India

• Deepak Nitrite (DN IN) has emerged as one of the key players in the chemical intermediate industry over the last few years.
• The company’s emergence saw a structural and more or less a positive change in the balance sheet health and overall scheme of operations.
• The green flags include strong balance sheet position and surging return ratios, while the red flags include poor cash transmission and margin losses lately.

• This is now the third Int’l Compass/third week in a row where we are discussing an increasing number of country indexes experiencing bullish 3.5-9-month downtrend reversals.
• Importantly, all of the previously mentioned indexes are holding above their breakout levels (i.e., there has yet to be any failed breakouts).
• Now, the U.S. dollar (DXY) is starting to show early signs of topping. We continue to believe that global equities are going through a bottoming process.

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. Pakuwon Jati
2. Softbank Group
3. Lenovo
4. China SCE
5. Kwg Property Holding

and more…

• With Q1FY23 PAT at INR 925cr+, LICHF is on track to beat our prior estimate of INR 3600cr+ for FY23 PAT.
• We now project that LICHF can do INR 3850cr+ PAT in FY23, implying that at the current market cap of INR 21,000cr, LICHF is trading cheap at <5.5x FY23 P/E.
• Credit cost for the quarter was slightly higher at annualized 0.5% of AUM, however, excluding slippages from the OTR book, it was in line with long-term average of around 0.2-0.3%.

• Typically net interest margins and loan volume are what matter most for banks
• ICICI is showing strength in both core financial metrics, but also in credit costs
• Of the large 3 banks in India, ICICI may continue to show the best marginal deltaCI

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.

• Bharti Airtel
• Guangzhou R&F Properties
• Indika Energy

• Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
• Placements continued to take center stage this week, beginning with Uber’s clean-up sale of Zomato.
• Socar launched its one-day bookbuild earlier in the week. We continued looking at the upcoming deals in our pipeline. 

• Apart from being known as one of the most innovative companies in today’s times, 3M also has a strong reputation of successful restructuring and cost management which has helped the industrial conglomerate survive through many challenging business cycles.
• The company continues to benefit from strong spending discipline, restructuring savings, and selling price actions.
• We provide the stock of 3M Company with a ‘Hold’ rating with a revision in the target price.

• Phonepe Pvt Ltd (1732974D IN) runs a digital payment and technology App in India and is currently the leader in terms of UPI transactions processed. 
• Our channel feedback suggests the possible disruption from initiatives like ONDC to be positive for payment apps like PhonePe, with the possible acceleration towards the SuperApp Journey. 
• Revenues are always growing, and so are losses. With ONDC, there is a possibility this may change faster than anticipated and hence warrants close attention. 

• Sai Silk Kalamandir (SSKL IN) is looking to raise about US$150m in its upcoming India IPO. The deal will be run by Motilal Oswal, Edelweiss and HDFC Bank. 
• Sai Silk Kalamandir (SSK) is one of the largest retailers of ethnic apparel in South India, particularly in sarees, according to Technopak. 
• Through its four store formats, it offers ethnic and value fashion products to various segments across different price points. As of 31 May 2022, it has 46 network stores. 

• Uber (UBER US) is looking to raise US$420m in its share sale in Zomato (ZOMATO IN). The selldown will be a clean-up sale.
• Uber had earlier inherited its stake in Zomato in 2020 when it sold UberEats India to the latter. 
• We had earlier flagged the possibility of a selldown given that most of Zomato’s investors would come off their respective one-year lockups. 

• Apna (1826169D IN) ‘s is India leading networking and jobs platform primarily targeted towards the +250 million grey and blue collared workers, who usually are not on Linkedin. 
• Channel feedback is mixed, Apna is not the only platform of choice. Community initiatives and vernacular interface are key differentiators along with simplicity. 
• Profitability could remain a challenge, Monetisation is work in progress. The model is interesting, but making money off the bottom of the pyramid has never been easy. 

• Tesla had been in the process of carrying out upgrades which resulted in a lengthy shutdown of its Shanghai factory.
• The company faced its fair share of challenges but had a highly resilient quarter and managed to produce an all-around beat.
• The most significant accomplishment was setting production records in Shanghai and Fremont in June.

• As a legacy tech company, IBM may have seen a slowdown in its growth trajectory but its acquisition-led growth approach continues to work.
• With this performance, the company is maintaining its model of mid-single-digit revenue growth and a double-digit performance in IBM Consulting.
• In this report, we have carried out a fundamental analysis of the historical financial statements of the company.

• Netflix has had a bad 2022 so far.
• The company continued with its trajectory of subscriber losses in the most recent quarter and lost another million subscribers.
• Given the current uncertainty levels, we give Netflix a ‘Hold’ rating with a revised target price.

• Groww (1573648D IN) is a wealth management and investment platform designed to simplify investing especially for first-time investors. 
• Channel feedback indicates Groww’s simple UI, and lower cost/fees as the primary reasons for them investing via the platform. 
• Revenues have seen a COVID-led sharp jump, and growth with low marketing expenses and operational profitability offer a compelling narrative. 

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.

• Pan Brothers
• Sino-Ocean Service
• Vedanta Resources

• Route Mobile operates as a cloud communication provider to enterprises, OTT players and mobile network operators. The company got listed on the bourse in September 2021.
• Route is a growing company, and derives a significant chunk of its business internationally.
• Route Mobile is a story centralized by grey areas, be it accounting or management’s stance on contingent liability, or impairment in investments.

• ICICI Bank Ltd (ICICIBC IN) & Kotak Mahindra Bank (KMB IN) actively covered by a large number of analysts
• Significant issues of regulatory penalties on Kotak Bank subsidiary & major theft in a currency chest of ICICI Bank. No clarification from both banks
• Instead of demanding explanations from the banks during the 1Q concalls, media and analysts chose to remain silent

• Amber Enterprises India (AMBER IN)  is one of the key ODM players in the RAC and related industry.
• However, there are couple of puzzling forensic takeaways, especially in F22 where company had reported high growth in numbers.
• These primarily include the rationale behind debt increase, puzzling subsidiary numbers, discrepancy in inventory verification, etc.

• Bajaj Finance Ltd (BAF IN) [“BAF”] reported Q1FY23 PAT of approx. INR 2600cr which puts it on track to post INR 11,000cr+ PAT in FY23, in line with our projections. 
• BAF is back on its pre-COVID growth trajectory as also highlighted in our prior note. Q1FY23 AUM growth came in at 6.2% QoQ and annualized ROE is back to 20%+.
• The strong Q1FY23 earnings is despite elevated competition in the marketplace which led BAF to forgo business where margin profile was not attractive.

• DailyHunt (1449267D IN) is one of India’s leading vernacular content curation and engagement platforms and also one of the most funded content startups. 
• Channel interactions indicate a challenging competitive position that requires constant cash burn. 
• In terms of financials, there is no sight of profitability in the near term. Unless that changes, it is best to remain cautious. 

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. Lifestyle International Holdings
2. Vedanta Resources
3. Tata Motors Ltd
4. China South City
5. Seazen (Formerly Future Land)

and more…