Mid-Small Cap specialist | Equities | India, Nurture Capital Advisory

Nurture Capital Advisory

Mid-Small Cap specialist | Equities | India

Equity Bottom-Up

<ul>
<li>Low valuations (3x Earnings, 8% cash yield) and an under supplied Oil market, nice value concoction  </li>
<li>However, large part of value hinges on growth beyond FY25E, execution challenges and regulatory intervention may necessitate additional debt to fund ongoing capex</li>
<li>Thus deleveraging unlikely, narrowing TV for traditional fuels - risks both earnings and valuations </li>
</ul>


Low valuations (3x Earnings, 8% cash yield) and an under supplied Oil market, nice value concoction  
However, large part of value hinges on growth beyond FY25E, execution challenges and regulatory intervention may necessitate additional debt to fund ongoing capex
Thus deleveraging unlikely, narrowing TV for traditional fuels - risks both earnings and valuations 


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>
<a href="https://www.smartkarma.com/entities/life-insurance-corp-of-india-lic" target="_blank" data-smartkarma-citation="entities:28829:1" rel="noopener">Life Insurance Corp of India (LIC) (LICI IN)</a> and <a href="https://www.smartkarma.com/entities/tata-power-co-ltd" target="_blank" data-smartkarma-citation="entities:15618:1" rel="noopener">Tata Power (TPWR IN)</a> will be added to the <a href="https://www.smartkarma.com/entities/nifty-100-index" target="_blank" data-smartkarma-citation="entities:36051:1" rel="noopener">Nifty 100 Index (NSE100 INDEX)</a> and <a href="https://www.smartkarma.com/entities/nifty-next-50-index" target="_blank" data-smartkarma-citation="entities:36053:1" rel="noopener">Nifty Next 50 Index (NIFTYJR INDEX)</a>. </li>
<li>
<a href="https://www.smartkarma.com/entities/nmdc-ltd" target="_blank" data-smartkarma-citation="entities:2016:1" rel="noopener">Nmdc Ltd (NMDC IN)</a> will be deleted from the <a href="https://www.smartkarma.com/entities/cpse-etf" target="_blank" data-smartkarma-citation="entities:28191:1" rel="noopener">CPSE ETF (CPSEBE IN)</a> and there will be no replacement in the index.</li>
<li>The NMDC deletion along with capping changes means that there is decent volume (and ADV) to buy on quite a few names in the <a href="https://www.smartkarma.com/entities/cpse-etf" target="_blank" data-smartkarma-citation="entities:28191:1" rel="noopener">CPSE ETF (CPSEBE IN)</a>.</li>
</ul>



Life Insurance Corp of India (LIC) (LICI IN) and Tata Power (TPWR IN) will be added to the Nifty 100 Index (NSE100 INDEX) and Nifty Next 50 Index (NIFTYJR INDEX). 

Nmdc Ltd (NMDC IN) will be deleted from the CPSE ETF (CPSEBE IN) and there will be no replacement in the index.
The NMDC deletion along with capping changes means that there is decent volume (and ADV) to buy on quite a few names in the CPSE ETF (CPSEBE IN).


NIFTY100 & CPSE Index Rebalance: Some Big Changes in 3 Weeks

External broker reports(aggregated public sources), HDFC Securities

HDFC Securities

External broker reports(aggregated public sources)

HDFC securities is the best online trading platform for stocks, IPOs, mutual fund in India. 

Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

Thematic (Sector/Industry)

<div><div><div><ul><li>Imposition of a SAED of INR 6/ltr (USD 12/bbl) on exports of petrol and ATF <span style="font-size: var(--content-font-size);">and INR 13/ltr (USD 27/bbl) on exports of diesel.</span></li></ul></div></div><div><div><div><div><ul><li>Levy of a SAED of INR 23,250/mt (USD 40/bbl) on domestically produced <span style="font-size: var(--content-font-size);">crude oil. </span></li><li><span style="font-size: var(--content-font-size);">However, no cess will be imposed on the quantity of crude that is </span><span style="font-size: var(--content-font-size);">produced in excess of FY22 production.</span></li></ul></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>

Imposition of a SAED of INR 6/ltr (USD 12/bbl) on exports of petrol and ATF and INR 13/ltr (USD 27/bbl) on exports of diesel.Levy of a SAED of INR 23,250/mt (USD 40/bbl) on domestically produced crude oil. However, no cess will be imposed on the quantity of crude that is produced in excess of FY22 production.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.

Indian Oil and Gas Sector - Subsidy Overhang to Reduce

External broker reports(aggregated public sources), Emkay Global Financial Services Limited

Emkay

Emkay Global Financial Services Limited

Emkay Global Financial Services Ltd. is a leader in the financial services sector, actively creating wealth for our clients for over two decades. 

Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

<div><div><div><div><ul><li>Highlights: Standalone employee costs were 29% below our est. (down 22% yoy/9% qoq), but Other Expenditure was 20% above our estimate due to higher sundry expenses and provisions (down 5%/8%) in Q4FY22.</li><li>DD&amp;A was down due to a 70% decline in depletion. Other Income fell 63% yoy to Rs4.9bn, a 34% miss (from lower dividends).</li><li>The tax rate was lower at 20%. For FY22, OIL reported S/A EBITDA/PAT of Rs53.7bn/Rs38.9bn, up over 4x/2x, driven by higher realizations.</li></ul></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>

Highlights: Standalone employee costs were 29% below our est. (down 22% yoy/9% qoq), but Other Expenditure was 20% above our estimate due to higher sundry expenses and provisions (down 5%/8%) in Q4FY22.DD&amp;A was down due to a 70% decline in depletion. Other Income fell 63% yoy to Rs4.9bn, a 34% miss (from lower dividends).The tax rate was lower at 20%. For FY22, OIL reported S/A EBITDA/PAT of Rs53.7bn/Rs38.9bn, up over 4x/2x, driven by higher realizations.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.

Oil India - Lower Dry Wells and DD&A Drive PAT Beat; Production Grows

Oil & Natural Gas Corp / Equity Bottom-Up

<ul><li>Oil and Natural Gas Corporation (ONGC) and Oil India (OIL) have outperformed the Sensex by 74/42% over the last twelve months, as Brent crude price increased by 68%; we expect the outperformance to continue</li><li>The Domestic Administered Pricing Mechanism (APM) gas price was revised upwards by 110% to USD 6.1/mmbtu in H1FY23; we expect it to further rise by 45% to &gt;USD 8.8/mmbtu in H2FY23</li><li>We expect Brent crude price, which is currently at &gt;USD 100/bbl, to remain elevated, as Organisation of the Petroleum Exporting Countries (OPEC) supply growth is likely to lag global demand growth and supply concerns surrounding geopolitical issues would prevail.</li></ul><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>

Oil and Natural Gas Corporation (ONGC) and Oil India (OIL) have outperformed the Sensex by 74/42% over the last twelve months, as Brent crude price increased by 68%; we expect the outperformance to continueThe Domestic Administered Pricing Mechanism (APM) gas price was revised upwards by 110% to USD 6.1/mmbtu in H1FY23; we expect it to further rise by 45% to &gt;USD 8.8/mmbtu in H2FY23We expect Brent crude price, which is currently at &gt;USD 100/bbl, to remain elevated, as Organisation of the Petroleum Exporting Countries (OPEC) supply growth is likely to lag global demand growth and supply concerns surrounding geopolitical issues would prevail.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.

Indian Oil and Gas – Upstream: Further upside to gas realisation

India

Oil India Ltd. explores, develops, and produces crude oil and natural gas in India and internationally. The Company is also involved in the transportation of crude oil, production of liquefied petroleum gas, pipeline services, as well as various exploration and production related services.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Oil India Ltd (OINL IN)

Oil India (OINL IN): Value Trap, Avoid

Valuations are attractive and an under supplied oil market is positive. However larger growth is beyond FY25E - execution challenges, regulatory...

Nurture Capital Advisory

NIFTY100 & CPSE Index Rebalance: Some Big Changes in 3 Weeks

LIC and Tata Power will be added to the NIFTY100 Index at the close on 5 August. NMDC is being deleted from the NIFTY100 & CPSE indices. There is a...

Brian Freitas

Indian Oil and Gas Sector - Subsidy Overhang to Reduce

Reliance Industries (RIL), ONGC and Oil India (OIL) stocks declined 7-15% on 1st Jul-22 as investors took a dim view of the new levies applied on...

HDFC Securities

Oil India - Lower Dry Wells and DD&A Drive PAT Beat; Production Grows

Q4FY22 S/A revenue/EBITDA/APAT of Rs44.8bn/Rs19.6bn/Rs16.3bn beat our estimates by 2%/10%/16%. EBITDA beat was led by Rs185mn of negative dry well...

Emkay

Indian Oil and Gas – Upstream: Further upside to gas realisation

Oil and Natural Gas Corporation (ONGC) and Oil India (OIL) have outperformed the Sensex by 74/42% over the last twelve months, as Brent crude...

HDFC Securities

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)