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.

Equity Bottom-Up

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<li>Some metrics worth tracking: As indicated in our 4QFY22 results note (Downgrade cycle upon us), the net new TCV number (down 60% YoY in FY22 due to mega-deals in the base year) and the unbilled revenue growth were some of the things that stood out.</li>
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<li>Things to watch out for in the coming days: (1) Whether the worsening profit picture of the US corporate sector – earlier than expected in the March quarter 2022 in certain consumer-facing sectors - spreads further (2) Whether those to whom offer letters are/were given are on-boarded as indicated (3) Whether hiring materially weakens from here on by the Indian service providers, especially if utilization is high (4) Will there be an upward revision in the guidance if we see a strong QoQ growth in 1HFY23 (5) Order inflow and commentary by Accenture as it releases its results in the latter half of June 2022; especially surrounding the discretionary spending on consulting.</li>
<li>We expect no deterioration as of this point. (6) Commentary on demand from the cloud hyper scalers and the Saas eco-system in the US (7) A stricter implementation of work from office rules – meaning companies are open to living with higher attrition as they see weakness in demand into the future.</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>






Some metrics worth tracking: As indicated in our 4QFY22 results note (Downgrade cycle upon us), the net new TCV number (down 60% YoY in FY22 due to mega-deals in the base year) and the unbilled revenue growth were some of the things that stood out.






Things to watch out for in the coming days: (1) Whether the worsening profit picture of the US corporate sector – earlier than expected in the March quarter 2022 in certain consumer-facing sectors - spreads further (2) Whether those to whom offer letters are/were given are on-boarded as indicated (3) Whether hiring materially weakens from here on by the Indian service providers, especially if utilization is high (4) Will there be an upward revision in the guidance if we see a strong QoQ growth in 1HFY23 (5) Order inflow and commentary by Accenture as it releases its results in the latter half of June 2022; especially surrounding the discretionary spending on consulting.
We expect no deterioration as of this point. (6) Commentary on demand from the cloud hyper scalers and the Saas eco-system in the US (7) A stricter implementation of work from office rules – meaning companies are open to living with higher attrition as they see weakness in demand into the future.









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.

Infosys - Thrust Should Have Been on Core Services and ‘essential’ Digital

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.

Quantitative Analysis

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<li>An overview (and output) of our machine learning-driven GEM screening model, which seeks to find the best medium-term long ideas within the top100 stocks in the MSCI GEM Index.</li>
<li>The model is based on 1) a quantitative multifactor screening model, enhanced by two AI Technology-based approaches; 2) a Deep Neural Network model, and 3) a Recurrent Neural Network model.</li>
<li>Developed over roughly 4 years and implemented in its current state for over 2 years, the model has a solid real-world alpha-generating performance track record, discussed in detail below.</li>
</ul>


An overview (and output) of our machine learning-driven GEM screening model, which seeks to find the best medium-term long ideas within the top100 stocks in the MSCI GEM Index.
The model is based on 1) a quantitative multifactor screening model, enhanced by two AI Technology-based approaches; 2) a Deep Neural Network model, and 3) a Recurrent Neural Network model.
Developed over roughly 4 years and implemented in its current state for over 2 years, the model has a solid real-world alpha-generating performance track record, discussed in detail below.


Thematic (Sector/Industry)

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<li>The Global Emerging Markets weekly provides a summary of the key news and related developments impacting the largest countries and constituents of the Global Emerging Markets equity indices.</li>
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<em><strong> Macro data points:</strong></em>Chinese macro activity and interest rates, Philippines and South Africa raise interest rates, South Korean PPI</li>
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<em><strong> Companies mentioned:</strong></em><a href="https://www.smartkarma.com/entities/reliance-industries-ltd" target="_blank" data-smartkarma-citation="entities:198:1" rel="noopener">Reliance Industries (RIL 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/taiwan-semiconductor-manufacturing-company" target="_blank" data-smartkarma-citation="entities:11230:1" rel="noopener">TSMC (2330 TT)</a>, <a href="https://www.smartkarma.com/entities/huawei-technologies-co-ltd" target="_blank" data-smartkarma-citation="entities:8231:1" rel="noopener">Huawei Technology (40978Z CH)</a>, <a href="https://www.smartkarma.com/entities/zte-corp-h" target="_blank" data-smartkarma-citation="entities:6922:1" rel="noopener">ZTE Corp H (763 HK)</a>
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The Global Emerging Markets weekly provides a summary of the key news and related developments impacting the largest countries and constituents of the Global Emerging Markets equity indices.

 Macro data points:Chinese macro activity and interest rates, Philippines and South Africa raise interest rates, South Korean PPI

 Companies mentioned:Reliance Industries (RIL IN), Infosys Ltd (INFO IN). TSMC (2330 TT), Huawei Technology (40978Z CH), ZTE Corp H (763 HK)



GEM Weekly (20 May 2022): Chinese Macro and Monetary Easing; Reliance, Infosys, TSMC, Huawei

<div><div><div><div><ul><li>4QFY22 key takeaways: While the revenues were broadly in line with expectations, supply-side challenges meant that margins disappointed.</li></ul><div><div><div><div><ul><li>A massive margin regime change on the cards in FY24, but this will not mean much from a stock performance perspective in the next 12 months:</li></ul><div><div><div><div><ul><li>Tier-2 could face significant risks in the new environment: We fear Indian Tier-2 IT would suffer more because of vendor consolidation under the pressured profit picture for customers, a less diversified revenue mix (client, service line, vertical), which could throw up negative growth surprises, and a larger exposure to non-Global 1000 clientele whose profits are more vulnerable in the current challenging macro environment. Indian Tier-2 IT is now at a PE premium of ~20% to Tier-1 from a discount of 14% on 1st January, 2020.</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>

4QFY22 key takeaways: While the revenues were broadly in line with expectations, supply-side challenges meant that margins disappointed.A massive margin regime change on the cards in FY24, but this will not mean much from a stock performance perspective in the next 12 months:Tier-2 could face significant risks in the new environment: We fear Indian Tier-2 IT would suffer more because of vendor consolidation under the pressured profit picture for customers, a less diversified revenue mix (client, service line, vertical), which could throw up negative growth surprises, and a larger exposure to non-Global 1000 clientele whose profits are more vulnerable in the current challenging macro environment. Indian Tier-2 IT is now at a PE premium of ~20% to Tier-1 from a discount of 14% on 1st January, 2020.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.

Sector Update - Cut Target Prices yet Again; Customer Stress Shows up Earlier than Expected

Pan-Asia Index Flows & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Pan-Asia Index Flows & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Event-Driven

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<li>On 6th May 2022, <a href="https://www.smartkarma.com/entities/larsen-toubro-ltd" target="_blank" data-smartkarma-citation="entities:2499:1" rel="noopener">Larsen &amp; Toubro (LT IN)</a>'s publicly-listed subsidiaries <a href="https://www.smartkarma.com/entities/mindtree-ltd" target="_blank" data-smartkarma-citation="entities:7297:1" rel="noopener">Mindtree Ltd (MTCL IN)</a> and <a href="https://www.smartkarma.com/entities/larsen-toubro-infotech-ltd" target="_blank" data-smartkarma-citation="entities:22778:1" rel="noopener">Larsen &amp; Toubro Infotech (LTI IN)</a> announced plans to merge.</li>
<li>I discussed this situation previously in <a href="https://www.smartkarma.com/insights/mindtree-lti-a-potential-us-20bn-indian-tech-merger-mindtree-could-outperform-lti" target="_blank" data-smartkarma-citation="insights:68634" rel="noopener">Mindtree-LTI: A Potential US$20bn+ Indian Tech Merger; Mindtree Could Outperform LTI</a> when the ratio was 0.66, expecting a scrip ratio north of 0.70.  </li>
<li>Below is a closer look at the details of the transaction and the outlook for the combined entity.</li>
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On 6th May 2022, Larsen &amp; Toubro (LT IN)'s publicly-listed subsidiaries Mindtree Ltd (MTCL IN) and Larsen &amp; Toubro Infotech (LTI IN) announced plans to merge.
I discussed this situation previously in Mindtree-LTI: A Potential US$20bn+ Indian Tech Merger; Mindtree Could Outperform LTI when the ratio was 0.66, expecting a scrip ratio north of 0.70.  
Below is a closer look at the details of the transaction and the outlook for the combined entity.


Mindtree-LTI: Merger Announced to Form India's 5th Largest IT Services Player

India

Infosys Limited provides IT consulting and software services, including e-business, program management and supply chain solutions. The Group's services include application development, product co-development, and system implementation and system engineering. Infosys targets businesses specializing in the insurance, banking, telecommunication and manufacturing sectors.

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Infosys Ltd Sp Adr (INFY US)

Infosys - Thrust Should Have Been on Core Services and ‘essential’ Digital

Infosys’ (INFY) analyst meet on 31st May, 2022 was a review of the past 4 & a half years of the ‘Salil Parekh 1.0’ era and a spotlight on the...

Nirmal Bang

Screening for GEMs: June 2022

This insight provides an overview of our, machine learning-driven, proprietary GEM screening model, based on a Multifactor model, a Deep Neural...

Wium Malan, CFA

GEM Weekly (20 May 2022): Chinese Macro and Monetary Easing; Reliance, Infosys, TSMC, Huawei

The Global Emerging Markets weekly provides a summary of the key news and related developments impacting the largest countries and constituents of...

Wium Malan, CFA

Sector Update - Cut Target Prices yet Again; Customer Stress Shows up Earlier than Expected

Just 40 days post our downgrade of the IT sector to ‘underweight’, we have reduced target prices yet again and have moved our entire coverage...

Nirmal Bang

Mindtree-LTI: Merger Announced to Form India's 5th Largest IT Services Player

Larsen & Toubro (LT IN)'s public-listed subsidiaries Mindtree Ltd (MTCL IN) and Larsen & Toubro Infotech (LTI IN) announced plans to merge. The...

Janaghan Jeyakumar, CFA

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