External broker reports(aggregated public sources), HDFC Securities

HDFC Securities

External broker reports(aggregated public sources)

Equity Bottom-Up

<p>Nippon Life India Asset Management: Revenue was 3.1% below the estimate as a consequence of pressure on revenue yields. NAM has been able to stabilise its market share in the high-margin equity segment at 7% over the past two quarters. We expect it to focus on improving performance to continue recouping its lost market share. Additionally, we expect the company to benefit from increased credibility to raise HNI/institutional capital. Driven by cost optimisation, we expect NAM to deliver an FY21-23E revenue/NOPLAT CAGRs of 15.5/24%.</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>

Nippon Life India Asset Management: Revenue was 3.1% below the estimate as a consequence of pressure on revenue yields. NAM has been able to stabilise its market share in the high-margin equity segment at 7% over the past two quarters. We expect it to focus on improving performance to continue recouping its lost market share. Additionally, we expect the company to benefit from increased credibility to raise HNI/institutional capital. Driven by cost optimisation, we expect NAM to deliver an FY21-23E revenue/NOPLAT CAGRs of 15.5/24%.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: HCL Technologies, ACC, Nippon Life India Asset Management, PSP Projects

External broker reports(aggregated public sources), Motilal Oswal Financial Services Limited

Motilal Oswal

<p>HCLT delivered a growth of 0.7% QoQ (CC), below our estimate of 2.4%, led by weak growth in IT Services (+0.5%) and Products &amp; Platforms (-1%), but partially compensated by better than expected ER&amp;D; (+4.5%). Excluding the impact of a one-time bonus in 4QFY21, EBIT margin was down 80bp QoQ and missed our estimate by 130bp due to COVID-related expenses of 90bp. The management reiterated its double-digit USD revenue growth guidance and EBIT margin band of 19-21% for FY22.</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>

HCLT delivered a growth of 0.7% QoQ (CC), below our estimate of 2.4%, led by weak growth in IT Services (+0.5%) and Products &amp; Platforms (-1%), but partially compensated by better than expected ER&amp;D; (+4.5%). Excluding the impact of a one-time bonus in 4QFY21, EBIT margin was down 80bp QoQ and missed our estimate by 130bp due to COVID-related expenses of 90bp. The management reiterated its double-digit USD revenue growth guidance and EBIT margin band of 19-21% for FY22.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.

Growth optionality at attractive valuation

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Nomura Research Institute / Equity Bottom-Up

<p>On 21 June 2021, <a href="https://www.smartkarma.com/entities/nomura-research-institute-ltd" target="_blank" data-smartkarma-citation="entities:18129:1" rel="noopener">Nomura Research Institute Ltd (4307 JP)</a> announced (<a href="https://ir.nri.com/jp/ir/news/auto_20210621452515/pdfFile.pdf" target="_blank" rel="noopener">link</a>) a buyback program of up to 20,000,000 shares (3.30% of shares out) spending up to ¥60 billion, with the program running from 22 June 2021 to 30 December 2021, with possible buying on market and on ToSTNeT-3, but excluding dates in the 10 days around the day after the quarterly results announcements. </p><p>The company ALSO announced a ToSTNeT-3 buyback tomorrow morning for up to 16,925,200 shares at today's closing price of ¥3,545/share. </p><p>That 16.925mm shares at that price = ¥59,999,834,000 so one can assume that if the ToSTNeT-3 buyback is completed to the full extent, that will mean the buyback program will be done tomorrow before the market opens.</p><p>The announcement suggested that <a href="https://www.smartkarma.com/entities/nomura-holdings-inc" target="_blank" data-smartkarma-citation="entities:742:1" rel="noopener">Nomura Holdings (8604 JP)</a> intended to sell as many as 14.105 million shares in the buyback leaving 2.815mm shares for other holders if they want to sell Monday's close. </p><p>But I remind readers that a) short selling is allowed, and b) it is entirely <em>pro rata</em> (with some niggling little procedural exceptions) so if people stepped in to sell, they would probably get a decent portion of their offer sold at that price. </p><p>More below the fold. </p>

On 21 June 2021, Nomura Research Institute Ltd (4307 JP) announced (link) a buyback program of up to 20,000,000 shares (3.30% of shares out) spending up to ¥60 billion, with the program running from 22 June 2021 to 30 December 2021, with possible buying on market and on ToSTNeT-3, but excluding dates in the 10 days around the day after the quarterly results announcements. The company ALSO announced a ToSTNeT-3 buyback tomorrow morning for up to 16,925,200 shares at today's closing price of ¥3,545/share. That 16.925mm shares at that price = ¥59,999,834,000 so one can assume that if the ToSTNeT-3 buyback is completed to the full extent, that will mean the buyback program will be done tomorrow before the market opens.The announcement suggested that Nomura Holdings (8604 JP) intended to sell as many as 14.105 million shares in the buyback leaving 2.815mm shares for other holders if they want to sell Monday's close. But I remind readers that a) short selling is allowed, and b) it is entirely pro rata (with some niggling little procedural exceptions) so if people stepped in to sell, they would probably get a decent portion of their offer sold at that price. More below the fold. 

Nomura Research Institute ToSTNeT-3 Buyback

Global Emerging Market Equities, Propitious Research

Wium Malan, CFA

Global Emerging Market Equities

Independent, Fundamental Quantitative Research

Propitious Research

Fully independent, fundamental and quantitative equity research, focused on companies in the Telecommunication, Media, Technology, Internet and Healthcare sectors in the Global Emerging Markets. Idea generation focused on Quality stocks, trading below their intrinsic Value, with sound Corporate Governance.

Thematic (Sector/Industry)

<p>The Indian IT Service companies all expect double-digit top-line growth for FY2022 (to end March 2022), which is a significant acceleration from what they have delivered over the past 5+ years, but very achievable due to the low base set during the onset of the COVID-19 pandemic in FY2021. </p>
<p>With all these companies currently trading at historically peak valuation levels, the key controversy on these stocks is whether this is still the early stages of a 3-5yr heightened growth period and whether this has already been priced in. </p>
<p>With the Indian IT Services sector set to record exceptional growth acceleration, at least for the early part of the coming financial year, in this insight, I analyse whether a multi-year hyper-growth scenario is already priced in, by looking at earnings forecasts, relative valuation levels, and implied future growth rates.</p>

The Indian IT Service companies all expect double-digit top-line growth for FY2022 (to end March 2022), which is a significant acceleration from what they have delivered over the past 5+ years, but very achievable due to the low base set during the onset of the COVID-19 pandemic in FY2021. 
With all these companies currently trading at historically peak valuation levels, the key controversy on these stocks is whether this is still the early stages of a 3-5yr heightened growth period and whether this has already been priced in. 
With the Indian IT Services sector set to record exceptional growth acceleration, at least for the early part of the coming financial year, in this insight, I analyse whether a multi-year hyper-growth scenario is already priced in, by looking at earnings forecasts, relative valuation levels, and implied future growth rates.

Indian IT Services: Is a Multi-Year Hyper-Growth Scenario Priced In?

Smartkarma Research Team, Smartkarma

Smartkarma Research

Smartkarma Research Team

Smartkarma

Smartkarma unites the fragmented investment industry, connecting institutional investors, independent research providers, and corporates within a single network.

Research Reinvented

<p>On our next webinar, we're happy to welcome back Insight Provider <a href="https://www.smartkarma.com/profiles/wium-malan-cfa" target="_blank" data-smartkarma-citation="accounts:9615" rel="noopener">Wium Malan, CFA</a> who will share an updated view on key IT services companies in India. The webinar will cover <a href="https://www.smartkarma.com/entities/tata-consultancy-svcs-ltd" target="_blank" data-smartkarma-citation="entities:18708:1" rel="noopener">Tata Consultancy Svcs (TCS IN)</a>, <a href="https://www.smartkarma.com/entities/infosys-ltd" target="_blank" data-smartkarma-citation="entities:267:1" rel="noopener">Infosys Ltd (INFO IN)</a>, <a href="https://www.smartkarma.com/entities/wipro-ltd" target="_blank" data-smartkarma-citation="entities:15360:1" rel="noopener">Wipro Ltd (WPRO IN)</a>, and <a href="https://www.smartkarma.com/entities/hcl-technologies-ltd" target="_blank" data-smartkarma-citation="entities:20025:1" rel="noopener">Hcl Technologies (HCLT IN)</a>, as Indian IT services companies expect significant growth in FY2022 - albeit off a low base. Is this the start of a hyper-growth period, and has this already been priced into their lofty valuations?</p>
<h3>The webinar will be hosted on Wednesday, 12 May 2021, 17:00 SGT/HKT.</h3>
<div class="content-highlight">
<h2><a href="https://share.hsforms.com/1H9pFZOB-RF2J00kbvMmxcw2c5gj?zoom_webinar_id=85689024246" target="_blank" rel="noopener">Register for the Webinar here</a></h2>
</div>
<p>Wium Malan is a Global Equity Analyst with 13+ years of experience on the Buy-side covering companies in Emerging and Developed markets. He specialises in Fundamental and Quantitative analysis on companies in the Internet, Telecommunication, Media, Technology, IT Services, Healthcare, Pharmaceutical, and other Industrial sectors.</p>

On our next webinar, we're happy to welcome back Insight Provider Wium Malan, CFA who will share an updated view on key IT services companies in India. The webinar will cover Tata Consultancy Svcs (TCS IN), Infosys Ltd (INFO IN), Wipro Ltd (WPRO IN), and Hcl Technologies (HCLT IN), as Indian IT services companies expect significant growth in FY2022 - albeit off a low base. Is this the start of a hyper-growth period, and has this already been priced into their lofty valuations?
The webinar will be hosted on Wednesday, 12 May 2021, 17:00 SGT/HKT.

Register for the Webinar here

Wium Malan is a Global Equity Analyst with 13+ years of experience on the Buy-side covering companies in Emerging and Developed markets. He specialises in Fundamental and Quantitative analysis on companies in the Internet, Telecommunication, Media, Technology, IT Services, Healthcare, Pharmaceutical, and other Industrial sectors.

Smartkarma Webinar | Indian IT Services: Picks and Pans

India

HCL Technologies Limited provides software development and related engineering services.  The Group's technologies utilize a variety of technologies, including Internet and e-commerce, networking, internet telephony, embedded software, ASIC/VLSI design and testing, satellite and wireless communications, and component based object technologies, including COM, DCOM and COBRA.

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HCL Technologies (HCLT IN)

HSIE Results Daily: HCL Technologies, ACC, Nippon Life India Asset Management, PSP Projects

Nippon Life India Asset Management: Revenue was 3.1% below the estimate as a consequence of pressure on revenue yields. NAM has been able to...

HDFC Securities

Growth optionality at attractive valuation

HCLT delivered a growth of 0.7% QoQ (CC), below our estimate of 2.4%, led by weak growth in IT Services (+0.5%) and Products & Platforms (-1%), but...

Motilal Oswal

Nomura Research Institute ToSTNeT-3 Buyback

NRI is one of the higher-multiple (forward consensus EV/EBIT or EV/EBITDA) Japanese IT service companies. There is a PRE-OPEN ToSTNeT-3 buyback...

Travis Lundy

Indian IT Services: Is a Multi-Year Hyper-Growth Scenario Priced In?

With the Indian IT Services sector set to record exceptional growth acceleration, in this insight, I analyse whether a multi-year hyper-growth...

Wium Malan, CFA

Smartkarma Webinar | Indian IT Services: Picks and Pans

On 12 May, 5pm SGT, join us as we welcome back Wium Malan, who will share an updated view on key IT services companies in India like Tata...

Smartkarma Research

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

HSIE Results Daily: HCL Technologies, ACC, Nippon Life India Asset Management, PSP Projects

Nippon Life India Asset Management: Revenue was 3.1% below the estimate as a consequence of pressure on revenue yields. NAM has been able to...

HDFC Securities

Growth optionality at attractive valuation

HCLT delivered a growth of 0.7% QoQ (CC), below our estimate of 2.4%, led by weak growth in IT Services (+0.5%) and Products & Platforms (-1%), but...

Motilal Oswal

Nomura Research Institute ToSTNeT-3 Buyback

NRI is one of the higher-multiple (forward consensus EV/EBIT or EV/EBITDA) Japanese IT service companies. There is a *PRE-OPEN* ToSTNeT-3 buyback...

Travis Lundy

Indian IT Services: Is a Multi-Year Hyper-Growth Scenario Priced In?

With the Indian IT Services sector set to record exceptional growth acceleration, in this insight, I analyse whether a multi-year hyper-growth...

Wium Malan, CFA

Smartkarma Webinar | Indian IT Services: Picks and Pans

On 12 May, 5pm SGT, join us as we welcome back Wium Malan, who will share an updated view on key IT services companies in India like Tata...

Smartkarma Research

NRI is one of the higher-multiple (forward consensus EV/EBIT or EV/EBITDA) Japanese IT service companies. There is a PRE-OPEN ToSTNeT-3 buyback...