India

• Power Finance, Astral, IDFC First Bank, Cummins India, HDFC Asset Management, Ashok Leyland, Polycab India and Supreme Industries have all run up over the recent past and have investor attention.
• The increase in market cap has put the stocks on active manager radars and could also result in the stocks being added to global indices in the near future.
• We take a look at the positioning on the stocks and recommend pair trades to reduce market risk while trying to capture alpha.

• KPIT reported a strong Q1FY24 with 7.1% constant-currency (CC) revenue growth and EBIDTA growth of 13.3% QoQ. EBITDA margin expanded by 90bp QoQ to end at 20%.
• KPIT is upbeat about the demand environment. OEMs are continuing to spend heavily on new technologies. KPIT itself is investing significantly in R&D, especially Generative AI.
• Deal wins was healthy at $190mm vs typical run-rate of $150mm+. The pipeline is also healthy across practices.

• TVS Supply Chain Solutions (1915741D IN) is looking to raise up to US$110m in its India IPO, after downsizing from an earlier float of up to US$500m.
• TVS SCS is an Indian supply chain logistics solution provider which also has global capabilities and network across the value chain with cross deployment abilities, according to RedSeer. 
• In our previous note, we looked at the company’s past performance. In this note, we talk about RHP updates, undertake a peer comparison and provide our thoughts on valuation.

• In Aug 2022, Zomato completed the acquisition of Blinkit’s outstanding shares via issuing its own shares. These issued shares will come up for lockup release on 10th Aug 2023.
• Zomato is one of two leading food delivery app operators in India. Its acquisition of Blinkit marked its foray into the instant grocery segment.
• In this note, we will talk about the lock-up dynamics and recent updates.

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
• Softbank Group

• Sun Pharmaceutical Industries (SUNP IN) reported 11% YoY revenue growth to INR118B in Q1FY24, mainly driven by the U.S. business. EBITDA margin expanded 109bps to 27.9%.
• Net profit declined 2% YoY to INR20B due to certain one-off charges amounting to INR3B. Excluding the exceptional items, adjusted net profit grew 14% YoY to INR23B.
• With 26 marketed products globally, Sun Pharma is betting big on specialty products. Specialty pipeline includes 5 molecules undergoing clinical trials. Specialty R&D accounts for 35% of total R&D spends.

• Triumph-Bajaj midsize bike melds the expertise of Triumph Motorcycles and Bajaj Auto Ltd (BJAUT IN)  for top-tier quality, targeting the midsize market with dual-brand prowess.
• Triumph-Bajaj sparks fervour with strong inquiries and bookings in tier-two and tier-one locations, though supply constraints present challenges.
• Triumph stands out targeting the 30+ age group seeking premium leisure riding, employing exclusive dealerships and unique pricing to enhance ownership experience.

• Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
• We assess Samvardhana Motherson’s (SM) ESG as “Adequate”, in line with its “Adequate” Environmental, Social and Governance scores. Controversies are “Immaterial” and Disclosure is “Weak”.
• The score is based on the ESG reporting of parent Motherson Group (encompassing ultimate parents Samvardhana Motherson International Limited and Motherson Sumi Systems Limited), which reports ESG on a consolidated level without providing meaningful details at the SM level.

• Concord Biotech Ltd (658823Z IN) is looking to raise around 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 undertake a peer comparison, and share our thoughts on valuation.

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. Country Garden Holdings Co
2. Vedanta Resources
3. China Jinmao Holdings
4. Geely Auto
5. First Pacific Co

and more…

• Investors such as Peak XV’s Surge, Blume Ventures, and Mathew Cyriac, former head of Blackstone India, have backed the US$7.3 million round of India-based Ethereal Machines.
• Based in Bangalore, Ethereal Machines uses proprietary Computer Numerical Control machines, such as drills and mills, to produce precision engineering components for aerospace, automobile, and healthcare use.
• The company said that its offerings reduce costs by 30% and production lead times by 40%.

The Asia Monthly focuses on providing updates on recent events, information on new issues and spread movements, as well as summarising our top picks. The Asia Monthly is intended to broaden investors’ understanding of the Asian USD high-yield market.

• The NIFTY Index has been falling for 2 weeks and is reaching mildly OVERSOLD territory. If this was a retracement during the main rally, it may be time to BUY.
• The Market Reversal Matrix’s shows a bullish pattern, the time+price combined probability of success for LONG trades from current prices, after 2 weeks down, is >66%.
• Price area to go LONG: 19400 to 18792, you can go LONG this week and also next week, if down (CC=-3).

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.

• Country Garden Holdings Co
• MGM China Holdings
• Vedanta Resources

• SBFC Finance Limited (1547353D IN) IPO opens for subscription this week.
• The company has shown strong operations in F23, led by growth in overall business, productivity, profits on the back of controlled credit costs.
• There are however few cautions that warrant attention, which includes the litigations, attritions, write offs, etc.

• Concord Biotech Ltd (658823Z IN) is looking to raise around 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).
• As per F&S, Concord was one of the leading global developers and manufacturers of select fermentation-based APIs across immunosuppressants and oncology in terms of market share, based on FY21 volume.

• In this insight, we take a look at the Potential ADDs/DELs for the BSE SENSEX, 100, and 200 Indices in the December 2023 Rebalance.
• In July, we saw the deletion of HDFC Limited (HDFC IN) from several indices in this family which triggered multiple intra-review index changes.
• At present, I do not see any changes for the SENSEX index but I see seven ADDs/DELs for BSE 100 and five ADDs/DELs for BSE 200.

• Concord Biotech Ltd (658823Z IN) is amongst the few fermentation-based API manufacturing companies globally. The company commanded market share of 20%+ by volume in 2022 across identified fermentation‐based API products.
• Concord Biotech IPO opens for subscription on August 4. The IPO consists of offer for sale of 21M shares by Helix Investment Holdings at a price band of INR705–741/share.
• Large and growing addressable market, sizable market share, niche and limited competition offering, consistent growth and profitability, and reasonable valuation make the IPO worth of subscribing.

• SBFC Finance Limited (1547353D IN) is looking to raise up to US$131m in its India IPO. 
• 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 our previous note, we looked at the company’s past performance. In this note, we talk about RHP updates, undertake a peer comparison and provide our thoughts on valuation.

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.

• Vedanta Resources

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
• Gajah Tunggal
• Indika Energy
• Road King Infrastructure
• Sands China

• Sula Vineyards (SULA IN) is one of the leading wine producers in India.  
• Focus on premiumization, market leadership, and industry prospects are attractive. 
• However, high working capital, recent resignations, and customer concentration along with market’s high valuations make it a watch-list candidate.

Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
We view Adani Transmission Limited’s ESG as “Adequate”, in line with the Environmental and Social pillars. Governance is “Weak”. Controversies are “Material”, but Disclosure is “Strong”.

• R R Kabel (2333180Z IN) is looking to raise about US$200m in its upcoming India IPO. 
• R R Kabel is an Indian consumer electrical company, which primarily sells wires, cables and fast moving electrical goods (FMEG). 
• R R Kabel registered strong earnings growth on the back of growth in the volume of wires and cables sold. However, the lack of commodity hedging affected the firm’s margins.  

• Using the current index methodology throws up 5 changes for the NSE Nifty Next 50 Index (NIFTYJR INDEX) in September. Turnover will be BIG.
• Using the proposed index methodology throws up 11 changes for the NSE Nifty Next 50 Index (NIFTYJR INDEX) in September. Turnover will be HUGE.
• The market consultation being put on hold could indicate pushback from index users or the possibility of F&O contracts being introduced on some of the non-F&O index constituents.

• Cipla Ltd (CIPLA IN) reported better-than-expected Q1FY24 result, with revenue growing 18% YoY, driven by India and the U.S., both of which reported record high revenue.  
• Stellar performance across all markets drove EBITDA to multi-quarter highs. EBITDA margin expanded 230 bps YoY and 310 bps QoQ to 23.6%. Net profit increased 45% YoY to INR10 billion.
• Cipla expects the average revenue run rate of $210–215M from its U.S. business in the coming quarters. For FY24, management has raised EBITDA margin guidance to 23% from 22%.