle parts, and industrial machinery.  The Company also produces aircraft parts and supplies it to defense agency and Boeing Co.  The Company sells its passenger cars under the Subaru brand name.

Yamaha Motor Co., Ltd. manufactures motorcycles.  The Company also produces motor vehicle engines for Toyota Motor Corp. and Ford Motor Co.  Yamaha Motor's specialty products include motor boats, snowmobiles, golf carts, and electric power generators.  Yamaha Motor sells products in Japan, North America, Europe, Asia, and South America.

BAIC BluePark New Energy Technology Co.,Ltd. operates as a passenger car manufacturer. The Company engages in research, development, and marketing of new energy vehicles and power battery system. BAIC BluePark New Energy Technology conducts businesses in China.

BAIC BluePark New Energy Techn (600733 CH)

Guangzhou Automobile Group Company, Ltd. manufactures, sells, and services automobiles. The Company is also involved in automobile parts and components, and auto finance and related services for both overseas and domestic markets.

Chongqing Changan Automobile Company Limited develops, manufactures, and markets mini cars, mini sedans, full size sedans, and engines.

Chongqing Changan Automobile Company (200625 CH)

Eicher Motors Ltd. manufactures light commercial vehicles which are sold domestically and are also exported to other countries. Eicher Motors also manufactures two-wheelers and automotive gears.

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Eicher Motors (EIM IN)

India Channel Insight #34 | Eicher (Royal Enfield), TVS Motors, Hero MotoCorp

For this weekly publication, we speak to Auto channels across the West, North and South to understand the 2W demand environment and competitive...

Pranav Bhavsar

Eicher Motors - New Launches and Exports to Drive Volume Growth; BUY

Eicher Motors’ 4QFY22 standalone revenue came in line with our expectation, led by 4% increase in ASP sequentially due to price hike and a better...

Nirmal Bang

HSIE Results Daily: Tech Mahindra, Eicher Motors, Emami, CreditAccess Grameen, Brigade Enterprises

Tech Mahindra: With in-line revenue growth of +5.3% QoQ CC (organic ~2.2%), healthy net new deal wins (FY22 +48% YoY) lending growth visibility

HDFC Securities

NIFTY50 Index Rebalance Preview: High Probability Add; Impact Higher than the Headline Numbers

Adani Enterprises is a high probability add to the NIFTY50 in Sep. Shree Cement is the current delete, though Hero Motocorp is close. There will be...

Brian Freitas

Automobile Sales Estimates – 2Ws Rising from Dust; Demand Outlook for PVs and CVs Positive

Based on our channel checks, we saw some improvement in 2W demand in April’22 while demand in CV and PV segments continued to remain robust.

Nirmal Bang

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