India

• Zydus Lifesciences Ltd (ZYDUSLIF IN) recorded 30% YoY growth in revenue to INR51B in Q1FY24, driven by 57% YoY growth in US formulation business. India business revenue grew 6% YoY.
• US business growth was driven by new product launches and improvement in base business. The company has launched four new products in the US during the quarter.
• Zydus Lifesciences expects double-digit growth in India branded formulation business to continue and the U.S. business to grow on a formidable base of FY23 going forward.

• Union Bank Of India (UNBK IN) is looking to raise US$301m from its qualified institutional placement (QIP). Included in the deal is an option to effectively double its base deal. 
• The deal is a relatively large one to digest with the base deal alone representing 21.1 days of three months ADV. 
• That being said, the deal here is a very well flagged one with the firm having earlier reported to look to do so to boost its free float.

• Kolte Patil (KPDL) reported record sales velocity in Q1FY24 and is on track to achieve 25%+ sales value growth in FY24 as per its stated guidance.
• Business development activity is also happening at a record pace and Kolte Patil is on track to beat its prior FY24 guidance of INR 8000cr by a wide margin.
• Despite 80%+ rise in the share price since our coverage initiation 2Y ago, Kolte Patil still offers an upside potential of 25%+ IRR over a holding period of three years. 

• SAMHI Hotels (SAMHI IN) plans to raise around US$200m (estimated) in its Indian IPO.
• Samhi is India’s third-largest hotel asset owner, by number of keys, with a portfolio of 25 operating hotel assets comprising 3,839 keys, as of Feb 2023.
• In this note, we will undertake a peer comparison and provide our thoughts on valuation.

• Jana Small Finance Bank (3667144Z IN) is looking to raise up to US$100m in its upcoming India IPO. The deal will be run by Axis Capital, ICICI-Sec and SBI Capital.
• Jana Small Finance Bank (JSFB) is the fourth largest small finance bank in India in terms of AUM and deposit size as of FY23 (Year ended 31st Mar 2023). 
• The firm has served nearly 12m customers since 2008, including 4.57m active customers as of FY23.

Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and also showcase a list of the most-read reports.

In this Insight:

1. Sino-Ocean Group
2. Adani Ports & Special Economic Zone
3. Road King Infrastructure
4. China Jinmao Holdings
5. Geely Auto

and more…

• Global Health (Medanta) (MEDANTA IN) delivered robust revenue growth and profitability in Q1FY24. Revenue grew 27% YoY and 9% sequentially to INR7.9B. EBITDA margins expanded 250 bps YoY to 25.1%.
• All the key operating metrics including inpatient and outpatient volume, ARPOB, and ALOS improved. However, occupancy declined to 58.1% in Q1FY24 from 60% in Q1FY23 on increased bed capacity.   
• Medanta and DLF will develop a 400 bed multi-specialty hospital in Delhi. Ongoing expansion projects are on track to increase the bed capacity to 3,500–4,000 in FY25 from 2,725.

• NSE Indices has continued to use the current index methodology to come up with the 5 adds/deletes. The proposed methodology seems to be put on ice for reasons unknown.
• Punjab National Bank, Shriram Transport Finance, Trent, TVS Motor and Zydus Lifesciences will replace ACC, FSN E-Commerce Ventures, HDFC Asset Management, Indus Towers and Page Industries.
• The adds, deletes, capping and funding changes will result in one-way turnover of 13% and in a one-way trade of INR 20.77bn. The impact on the adds/deletes is big.

• Bajaj Finance (BAF) reported a strong Q1FY24 earnings, led by an all-time-high quarterly AUM growth of INR 22718cr. With this, BAF has upgraded its FY24 AUM growth guidance to 29-31%.
• AUM growth was aided by the highest ever new loans in a quarter. New loans booked at 9.94mm in Q1FY24 were up 34% YoY and 31%+ QoQ.
• Opex-To-NII has come down to 34.0% vs 35%+ earlier, led by operational leverage and deceleration in investments. This has helped the ROE to jump to 24.0% vs 23.1% YoY.

• Concord Biotech Ltd (658823Z IN) raised US$188m in its India IPO.
• Concord Biotech (Concord) is an India-based biopharma firm, which develops and manufactures fermentation-based active pharmaceutical ingredients (APIs).
• In this note, we will talk about the trading dynamics.

• Astral Ltd (ASTRA IN) is a manufacturer of Chlorinated Poly Vinyl Chloride (CPVC) and Poly Vinyl Chloride (PVC) plumbing systems, catering to both residential and industrial applications. 
• The company offers a compelling narrative, propelled by the larger market trends of agriculture, housing, and market share expansion.
• Despite the confident growth outlook, the current valuation at 75x NTM appears relatively high. It might be prudent to await a more appealing entry opportunity.

• India Shelter Finance (0570670D IN) is looking to raise up to US$217m in its upcoming India IPO. The deal will be run by Ambit, Citigroup, ICICI Securities and Kotak Mahindra.
• India Shelter Finance (ISF) is a retail focused affordable housing finance company. Between FY21-23, the firm registered a two-year CAGR growth of 40.8% in terms of AUM, according to CRISIL. 
• Its target segment comprises self-employed customers, focusing on first time home loan takers in the low and middle income group in Tier II and Tier III cities in India. 

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.

• Continuum Green Energy
• Lenovo

• National Securities Depository Limited (NSDL) is looking to raise around US$400m in its India IPO. 
• It is the largest depository in India in terms of number of issuers, number of active instruments, market share in demat value of settlement volume and value of assets.
• In this note, we talk about the positive aspects of the deal.

• Recently awarded “Maharatna” status, only 12 companies, FY24 is first full year for this
• Growth is steady, with good returns, and major improvement in credit metrics
• Its 4.77% dividend yield is incredibly high and about 3x higher than peers

• India-based Credgenics, a loan collection services firm, has raised US$50 million in its series B funding round led by Accel and WestBridge Capital.
• It will use the new capital to diversify its offerings and reach other client segments. Credgenics also looks to expand its international business.
• The company’s geographical expansion will primarily focus on countries such as Indonesia and Vietnam, which share similarities with India’s credit market.

• All the APAC markets we cover (Nifty50, HSI, Nikkei225, Kospi200, S&P/ASX200) are pulling back and some of them have been doing so for 3 weeks.
• In this insight we want to offer a re-cap of all the MRM support levels and probabilities for the APAC markets above, after the August 16th Close.
• Check our previously published single-market insights for deeper analysis and related investment ideas: Nifty50, HSI, Nikkei225, Kospi200, S&P/ASX200.

• National Securities Depository Limited (NSDL) is looking to raise around US$400m in its India IPO. 
• It is the largest depository in India in terms of number of issuers, number of active instruments, market share in demat value of settlement volume and value of assets.
• In this note, we talk about the not-so-positive aspects of the deal.

• InterGlobe Aviation Ltd (INDIGO IN)’s co-founder, Rakesh Gangwal and his wife, aim to raise up to US$450m through the bulk sale of 15.6m shares (4% of TSO).
• He had earlier stated his intention to pare down his stake after a long drawn battle with his co-founder Rahul Bhatia. He last sold in Sep 2022 and Feb 2023.
• In this note, we will talk about the placement and run the deal through our ECM framework.

• SBFC Finance Limited (1547353D IN) raised around US$131m in its India IPO, after the deal was priced at INR57/share, the top end of its IPO price range.
• SBFC Finance is a systematically important, non-deposit taking non-banking finance company (NBFC-ND-SI), offering secured MSME Loans and Loans against Gold. 
• In this note, we will talk about the demand for the deal and other trading dynamics.

• Fedbank Financial Services (0702066D IN) is looking to raise about US$200m in its upcoming India IPO.
• Fedbank Financial Services (Fedbank) is a retail-focused non-banking finance company (NBFC) promoted by The Federal Bank Limited.
• As per CRISIL, the firm had the second lowest cost of borrowing across the MSMEs, gold loan and MSME & gold loan peer set in India in FY23. 

• IDFC First Bank is now at USD7bn market cap, and it will now be seen by more than before
• Net interest income rising from INR27.5bn to INR37.5bn is amongst best in India banking
• Credit metrics improving dramatically, but credit costs have yet to trail lower – to come

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 Ports & Special Economic Zone
• China Jinmao Holdings
• Road King Infrastructure

• The review period for the September rebalance of the S&P/ASX family of indices ends on Friday. There will be a lot of changes across the family.
• Hang Seng Indices will announce the changes to the Hang Seng Index, Hang Seng China Enterprises Index, Hang Seng TECH Index and the HSCI after market close on Friday.
• There were HUGE inflows to onshore China focused ETFs during the week with CSI 300 Index, CSI 500 Index and SSE50 Index ETFs taking in the largest amounts.

• Rainbow Children’s Hospital (RAINBOW IN) recorded 21% YoY revenue growth in Q1FY24 to INR2.9B, driven by increase in pediatric surgical cases and deliveries, and addition of new bed capacities.
• Lower occupancies in new hospitals and higher expenses impacted profitability. In Q1FY24, EBITDA margin declined 407 bps YoY to 30.5%, while net profit margin contracted 190 bps YoY to 14.4%.
• The company will add 270 beds in the current financial year. By FY27, RCML aims to increase its bed capacity by 56% to 2,585 from current bed capacity of 1,655.  

• Stylam Industries (SYIL IN) reported a good quarter on the profitability front, with PAT up 32.4% YoY but revenues down 4% YoY. 
• Exports showed degrowth temporarily by 11% YoY due to a slowdown in Europe and other key markets, but the company guided an improvement in subsequent quarters. 
• Trading at 20x/16x FY24e/25e, the stock is not a steal, but with a remarkable growth profile of 20-25% CAGR, we see tremendous potential as a multibagger for the company.

• Suzlon Energy (SUEL IN) is looking to raise INR20bn (US$240m) from its QIP, with proceeds used to pay down debt.
• The firm has struggled with a debt issue in the past, most recently undertaking a rights issue in 2022 to raise INR12bn (US$150m). 
• With the proceeds from this deal, the firm should enter into net cash territory.

• TVS Supply Chain Solutions (1915741D IN)  is one of the leading Indian supply chain solution companies in India with an approximate market share of 7%.  
• Around 70% of the operations come from outside India, however the foreign subsidiaries are not doing pretty well. Moreover, the profits that were only posted in F23 look unsustainable.
• Other concerns which are not to be overlooked, relate to impairment of assets, levered balance sheet, pricey acquisitions, disposal of fixed assets, high remuneration to promoter, etc.