External broker reports(aggregated public sources), HDFC Securities

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External broker reports(aggregated public sources)

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Equity Bottom-Up

GAIL (India): Our BUY recommendation on GAIL with a price target of INR 210 is based on 9% CAGR expansion in gas transmission volume over FY22-24E to 136mmscmd on the back of (1) increase in domestic gas production, (2) increase in demand of RLNG, and (3) completion of major pipelines in eastern and southern India. Q2FY22 EBITDA/APAT were 34/47% above our estimates, owing to a 7% higher revenue, lower-than-expected raw material cost, higher-than-expected other income, and lower-than-expected tax outgo.
<div class="content-highlight">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.</div>

GAIL (India): Our BUY recommendation on GAIL with a price target of INR 210 is based on 9% CAGR expansion in gas transmission volume over FY22-24E to 136mmscmd on the back of (1) increase in domestic gas production, (2) increase in demand of RLNG, and (3) completion of major pipelines in eastern and southern India. Q2FY22 EBITDA/APAT were 34/47% above our estimates, owing to a 7% higher revenue, lower-than-expected raw material cost, higher-than-expected other income, and lower-than-expected tax outgo.
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.

HSIE Results Daily: NTPC, DLF, InterGlobe Aviation, Tata Power, GAIL (India), JSW Energy, Bandhan...

Accordingly, we revise our TP upwards to INR209 by assigining higher multiples to the solar business, reducing losses at Mundra, and robust growth in its solar rooftop and pump business. However, since the stock has risen a steep 70% over the past three months to INR218, it seems fairly valued currently. Hence, we downgrade it to REDUCE from a BUY. Tata Power reported an 18% YoY rise in consolidated revenue to INR98.1bn in Q2FY22, led by improvement across the standalone business and strong execution in the solar EPC segment.<div class="content-highlight">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.</div>

Accordingly, we revise our TP upwards to INR209 by assigining higher multiples to the solar business, reducing losses at Mundra, and robust growth in its solar rooftop and pump business. However, since the stock has risen a steep 70% over the past three months to INR218, it seems fairly valued currently. Hence, we downgrade it to REDUCE from a BUY. Tata Power reported an 18% YoY rise in consolidated revenue to INR98.1bn in Q2FY22, led by improvement across the standalone business and strong execution in the solar EPC segment.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.

Tata Power (Results Review 2QFY22): Margin impacted, but high JV share boosts PAT. Downgrade to...

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

The Indian mutual fund industry has assets of almost INR 7.93 trillion (US$106.3bn) across Multi cap, Large Cap, Large and Mid Cap, Mid Cap, Small Cap and Flexi Cap equity schemes. Equity schemes classified as large cap need to have at least 80% of their assets invested in large cap stocks, large and mid cap schemes need to have at least 35% of their assets in large cap stocks and at least 35% in mid cap stocks, mid cap funds need to hold at least 65% of their assets in mid cap stocks, and small cap funds need to hold at least 65% of their assets in small cap stocks. Flexi cap funds can invest across market caps.The Association of Mutual Funds in India (AMFI) publishes the list of the stocks in each market cap segment in January and July each year and mutual funds have one month to rebalance their portfolios to adhere to the new categorization.We are just past halfway through the review period for the second half of 2021. Using data to the close on 4 October, at the next recategorization in January 2022, we see 10 stocks moving from the mid cap segment to the large cap segment, 11 stocks moving from the large cap segment to the mid cap segment , 11 stocks are expected to move from the small cap segment to the mid cap segment, with16 stocks moving from the mid cap to the small cap segment. <a href="https://www.smartkarma.com/entities/zomato-media-pvt" target="_blank" data-smartkarma-citation="entities:28820:1" rel="noopener">Zomato (ZOMATO IN)</a> will be a part of the large cap universe, while 4 other newly listed stocks will be a part of the mid cap universe.Historically, stocks moving to a higher market cap category have outperformed stocks that migrate to a lower market cap category over the back half of the review period. In some cases, the outperformance continues past the announcement of the changes as well. This can be attributed to fund managers realigning their portfolios to meet the new categorization. This provides opportunities to pre-position for the move and unwind post the announcement of the reclassification.

The Indian mutual fund industry has assets of almost INR 7.93 trillion (US$106.3bn) across Multi cap, Large Cap, Large and Mid Cap, Mid Cap, Small Cap and Flexi Cap equity schemes. Equity schemes classified as large cap need to have at least 80% of their assets invested in large cap stocks, large and mid cap schemes need to have at least 35% of their assets in large cap stocks and at least 35% in mid cap stocks, mid cap funds need to hold at least 65% of their assets in mid cap stocks, and small cap funds need to hold at least 65% of their assets in small cap stocks. Flexi cap funds can invest across market caps.The Association of Mutual Funds in India (AMFI) publishes the list of the stocks in each market cap segment in January and July each year and mutual funds have one month to rebalance their portfolios to adhere to the new categorization.We are just past halfway through the review period for the second half of 2021. Using data to the close on 4 October, at the next recategorization in January 2022, we see 10 stocks moving from the mid cap segment to the large cap segment, 11 stocks moving from the large cap segment to the mid cap segment , 11 stocks are expected to move from the small cap segment to the mid cap segment, with16 stocks moving from the mid cap to the small cap segment. Zomato (ZOMATO IN) will be a part of the large cap universe, while 4 other newly listed stocks will be a part of the mid cap universe.Historically, stocks moving to a higher market cap category have outperformed stocks that migrate to a lower market cap category over the back half of the review period. In some cases, the outperformance continues past the announcement of the changes as well. This can be attributed to fund managers realigning their portfolios to meet the new categorization. This provides opportunities to pre-position for the move and unwind post the announcement of the reclassification.

India: Stock Reclassification & Active Portfolio Management (Dec 2021)

While we have maintained our earnings estimates for FY22/FY23, we have revised our TP upward to INR156 by assigining higher multiples to its EPC &amp; renewable businesses, reducing losses at Mundra and accruing benefits from the proposed merger. We retain our BUY rating. Tata Power reported a 54.5% YoY rise in consolidated revenue at INR99.8bn in Q1FY22, led by the acquisition of Odisha discoms and strong execution across the solar EPC segment. EBITDA increased 34.3% YoY due to integrated PAT at Mundra + coal mining business (from the rise in coal prices) and higher EPC revenue.<div class="content-highlight">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.</div>

While we have maintained our earnings estimates for FY22/FY23, we have revised our TP upward to INR156 by assigining higher multiples to its EPC &amp; renewable businesses, reducing losses at Mundra and accruing benefits from the proposed merger. We retain our BUY rating. Tata Power reported a 54.5% YoY rise in consolidated revenue at INR99.8bn in Q1FY22, led by the acquisition of Odisha discoms and strong execution across the solar EPC segment. EBITDA increased 34.3% YoY due to integrated PAT at Mundra + coal mining business (from the rise in coal prices) and higher EPC revenue.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.

Tata Power (1QFY22 Results Review): EPC ramp-up and Odisha discom boost aid growth. Maintain BUY

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

Power Grid Corporation Of India / Equity Capital Markets

POWERGRID Infrastructure Investment Trust (PGIT) aims to raise around US$1bn in its India IPO. PGIT is an investment trust setup to own transmission assets of its sponsor Power Grid Corporation of India Limited (PGCIL). PGCIL is a central public sector enterprise which has been listed since 2007. PGIT will initially own five assets with a total network of 11 power transmission lines of approximately 3,698.59 ckm and three substations having 6,630 Megavolt amperes (MVA) of aggregate transformation capacity, as of Sep 2020, across five states in India. The total valuation of the assets was INR105bn (US$1.4bn) as of Sep 2020. These assets were awarded to PGCIL on a  build-own-operate-maintain (BOOM) basis. Therefore, the assets are operated under a long 35 years service agreement with largely pre-fixed revenue based on availability. In that sense, they will provide stable returns. However, its revenue terms are structured in such a way that its yield will continue to decline, while its sponsor’s government ownership will mean that it's unlikely to diversify away from transmission assets with declining yield.

POWERGRID Infrastructure Investment Trust (PGIT) aims to raise around US$1bn in its India IPO. PGIT is an investment trust setup to own transmission assets of its sponsor Power Grid Corporation of India Limited (PGCIL). PGCIL is a central public sector enterprise which has been listed since 2007. PGIT will initially own five assets with a total network of 11 power transmission lines of approximately 3,698.59 ckm and three substations having 6,630 Megavolt amperes (MVA) of aggregate transformation capacity, as of Sep 2020, across five states in India. The total valuation of the assets was INR105bn (US$1.4bn) as of Sep 2020. These assets were awarded to PGCIL on a  build-own-operate-maintain (BOOM) basis. Therefore, the assets are operated under a long 35 years service agreement with largely pre-fixed revenue based on availability. In that sense, they will provide stable returns. However, its revenue terms are structured in such a way that its yield will continue to decline, while its sponsor’s government ownership will mean that it's unlikely to diversify away from transmission assets with declining yield.

POWERGRID InvIT Pre-IPO - Always Going to Be Tricky with a Declining Yield

India

Adani Transmission Limited provides utility services. The Company offers electricity generation, transmission, and distribution services. Adani Transmission conducts its business globally.

Torrent Power Limited generates, transmits and distributes power. The Company also implements large power projects in India.

SJVN Limited develops, owns, and operates Hydro-electric power projects in India. The Company operates power generating plants in states that include Himachal Pradesh,

CESC Limited generates and supplies electricity in and around Kolkata. The Company also provides consultancy services for setting up power plants and for erecting transformers and electrical equipment.

India Grid Trust operates as an infrastructure investment trust. The Company invests, designs, finances, constructs, and maintains power transmission projects. India Grid Trust serves customers in India.

Reliance Infrastructure Ltd. generates, distributes, and transmits electricity. The Company also builds highways, roads, bridges, rapid transit systems, airports, and other projects. Reliance Infrastructure is a member of the Reliance Anil Dhirubhai Ambani Group.

JSW Energy Limited generates power by using Corex gas and coal. The Company, through its subsidiary, also operates lignite thermal power plant in Rajasthan and has a capacity to produce 3,140 megawatts of electricity. JSW is also present in the power trading and transmission businesses.

GAIL India Limited processes and distributes natural gas and liquefied petroleum gas. The Company is a Government of India undertaking.

NHPC Ltd is a hydro-power development company based in India. The Company has constructed approximately 11 hydro-power projects in India and abroad with a total installed capacity of 2554.35 MW.

Gujarat Gas Limited provides natural gas. The Company supplies piped natural gas to residential, commercial, and industrial customers. Gujarat Gas serves customers in India.

CK Infrastructure Holdings Limited (CKI) operates as a real assets investment company. The Company invests in energy, transportation, water, and electricity generation sectors. CKI serves customers worldwide.

Tenaga Nasional Berhad transmits, distributes, and sells electricity under license issued by the Director General of Electricity Supply. Through its subsidiaries, the Company manufactures, sells and repairs transformers and switchgears. Tenaga Nasional also provides project management and consultancy, engineering works and energy project development services.

Brookfield Infrastructure Partners LP owns and operates infrastructure assets. The Company operates utilities, transport, energy, and communications infrastructure assets in North and South America, Australia, and Europe.

Brookfield Infrastructure Partners L.P. (BIP US)

Alliant Energy Corporation provides public-utility service to customers in the Midwest.  The Company's utility subsidiaries serve electric, natural gas, and water customers in Illinois, Iowa, Minnesota, and Wisconsin.

The Kansai Electric Power Company, Incorporated generates electricity from hydroelectric, thermal, geothermal, and nuclear power sources.  The Company distributes electricity to Osaka and the surrounding Kansai area.  Kansai Electric also constructs and maintains electrical power facilities.

Terna - Rete Elettrica Nazionale SpA transmits electricity over the high-voltage and extra-high voltage grid in Italy.  Through subsidiaries, the Company owns a substantial share of the national electricity transmission grid.

Terna - Rete Elettrica Nazionale (TRN IM)

EDP - Energias de Portugal, S.A. generates, supplies and distributes electricity and the supply of gas in Portugal and Spain. Through subsidiaries, the Company is involved with electricity distribution, generation and supply in Brazil, and wind power promotion, construction and operations in Spain, Portugal, France and Belgium.

Fortum Oyj provides a full range of energy related products and services. The Company's activities cover the generation, distribution, and sale of electricity and heat and steam, as well as the operation of power plants and energy-related services. Fortum operates worldwide but mainly in Northern Europe.

Hydro One Limited is an electrical transmission and distribution utility in Ontario. The company delivers electricity safely and reliably to customers across the province, and to large industrial customers and municipal utilities. Hydro One owns and operates Ontario's transmission and low-voltage distribution network.

Centrais Eletricas Brasileiras S.A. (Eletrobras) generates, transmits, and markets electricity through regional companies in Brazil.  The Company plans, finances, coordinates, and supervises expansion projects for its subsidiaries.

Tata Power Company Limited generates and supplies electricity in Mumbai and its suburbs. The Company also constructs and operates independent power plants as well as captive power plants for industrial concerns. Tata Power also provides various services related to electricity distribution, erects and commissions transmission lines, and is diversifying into the telecommunications market.

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Tata Power (TPWR IN)

HSIE Results Daily: NTPC, DLF, InterGlobe Aviation, Tata Power, GAIL (India), JSW Energy, Bandhan...

GAIL (India): Our BUY recommendation on GAIL with a price target of INR 210 is based on 9% CAGR expansion in gas transmission volume over FY22-24E...

HDFC Securities

India: Stock Reclassification & Active Portfolio Management (Dec 2021)

Halfway through the review period, we take a look at stocks that could migrate across the large, mid and small cap segments. With over US$100bn of...

Brian Freitas

Tata Power (1QFY22 Results Review): EPC ramp-up and Odisha discom boost aid growth. Maintain BUY

While we have maintained our earnings estimates for FY22/FY23, we have revised our TP upward to INR156 by assigining higher multiples to its EPC &...

HDFC Securities

POWERGRID InvIT Pre-IPO - Always Going to Be Tricky with a Declining Yield

POWERGRID Infrastructure Invt Trust aims to raise around US$1bn in its India IPO. PGIT is an investment trust setup to own transmission assets of...

Sumeet Singh

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52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

HSIE Results Daily: NTPC, DLF, InterGlobe Aviation, Tata Power, GAIL (India), JSW Energy, Bandhan...

GAIL (India): Our BUY recommendation on GAIL with a price target of INR 210 is based on 9% CAGR expansion in gas transmission volume over FY22-24E...

HDFC Securities

Tata Power (Results Review 2QFY22): Margin impacted, but high JV share boosts PAT. Downgrade to...

Accordingly, we revise our TP upwards to INR209 by assigining higher multiples to the solar business, reducing losses at Mundra, and robust growth...

HDFC Securities

India: Stock Reclassification & Active Portfolio Management (Dec 2021)

Halfway through the review period, we take a look at stocks that could migrate across the large, mid and small cap segments. With over US$100bn of...

Brian Freitas

Tata Power (1QFY22 Results Review): EPC ramp-up and Odisha discom boost aid growth. Maintain BUY

While we have maintained our earnings estimates for FY22/FY23, we have revised our TP upward to INR156 by assigining higher multiples to its EPC &...

HDFC Securities

POWERGRID InvIT Pre-IPO - Always Going to Be Tricky with a Declining Yield

POWERGRID Infrastructure Invt Trust aims to raise around US$1bn in its India IPO. PGIT is an investment trust setup to own transmission assets of...

Sumeet Singh