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

In this insight we present key takeaways from our interaction with a Hero Motocorp sales manager based in southern India with more than 20 years of experience. Having been in the industry for two decades, he possesses a thorough, in depth knowledge of the two wheeler industry in India and its competitive factors.

In this insight we present key takeaways from our interaction with a Hero Motocorp sales manager based in southern India with more than 20 years of experience. Having been in the industry for two decades, he possesses a thorough, in depth knowledge of the two wheeler industry in India and its competitive factors. 

Hero Motocorp (HMCL IN) | Channel Interactions Point to a Wide Disconnect

Equity L/S Analyst | Forensic Accounting | India, Yellowstone Equity

Ankit Agrawal, CFA

Equity L/S Analyst | Forensic Accounting | India

<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> announced its Q3FY21 earnings yesterday. It reported highest ever quarterly revenue. Key positive surprises were market share gain in the export market (90bp gain) and 25%+ growth in the spare parts business. Hero Motocorp also did well in the domestic market with 190bp market share gain. This coupled with low base effect helped Hero Motocorp post strong earnings. Revenues grew 40% YoY, EBITDA grew 36% YoY while PAT grew 23% YoY (losses at couple of associates tapered down the PAT growth). EBITDA margins at 14.5% came in within the medium-term guidance of 14-16% range.

Hero Motocorp (HMCL IN) announced its Q3FY21 earnings yesterday. It reported highest ever quarterly revenue. Key positive surprises were market share gain in the export market (90bp gain) and 25%+ growth in the spare parts business. Hero Motocorp also did well in the domestic market with 190bp market share gain. This coupled with low base effect helped Hero Motocorp post strong earnings. Revenues grew 40% YoY, EBITDA grew 36% YoY while PAT grew 23% YoY (losses at couple of associates tapered down the PAT growth). EBITDA margins at 14.5% came in within the medium-term guidance of 14-16% range.

Hero Motocorp Q3FY21 Earnings - Highest Ever Quarterly Revenue

Indian Accounting Research Analyst, Trudence Capital Advisors

Nitin Mangal

Indian Accounting Research Analyst

In our earlier extensive insight, <a href="https://www.smartkarma.com/insights/mahindra-and-mahindra-deceleration-accelerates-plateau-ahead" target="_blank" data-smartkarma-citation="insights:15530" rel="noopener">Mahindra and Mahindra: Deceleration Accelerates, Plateau Ahead</a> we spoke about how <a href="https://www.smartkarma.com/entities/mahindra-mahindra-ltd" target="_blank" data-smartkarma-citation="entities:16441:1" rel="noopener">Mahindra &amp; Mahindra (MM IN)</a> had lost its mojo in the Indian auto industry, after having a purple patch till early 2010s. We highlighted severe operational, strategic and financial concerns that plagued the company, and that it will continue to underperform the Auto sector post 2017.
M&amp;M has struggled to cope up with its historic prowess in the sector, and has been a victim to market share and momentum loss in several segments (Standalone basis). 
The company has also announced a reshuffle of its leadership back in Dec 2019, and consequently has undergone several strategic business changes ranging from exit of investments to new tie ups. As a result, there has been a lot of optimism in the market about a more than average possibility of a revival, and that M&amp;M will regain the fortress back.
However on the contrary, looking at the dismal recent-past track record of the company, it is a herculean task for the management to turn around and so these decisions must be watched closely in the medium to long run before jumping on to the conclusions.

In our earlier extensive insight, Mahindra and Mahindra: Deceleration Accelerates, Plateau Ahead we spoke about how Mahindra &amp; Mahindra (MM IN) had lost its mojo in the Indian auto industry, after having a purple patch till early 2010s. We highlighted severe operational, strategic and financial concerns that plagued the company, and that it will continue to underperform the Auto sector post 2017.
M&amp;M has struggled to cope up with its historic prowess in the sector, and has been a victim to market share and momentum loss in several segments (Standalone basis). 
The company has also announced a reshuffle of its leadership back in Dec 2019, and consequently has undergone several strategic business changes ranging from exit of investments to new tie ups. As a result, there has been a lot of optimism in the market about a more than average possibility of a revival, and that M&amp;M will regain the fortress back.
However on the contrary, looking at the dismal recent-past track record of the company, it is a herculean task for the management to turn around and so these decisions must be watched closely in the medium to long run before jumping on to the conclusions.

Mahindra and Mahindra: Refurbished but Still Fragile

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

In our October 1 Int’l Compass we highlighted our belief that the lows were in place for this recent correction and that, combined with mostly healthy market dynamics, a bullish outlook is appropriate if the MSCI ACWI (ACWI-US) is above $77 support and, if the MSCI EM (EEM-US) is above $42.30 support. These indexes and market dynamics have only improved since October 1. As a result, our outlook remains bullish and we continue to believe that the path of least resistance is higher for global equities. Below we summarize the basis for our bullish outlook. Open the attached file to read our complete International Strategy document, and to find links to detailed comments and recommendations for each of our 12 Sectors.

In our October 1 Int’l Compass we highlighted our belief that the lows were in place for this recent correction and that, combined with mostly healthy market dynamics, a bullish outlook is appropriate if the MSCI ACWI (ACWI-US) is above $77 support and, if the MSCI EM (EEM-US) is above $42.30 support. These indexes and market dynamics have only improved since October 1. As a result, our outlook remains bullish and we continue to believe that the path of least resistance is higher for global equities. Below we summarize the basis for our bullish outlook. Open the attached file to read our complete International Strategy document, and to find links to detailed comments and recommendations for each of our 12 Sectors.

Global Equity Strategy: Bullish Outlook Intact

Key $70 support on the MSCI ACWI (ACWI-US) held strong last week, and ACWI-US is now inflecting topside its bullish falling wedge pattern. This bullish price action combined with market dynamics which remain mostly healthy lead us to believe the lows of this recent correction are in. Consumer Discretionary and Manufacturing Sectors continue to be two attractive Sectors that are outperforming globally; we highlight numerous actionable names in today's report.

Key $70 support on the MSCI ACWI (ACWI-US) held strong last week, and ACWI-US is now inflecting topside its bullish falling wedge pattern. This bullish price action combined with market dynamics which remain mostly healthy lead us to believe the lows of this recent correction are in. Consumer Discretionary and Manufacturing Sectors continue to be two attractive Sectors that are outperforming globally; we highlight numerous actionable names in today's report.

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)