In today’s briefing:
- Hero Motocorp (HMCL IN) | Brace for Disappointment
- Seven & I – The US Is About to Hit the Brakes
- BASF India: Catalyzing Chemistry and Possibilities
- Observability: ServiceNow Acquisition Threatens Dynatrace and Elastic
- NTGR: Hotspot of a Preview
- Ciena Corporation: Initiation of Coverage – Partnership With MSAR & Other Drivers
Hero Motocorp (HMCL IN) | Brace for Disappointment
- Hero Motocorp (HMCL IN) has been outperforming the Nifty 50 over the last 6M
- Our flash checks done in the south suggests the outperformance may not last long
- Failure of a model, high competitive intensity, and changing preferences can again lead to high inventory levels leading to a possible correction in wholesales post-festive season.
Seven & I – The US Is About to Hit the Brakes
- With OP up by 22% YoY to beat the consensus estimate by ¥2.0bn, Seven & I turned in a strong 2QFY23 along with a considerable upgrade to FY23 guidance.
- However, the post-earnings price reaction seems to suggest that the market is a bit worried about the short-term performance of Seven & I Holdings (3382 JP)’s US convenience store business.
- In addition, the struggling non-core businesses whose future remains undecided could also be weighing in on Seven & I’s price performance.
BASF India: Catalyzing Chemistry and Possibilities
- Pivoting the world’s biggest transformation; addresses chemistry needs of the new economy
- These new themes will outgrow world GDP growth – perhaps almost >2x
- BASF is systematically aligning to the emerging trends, investing in future technologies and is integrating all of this sustainably in its value chain
Observability: ServiceNow Acquisition Threatens Dynatrace and Elastic
- ServiceNow acquired Era Software this week to extend its presence in the observability and log management space.
- The deal is most threatening to DT/ESTC (we advocate as longs) and SPLK (short) because of ServiceNow’s ability to bundle functionality for larger deals.
- That said…the observability space remains one of the hottest in digital transformations, and the deal is on net, more validating than threatening to DT/ESTC.
NTGR: Hotspot of a Preview
- NTGR is relying on the back-to-school shopping season to help sell through some of its lingering wireless router inventory as it transitions to higher end models
- We continue to believe the retail market remains challenging for NTGR and the Company could have experienced difficulty in selling down inventory to desired levels
- During the third quarter NTGR used Prime Day as an opportunity to reduce inventory for certain Nighthawk wireless routers. We expect the same again during Prime Day on October 11
Ciena Corporation: Initiation of Coverage – Partnership With MSAR & Other Drivers
- This is our first report on Ciena Corporation, a networking systems, services and software player catering primarily to the telecom industry.
- In spite of the elongated lead times and supply chain challenges, the strong secular demand trends have not shown any sign of abating.
- In spite of the supply challenges, Ciena had a record quantity of quarter for its WaveLogic 5 shipments.
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
