Daily Brief India: Adani Enterprises, ABB India Ltd, Kolte Patil Developers, Hopson Development, Nesco Ltd, Rajshree Polypack and more

• On 8 February, MSCI announced special treatment for the Adani names in its indices, discussed in Adani Group – MSCI Will Treat Very Adani Funds as a Very Special Case. 
• Late on 15 February they came out with a revision of their implementation – which was problematic because some stocks had gone limit down many days in a row. 
• The stocks responded. But it clearly isn’t an easy implementation, and it clearly isn’t over. 

• ABB India Ltd (ABB IN), Adani Wilmar (AWLTD IN), Canara Bank (CBK IN), Page Industries (PAG IN) and Varun Beverages Ltd (VBL IN) will be added to the index.
• Bandhan Bank Ltd (BANDHAN IN), Biocon Ltd (BIOS IN), Gland Pharma Ltd (GLAND IN), Mphasis Ltd (MPHL IN) and Paytm (PAYTM IN) will be deleted from the index.
• Given the large drop in the stock prices of the Adani Group companies, capping changes will result in buying on all non-F&O stocks in the index.

• Kolte Patil reported weaker than expected Q3FY23 accounting earnings due to slight delay in arrival of OC for some projects. However, sales velocity and business development activity was robust.
• Reported Q3FY23 earnings had weak margins due to revenue contribution from two low-margin projects.
• Q4FY23 is on track to be strong both in terms of reported earnings (which depends on the timing of OC) and sales velocity.

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. Alam Sutera Realty
2. China SCE
3. China Jinmao Holdings
4. Lifestyle International Holdings
5. Geely Auto

and more…

• BEC revenues continue to match the pre-COVID level suggesting that the business has now normalized fully post-COVID. COVID led shift in working habits has had no structural impact.
• IT Office Leasing revenues grew 6%+ QoQ, led by the improvement in occupancy rates. Profitability also improved led by operating efficiencies. 
• BEC’s EBIT margin came in significantly lower than expected due to one-off expense of INR 15cr for demolition of a factory shed to build a new exhibition hall.

• Q3FY23 tends to be the weakest quarter seasonally. Volume de-growth was -10% QoQ, in line with the expectation as per historical seasonality trend.
• Q4FY23 is all set to be a strong quarter. Management is confident of closing FY23 as per the previously stated revenue and margin guidance.
• The new value-added segment, Barrier Packaging, has started to contribute meaningfully to the revenue. Tube Laminates, another value-added segment, will also start to contribute soon.