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>We anticipate the uptick in retail primarily aided by the wedding season to be short-lived for <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>. </li>
<li>HMCL has not been able to keep pace with changing consumer preferences, the limited success in premium segment and scooters is likely to remain an overhang even on new launches.  </li>
<li>Inventory correction at the dealer's end could aid wholesales supporting valuations, but the company remains structurally unattractive. </li>
</ul>


We anticipate the uptick in retail primarily aided by the wedding season to be short-lived for Hero Motocorp (HMCL IN). 
HMCL has not been able to keep pace with changing consumer preferences, the limited success in premium segment and scooters is likely to remain an overhang even on new launches.  
Inventory correction at the dealer's end could aid wholesales supporting valuations, but the company remains structurally unattractive. 


Hero Motocorp (HMCL IN) | Structural Problems Persist

<ul>
<li>
<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> is well-positioned to offset margin pressures due to its aspirational brand, the success of its new models and exports. </li>
<li>Easing supply issues along with newer export markets provide a compelling runway for revenue growth. </li>
<li>While our estimates are in line with consensus,  we believe the YTD outperformance is likely to continue and any opportunities presented amidst market volatility must be exploited. </li>
</ul>



Eicher Motors (EIM IN) is well-positioned to offset margin pressures due to its aspirational brand, the success of its new models and exports. 
Easing supply issues along with newer export markets provide a compelling runway for revenue growth. 
While our estimates are in line with consensus,  we believe the YTD outperformance is likely to continue and any opportunities presented amidst market volatility must be exploited. 


Eicher Motors (EIM IN) | The "Twins" (New Models & Exports) Are Firing

<ul>
<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

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)

<ul>
<li>This insight provides select Industry-wise highlights from the 59 checks, across 5 sectors and 14 industries that we did in Q4 (Jan 2022 to March 2022).</li>
<li>The objective of the checks is to understand the underlying business narrative not to forecast the coming quarter and hence the limited sample sizes. </li>
<li>These checks are used as a tool to identify areas of discrepancy between management commentary and ground reality that could be the subject of future deeper dives. </li>
</ul>


This insight provides select Industry-wise highlights from the 59 checks, across 5 sectors and 14 industries that we did in Q4 (Jan 2022 to March 2022).
The objective of the checks is to understand the underlying business narrative not to forecast the coming quarter and hence the limited sample sizes. 
These checks are used as a tool to identify areas of discrepancy between management commentary and ground reality that could be the subject of future deeper dives. 


India Channel Insight | Q4 Report Card | 59 Checks Across 5 Sectors

India

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

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Hero Motocorp (HMCL IN)