India

• Branches visited – Ajmer, Bengaluru, Mandya, Mysuru, Jaipur, Solapur, Pimpri and Pune.
• Business growth is driven by taking calls that peers are reluctant to take with regards to property and incomes.
• Lack of team and increasing competition are primary concerns that also warrant attention. 

• Indegene Limited (1864095D IN) raised around US$220m in its India IPO, via selling a mix of primary and secondary shares.
• Indegene is a “digital-first” commercialisation firm with an exclusive focus on the global life sciences industry.
• We had looked at the firm’s past performance and shared our thoughts on Indegene’s valuation in earlier notes. In this note, we will look at the trading dynamics.

• Swiggy aims to raise US$1.25bn in its upcoming India IPO. The company has filed confidentially for its IPO, which is likely to be launched towards the end of the year.
• Swiggy, along with Zomato, operates a duopoly that has come to dominate the food delivery market in India. In 1H24, Swiggy serviced over 274,000 restaurants via its 370,000 delivery partners.
• In this note, we will take an early look at the company based on the publicly available financials. 

• SK Finance Limited (0893736D IN) is looking to raise US$260m in its upcoming India IPO. The bookrunners on the deal are Kotak, Jefferies, Motilal Oswal, and Nomura.
• SK Finance is a non-deposit non-banking finance company middle layer (NBFC ML) operating in two main verticals, vehicle financing and financing for micro, small and medium enterprises (MSMEs).
• As per the CRISIL report in the DRHP, the firm was the fastest growing player in the vehicle financing and MSME financing segments based on AUM growth over FY21-23.

• As we progress in earnings season in line with our previous Playbook, this one focuses on select consumer names. 
• Names discussed include Titan Co Ltd (TTAN IN), Vedant Fashions (MANYAVAR IN) , Go Fashion India (GOCOLORS IN) & Shoppers Stop (SHOP IN).  
• Most names expect a soft Q1, and SHOP is targeting the most aggressive expansion.

• Dr. Reddy’s Laboratories (DRRD IN) reported 13% revenue growth to INR71.1B in Q4FY24. EBITDA climbed 15% to INR18.7B, while net profit zoomed 36% to INR13.1B.
• North America revenue grew 29% YoY to INR32.6B, driven by increase in volumes of base business, contribution from new launches, integration of Mayne portfolio, partly offset by price erosion.
• After adjusting for brand divestment, revenue from India increased 11% YoY. Gross margin improved 140bps YoY and 10bps QoQ to 58.6%, due to better product mix and cost savings.

• Quint Digital (QUINT IN) announces alterations to its MoA, changing its name and expanding its digital ventures, including joint ventures and acquisitions.
• Quintype Technologies India Limited’s impressive growth and the acquisition of Lee Enterprises (LEE US) highlight Quint Digital’s ambitions and potential.
• Despite debt concerns, Quint Digital’s strategic investments in digital media and technology position it for substantial growth, potentially reshaping the digital publishing landscape.

• Delta Corp Ltd (DELTA IN) sells its Nepal casino business to Ability Games amidst allegations of connections to illegal betting and money laundering.
• The ED’s investigations into Mahadev Online Book reveal a Rs 3,916 crore scam, freezing of Rs 580.78 crore assets, and involvement of companies like Ability Games.
• CEO of Delta Corp Ltd (DELTA IN)mentioned in ED statement that they have agreed for 10Crs over and above the transaction value.

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• Adaro Energy
• Greentown China
• Vedanta Resources

• Aadhar Housing Finance (AHF) is now looking to raise around US$360m in its India IPO, via selling a mix of primary and secondary shares.
• AHF is focused on the low income housing segments (ticket size less than INR1.5m) in India. It offers a range of mortgage-related loan products.
• We have looked at the company’s performance in our past note. In this note, we talk about valuations.

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• Adani Green Energy
• Japfa Comfeed Indonesia
• Medco Energi
• Pakuwon Jati

• Ajanta Pharma (AJP IN) reported strong Q4FY24 results, with double-digit revenue and PAT growth, and improving margins, driven by growth across all the business segments.
• The company has announced INR3.5B buyback plan, involving purchase of 10,28,881 equity shares (0.82% of the total paid-up equity share capital) at a price of INR2,770 per equity share.
• Ajanta Pharma is confident of maintaining double-digit growth going ahead with the existing products gaining market share, new launches, and expansion of field force.

Adani Ports and Special Economic Zone (APSEZ) has released FY 2023-24 numbers that were slightly above expectations. The company’s strong revenue and EBITDA growth (of 28% and 24% y-o-y, respectively) exceeded management’s guidance, supported by higher than estimated growth in cargo volumes. APSEZ appears poised to achieve its target of 500 MMT cargo volumes in 2025, supported by organic growth and the contribution from its latest acquisition (Gopalpur Port). Net adjusted leverage improved to 2.9x (FY 2022-23: 4.0x). We expect leverage to be stable in FY 2024-25, in line with management’s guidance.

APSEZ appears to have a renewed appetite for expansion (particularly in overseas markets, amid its already strong domestic position), which may present event risks. In the meantime, the company may remain affected by negative headlines related to corporate governance issues at the broader Adani Group.

• Implied Volatilities (IVs) have stabilized over the past few weeks & look to be in the early stages of an uptrend. 
• Breakdown in Spot-Vol correlation – higher IVs at a time when Equity Indices are flirting with All-time-Highs.
• Skew compression in BankNifty Options driven by call-buying on the break above 49000, further exacerbated by pre-election demand for June & July expiries. 

• TBO Tek (0395045D IN) is looking to raise approximately US$200m in its upcoming India IPO.
• TBO Tek is a global travel distribution platform. Its two-sided technology platform serves companies involved in the travel industry such as hotels, airlines, travel agencies and travel management companies.
• In this note, we provide a summary of its RHP updates and share our quick thoughts on valuation.

• Gravita India (GRAV IN) faced a Qualified Audit Opinion over share sale proceeds’ reporting by its Employee Welfare Trust.
• The dispute centers on whether to record these proceeds in the P&L or Balance Sheet, impacting transparency and financial metrics.
• This dispute reduced the PBT by 7.54% and EPS  by 8.66% decrease in Q4 FY24.

• Indegene Limited (1864095D IN) is looking to raise US$220m in its India IPO, via selling a mix of primary and secondary shares.
• Indegene is a “digital-first” commercialisation firm with an exclusive focus on the global life sciences industry.
• In this note, we will look at peers and discuss our thoughts on valuation.

• The NIFTY Index kept rising for the past few months but has stalled its advance since March. It may be about to pullback and lose some gains, in May.
• The index is currently up 2 weeks in a row, not yet strongly overbought but our model say that from a time perspective it could start to pullback next week.
• If the index does not start to pullback soon, it could rally for another 2-3 weeks.

• As we step into the earnings season focus on highlighting key earnings and what catches our attention analyzing companies part of the same sector or industry.
• Companies highlighted include Bajaj Finance Ltd (BAF IN); Shriram Finance (SHFL IN); L&T Finance Holdings (LTFH IN) ; Poonawalla Fincorp (POONAWAL IN) & Aavas Financiers Ltd (AAVAS IN) .
• BAF’s negative commentary around rural B2C business is surprising and an area that warrants further investigation.

• Honasa Consumer (HONASA IN) raised about US$200m in its India IPO. Its pre-IPO investors will be released from its IPO linked lockup soon.
• HC’s product portfolio includes products in the baby care, face care, body care, hair care, color cosmetics and fragrances segments.
• In this note, we talk about the upcoming lock-up expiry and possible deal dynamics.

• Indegene Limited (1864095D IN) is looking to raise about US$220m in its upcoming India IPO.
• Indegene is a “digital-first” commercialisation firm with an exclusive focus on the global life sciences industry.
• We looked at the firm’s past performance in an earlier note. In this note, we look at the RHP updates.

• Linde India entered into related party transaction without shareholders approval.
• Further company also allocated future businesses and existing business of Linde India to its sister concern Praxair
• Whether existing RPTs material in nature and need shareholder approval?  Whether the allocation of future and existing business from a listed entity to another promoter company amount to a RPT?

• While HDFCB’s results have been somewhat lackluster over the past couple of quarters, this has been largely due to merger-related drags, tight liquidity and irrational competition in the marketplace.
• From a medium-to-long-term perspective, the growth prospects for HDFCB remain tremendously attractive despite its large size, as evident from its consistent market share gains in deposits.
• Q4FY24 earnings came largely in line with the expectation in terms of core earnings, except for one-off gain from an asset sale that was more than offset by floating provisions.

• Under Mohit Joshi’s leadership, Tech Mahindra (TECHM IN) targets a 15%+ EBIT margin and revenue growth surpassing industry averages by FY2027, with a focus on operational reform and portfolio integration.
• Project Fortius aims to achieve $250 million annual cost savings over 3 years, emphasizing high-margin services and organic growth, signaling a departure from  reliance on traditional acquisitions.
• This strategic shift towards operational efficiency and organic growth alters the company’s outlook, positioning Tech Mahindra for sustainable growth and shareholder returns, underlining a commitment to long-term value creation.

• HDFC Bank results to FYE24 are improving and we retain it as a buy, with pre-provision returns improving slightly QoQ and best in peer group NPL ratio and coverage
• Bank of Baroda is our core value Indian bank pick, for its undemanding valuations, healthy ROE and potential for NPL improvements
• Bandhan bank is a potential contrarian pick for its value attributes; we are cautious on State Bank of India for its delinquency risks, low core capital ratio 

• TBO Tek (0395045D IN) is looking to raise approximately US$200m in its upcoming India IPO.
• TBO Tek is a global travel distribution platform. Its two-sided technology platform serves companies involved in the travel industry such as hotels, airlines, travel agencies and travel management companies.
• In our previous note, we talked about the company’s historical performance. In this note, we talk about its refiling updates and undertake a peer comparison.

• Premier Energies Limited (0377949D IN) is into manufacturing of solar cells and modules. The company is the second largest integrated player (cell+module) in India with a market share of 28%
• The business has picked up in the last two years. Revenues, order book and capacities have increased and margins have also seen improvement. 
• However, the company is struggling on cash conversion on the back of highly levered balance sheet. Focus should also be on few questionable related party transactions.

• Indegene Limited (1864095D IN) has set IPO price band at INR430–452 per share. The IPO consists of fresh issue as well as OFS by existing shareholders.
• Considering FY24 annualized post-IPO EPS of INR13.48, Indegene seeks a P/E valuation of 31.9–33.5x.
• Considering niche business focus, proven execution capability, marquee clientele, long-standing client relationship, life science focus, and comprehensive offering, Indegene’s valuation seems quite attractive.

• SEBI has asked BSE to pay regulatory fees on options trading based on notional turnover instead of premium turnover
• The impact of this would 10-20% on earnings in short term
• The bigger question lies ahead what BSE will do to offset the impact and grow its market share in derivative trading

• Waaree Renewable Technologies (WAREERTL IN) or (WRTL) is into Solar EPC and is a subsidiary of Waaree Energies Ltd. 
• Revenues and order book have increased exponentially in the last few years.
• While the business has certainly picked up, there are few forensic checks that need attention; most important being the auditor’s comment on the need to increase strength of internal controls.

• Premier Energies Limited (0377949D IN) is looking to raise US$300m in its upcoming India IPO. The bookrunners on the deal are JP Morgan, Kotak, and ICICI Securities.
• Premier Energies (Premier) is a manufacturer of solar photovoltaic (PV) cells, and solar modules. It also executes EPC projects and provides follow-up O&M services.
• As per Frost & Sullivan (F&S), the firm was the second largest domestic manufacturer in terms of annual installed capacity as of Mar 2024.

• HI-Tech Pipes (HITECH IN) is engaged in manufacturing of ERW Steel Round & Section Pipes, cold Rolled Strips, coils, and colour coated sheet, etc. and has distribution across India.
• The company has grown impressively in the last 5-7 years and has seen improved balance sheet and working capital situation.
• However, tapering return ratios, prolonged concern on cash conversion and erosion of margins are few talking points that should be taken into account.