Daily Brief Financials: Cuscal Limited, Life Insurance of India, HDFC Limited, NIFTY Index, S&U PLC and more

• Cuscal Limited (1229Z AU) is looking to raise US$234m in its upcoming Australia IPO. 
• Cuscal is an authorized deposit-taking institution (ADI) in Australia that primarily provides financial infrastructure and payment services in Australia. 
• In this note, we will talk about the positive aspects of the deal.

• LICI has significant 62% market share of new business premiums with 92% coverage of all districts in the country, compared with 72% for all of the private sector combined.
• Long track record of operations since 1956 and strong growth, with recent years seeing exceptional strength in net profit, and with ROE reaching 148%.
• Well maintained SG&A costs with revenue growth exceeding policy benefits growth, with strong investment returns, especially in FY23. 1Q24 also shows continued operational strength, in a hugely under-penetrated market.

• HDFC Life Insurance (HDFCLIFE IN) reported 2Q24/ 1H24 results last week which were decent given the context: moderating VNB Margins amid changing product-mix and growth outlook positive for remaining year.
• The strong growth at the HDFC Bank counter is the key positive, though expected, on back of the HDFC Bank-HDFC merger.
• We value HDFC Life (HDFCL) at ~2.4x FY25e P/EV, implying a ~5% upside to current price. HDFCL is fairly valued in our view.

• Cuscal Limited (1229Z AU) is looking to raise US$234m in its upcoming Australia IPO.
• Cuscal is an authorized deposit-taking institution (ADI) in Australia that primarily provides financial infrastructure and payment services in Australia.
• In this note, we will talk about the not so positive aspects of the deal.

• The NIFTY 50 Index closed last week up at 19751.05, 2nd week up, in synch with the S&P 500 INDEX WEEKLY bounce.
• The index has not moved up much from a price perspective, weak bounce. Resistance levels must be monitored: if the index rallies this week it could pull back next week.
• The trade orientation is to go SHORT once the NIFTY reaches Q2/Q3 OVERBOUGHT resistance levels in the 20167-20230 price area, this week. SHORT Trade at Close is also valid.

Advantage and Aspen both performed well and broadly in line with our expectations. PBT in H124 was £21.4m, 2% above H123. Impairments were better than expected, particularly at Aspen, but costs were affected by the inflationary environment and a more than twofold increase in finance expenses. Profit after tax came in at £16.2m, 5% below H123 as the tax rate rose. The group declared a dividend of 35p/share, in line with H123. S&U also increased its funding facilities by £70m to £280m in anticipation of future growth. Graham Wheeler, CEO of Advantage, is to retire at the beginning of FY24 and will be replaced by Karl Werner, former managing director of Motor, Aldermore Bank and deputy CEO of MotoNovo Finance.