In today’s briefing:
- Adani Group – MSCI Will Treat Very Adani Funds as a Very Special Case
- Mankind Pharma Pre-IPO – Thoughts on Valuations
- HDFC Bank: Q3FY23 Growth Was Somewhat Muted, but Long-Term Growth Potential Remains Intact
- KPIT: On Track to Beat FY23 Guidance
- LICHF: One-Off Discretionary Provisioning Impacted Q3FY23, But Q4FY23 Is On Track to Be Strong
Adani Group – MSCI Will Treat Very Adani Funds as a Very Special Case
- Shortly after the Hindenburg Report came out, MSCI said it was seeking feedback from clients. They got it, and last night announced they would conduct a special review.
- They concluded some holders heretofore in the float might not be float. They announce results tonight. That can only be bad news for Adani Group companies.
- We don’t know numbers yet, but passive inclusion was one reason why stocks skyrocketed. Few of the companies will be unaffected. Some could be heavily affected.
Mankind Pharma Pre-IPO – Thoughts on Valuations
- Mankind Pharma is looking to raise around US$1bn in its upcoming India IPO.
- MP is a pharmaceutical company engaged in developing, manufacturing and marketing a range of pharmaceutical formulations across various acute and chronic therapeutic areas, as well as several consumer healthcare products.
- We have looked at the company background and undertaken a peer comparison in our previous notes. In this note, we will talk about valuations.
HDFC Bank: Q3FY23 Growth Was Somewhat Muted, but Long-Term Growth Potential Remains Intact
- HDFC Bank (HDFCB IN) continues to focus on growing its offline distribution network and added 684 new branches in Q3FY23, taking the total to 7183.
- It is also focusing on niche under-penetrated segments like Gold Loans and Wealth Management. Its Payment Acceptance Points network has also seen rapid growth.
- QoQ loan growth was somewhat muted, largely due to underwhelming growth on the corporate side as pricing in the marketplace is not as remunerative due to elevated competition.
KPIT: On Track to Beat FY23 Guidance
- KPIT reported strong Q3FY23 earnings with organic revenue growth of 24.6% YoY and 4.9% QoQ. Including Technica acquisition, revenue growth was 17.3% QoQ and 31.9% YoY in $ terms.
- EBITDA margin stayed steady QoQ at 18.5%. Deal wins were strong with Q3FY23 TCV of $272mm. KPIT is on track to beat its prior FY23 growth outlook.
- Despite caution in the IT services sector, KPIT is seeing robust demand as automotive OEMs continue to spend on new automotive tech R&D.
LICHF: One-Off Discretionary Provisioning Impacted Q3FY23, But Q4FY23 Is On Track to Be Strong
- LICHF reported Q3FY23 earnings that was lower than expected due to the increase in provisioning. LICHF reported annualized credit cost of 1.2% vs expected run-rate of <0.5%.
- The higher provisioning was done purely from a management overlay perspective for extra caution. It led the PCR to rise to 51% vs 43%+ earlier.
- The higher provisioning was not due to asset quality deterioration. In fact, asset quality improved slightly with GNPA at 4.75% vs 4.90% QoQ.
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