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

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>Operationally in-line results: Hero Moto reported revenue of Rs74.2bn, which was in line with our estimate. ASP stood at Rs62.4k/vehicle.</li></ul><div><div><div><div><ul><li>Attractive valuation amid 2W recovery and EV opportunity: We value Hero Moto at 15x FY24E EPS and assign Hero Fincorp/Ather Rs96/Rs200 per share value to arrive at a TP of Rs3,161.</li></ul><div><div><div><div><ul><li>We are baking in EPS AGR of 26% over FY22-24E, led by 14% CAGR growth in volume and 150bps margin expansion.</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>

Operationally in-line results: Hero Moto reported revenue of Rs74.2bn, which was in line with our estimate. ASP stood at Rs62.4k/vehicle.Attractive valuation amid 2W recovery and EV opportunity: We value Hero Moto at 15x FY24E EPS and assign Hero Fincorp/Ather Rs96/Rs200 per share value to arrive at a TP of Rs3,161.We are baking in EPS AGR of 26% over FY22-24E, led by 14% CAGR growth in volume and 150bps margin expansion.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.

Hero MotoCorp - Attractive Valuation, 2W Upcycle & EV Transition to Drive Rerating

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)