India

• Nodwin Gaming said it has secured US$28 million in funding from new and existing investors to grow its gaming and esports ecosystem in India.
• With the round, Nodwin, a subsidiary of media platform Nazara Technologies, said its post-money valuation has reached US$349 million. It added that its revenue has grown by a compound annual growth rate of 68% in the last 2 years.
• Nodwin didn’t disclose the names of five investors participating in this round.

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.

• Lenovo
• Vedanta Resources
• Xiaomi Corp

• CCL Products India (CCLP IN) is a coffee manufacturing company and has presence in both India and abroad.
• The company has seen an appealing growth in its top-line, growing at a three year CAGR of 22% till F23.
• However, when it comes to the forensics, there are several concerns, especially with its treatment of investment in subsidiaries and disclosures in the financials.

• JSW Infrastructure (5978490Z IN) is looking to raise up to US$341m in its upcoming India IPO. 
• The deal will be run by JM Financial, Axis Capital, Credit Suisse, DAM Capital, HSBC, ICICI Securities, Kotak and SBI Capital.  
• JSW Infrastructure (JSWI) is the fastest growing port-related infrastructure company in terms of growth in installed cargo handling capacity and cargo volumes handled during FY20 to FY22, according to CRISIL. 

• Jupiter Life Line Hospitals (0372574D IN) is looking to raise about US$135m in its upcoming India IPO. The deal will be run by ICICI Securities, Edelweiss Financial Services and JM Financial.
• Jupiter Life Line Hospitals (JLLH) is among the key multi-specialty tertiary and quaternary healthcare providers in the Mumbai Metropolitan Area (MMR) and western region of India, according to CRISIL. 
• Its hospitals function on an ‘all-hub-no-spoke’ model with each hospital being a full-service hospital, operating independently and offering services such as diagnostics to surgery and rehabilitation.

• R R Kabel (2333180Z IN) is looking to raise about US$200m in its upcoming India IPO. The deal will be run by Axis Capital, Citigroup, HSBC and JM Financial.  
• R R Kabel is an Indian consumer electrical company, which primarily sells wires, cables and fast moving electrical goods (FMEG). 
• According to Technopak, the company is the fastest growing consumer electrical company among its peers in India, growing at a CAGR of 33.0% between FY20 and FY22 (31st Mar 2022). 

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.

• Golden Eagle Retail
• Vedanta Resources

• KPIT reported a strong Q4FY23 with 8.5% QoQ growth in CC (Constant Currency) terms. Q4FY23 EBITDA margin at 19.1% came in higher than 18.5%+ expected.
• Deal TCV came in highest ever helped by a mega deal of INR $250mm. Even excluding the mega deal, the deal TCV was healthy at $173mm vs $150mm+ typically.
• KPIT has guided for an upbeat FY24. FY24 revenue growth is guided to be 27-30% in CC terms. FY24 EBITDA margin is guided at 19-20% vs 18.9% in FY23.

• Top longs have been India and Australia. Top shorts HSI and Korea. Korea’s bearish wedge is maturing and stands out as macro risk.
• Turned neutral the Nikkei above 29,200. 29,500 represents from buy support to threaten 31,000. Near term top at 31k for a pullback try.
• USD upside breakout is front running a softer equity bias in Asia for June. SPX 4,200/20 top zone throw over probable.

• Zydus Lifesciences Ltd (ZYDUSLIF IN) recorded 32% growth in revenue to INR50B in Q4FY23, driven by 58% YoY growth in US formulation business. India business revenue grew 11% YoY.
• US business growth was driven by volume expansion in existing products and new launches. The company has launched eight new products in the US during the quarter.
• Going ahead, growth is expected to moderate, due to high base effect. The company expects single-digit growth in the US business in FY24, slower than 28% growth recorded in 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. Melco Resorts & Entertainment
2. Hopson Development
3. China Jinmao Holdings
4. Lifestyle International Holdings
5. Geely Auto

and more…

• BAF ended FY23 with a PAT of INR 11508cr in line with our estimate of INR 11500cr+. BAF has guided for 5.1%+ ROA and 25%+ growth for FY24.
• Despite heightened competitive intensity from banks, Bajaj Finance Ltd (BAF IN) has managed to grow well as per its targeted levels without comprising on profitability. 
• BAF’s growing omnipresence via its digital platforms, branch expansion and deepening of product suite across branches will be key drivers of its next phase of growth.

• Vedant Fashions (MANYAVAR IN)‘ Promoter is looking to raise US$239m via trimming a 7% stake in the firm. 
• The selldown here is to meet the minimum public shareholding requirement of 25% set by SEBI.
• The deal would be a large one to process with the base deal alone representing 187 days of the firm’s three month ADV.

• Nexus Select Trust (NST IN) raised around US$391m in its India IPO. The market value of its assets stood at INR234bn (US$2.9bn), of which INR211bn (US$2.6bn) was from its retail assets.
• NST is a REIT with a portfolio of 17 Grade A urban consumption centers. It is backed by Blackstone.
• We have looked at various aspects of the deal in our previous note, in this note, we talk about the demand and trading dynamics.

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

• In this insight, we take a look at the names leading the race to become ADDs/DELs for the NIFTY 50 and NIFTY 100 indices in the September 2023 rebalance.
• The HDFC Limited (HDFC IN) – HDFC Bank (HDFCB IN) merger could complete earlier than previously expected, triggering intra-review index replacements.
• Separately, I have presented some interesting new trading ideas involving some of the index change candidates, and I discuss the status of pre-existing trade ideas.

• Edelweiss’ stock was down over -5% yesterday. The reason for downfall seems to be a media article which states that three large brokers are being investigated for money laundering activities.
• We think Edelweiss is not one of them as the article mentions that these brokers are being investigated since their involvement in the NSEL scam, where Edelweiss had no involvement.
• In fact, Edelweiss was among the few brokers that had come out unscathed in the NSEL scam, as it detected early on that there was some wrongdoing happening at NSEL.

• IN Q4FY23, Cipla Ltd (CIPLA IN) reported highest ever US business revenue of $204M, up 27% YoY and 5% QoQ, driven by expansion in market share of key launches.
• Lead peptide asset Lanreotide injection, launched in Q4FY22, is consistently gaining market share. The product currently has market share of 17%, up from 14.1% in Q3FY23 and 9.6% in Q2FY23.
• Ex-COVID, India business revenue increased 16% YoY, driven by chronic branded prescription portfolio. FY23 marks the second consecutive year of market beating growth of Cipla’s chronic portfolio.

• Five Star Business Finance (FIVESTAR IN) raised around US$190m in its India IPO in Nov 2022.
• Five-Star Business is a non-banking financial company (NBFC-ND-SI) that provides secured business loans to micro-entrepreneurs and self-employed individuals.
• In this note, we will talk about the lock-up dynamics and updates since our last note.

In our view, Tata Motors’ Q4 and FY 2022-23 results were stronger than expected, with all business segments performing well. Most importantly, JLR improved strongly on the back of the easing semiconductor shortage situation. It is encouraging to see a solid and consistent improvement from the company throughout the year, from a very weak Q1 to a robust Q4. Earnings and cash flows were better than expected. We view positively the company’s efforts to rebrand itself into the sub-brands of Range Rover, Defender and Discovery. We note that Range Rover is viewed positively in the luxury space in emerging markets.

Vedanta Ltd has released disappointing Q4/22-23 results. Revenue fell 4.75% y-o-y while reported EBITDA decreased 30%, mainly due to lower prices of metals and minerals, along with higher costs. Production was weak. However, leverage ratios are acceptable, with Pro-forma Gross Debt/EBITDA and Net Debt/EBITDA of 3.5x and 2.9x, respectively, in April 2023.

Production guidance is essentially flattish, with no significant growth projected in the key segments that contribute the most to EBITDA, namely zinc, oil & gas and aluminium. Refinancing risk over the next one year remains the key risk.

• Dr. Reddy’s Laboratories (DRRD IN) announced mixed Q4FY23 result, with revenue beating consensus and net profit missing expectations. Both revenue and net profit grew YoY but declined sequentially.
• North America grew 27% YoY (but declined 17% QoQ) to INR25.3B, driven by new product launches, growing market share in certain existing products, and favorable Fx movement.
• Revenue from India business increased 32% YoY and 14% QoQ to INR12.8B, driven by favorable price variance, new product launches including acquired/in-licensed products, and non-core brand divestments.

• Our 2023 outlook remains unchanged as we continue to expect broad-based consolidation with $93 capping upside on MSCI ACWI (ACWI-US), while important downside targets are $86, $84, and $75-77.
• We still recommend tactical overweight to defensives including gold miners and MSCI ACWI Staples, Health Care, and Utilities, given ACWI-US remains near the top of our expected 2023 trading range.
• We are now starting to see broad-based improvement, particularly in Japan and India, but also in Taiwan and South Korea. Most of today’s buy recommendations are cyclicals in these countries.