India

• 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.

• Companies in India have disclosed their shareholding pattern as of end-March in April. There are companies with significant float changes from end-September and/or end-December.
• The changes in free float could be reflected in domestic and global indices over the next few weeks and months resulting in action from passive trackers.
• Depending on the date that the shareholding was published, there could be 14 stocks with passive inflows from global trackers while 7 could see passive outflows in May.

• SEBI extends cross-margining discounts to correlated assets with different maturities – Dispersion trading & vol arb strategies to benefit. 
• In spite of upcoming tier-1 event risks the vol surface has flattened  dramatically. Current IV levels are supportive of a continued “High & Down” vol state.
• Curve steepening seen in Nifty50 IVs. Unusual kinked-shaped in BankNifty term structure has normalized – vol curve now has a uniform orientation.

• GBL was touted as a turnaround story as few investors have shown faith by infusing the funds for further expansion
• In a rare instance, one of the promoter member fraudlently took the loan of 45 crores in the name of the company
• What lies ahead is the case possible fund diversion and promoter family feud

• RBI has barred Kotak Bank from expanding its digital business and credit card issuance
• Rather than earnings damage (max -10%) there is more reputational damage to the bank taking away premium valuations it used to command
• The way ahead lies for the bank is the path of moderate growth 

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.

• China Oil And Gas
• Continuum Green Energy
• Indika Energy

• Afcons Infrastructure Limited (6595396Z IN) is looking to raise US$840m in its upcoming India IPO.
• Afcons Infrastructure Limited (Afcons) is the flagship infrastructure engineering and construction company of the Shapoorji Pallonji group.
• In this note, we talk about the not-so-positive aspects of the deal.

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.

• SK Hynix
• Vedanta Resources

• Afcons Infrastructure Limited (6595396Z IN) is looking to raise US$840m in its upcoming India IPO. 
• Afcons Infrastructure Limited (Afcons) is the flagship infrastructure engineering and construction company of the Shapoorji Pallonji group.
• In this note, we talk about the positive aspects of the deal. 

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.

• Reliance Industries