In today’s briefing:
- GQG Remains Bullish on Adani Despite US Indictment
- Quiddity BSE Dec 24 Rebal: Big Wins for Zomato & Jiofin as New F&O Inclusions Trigger Surprises
- The Beat Ideas: Deep Industries- A Hidden Oil & Gas Proxy
- Specialty Chemicals Facing Product Cycle Shortening – A Threat to SRF (SRF IN)?
- Polymatech Electronics Ltd- Forensic Analysis
- EQD | NIFTY 50 (NIFTY INDEX) – Capped Risk Reversal and Other Option Opportunities
- EQD / NSE Vol Update / IVs Finally Respond to Mkt. Forces as Holidays Drop off the Calendar
GQG Remains Bullish on Adani Despite US Indictment
- GQG acknowledges the seriousness of the charges, but maintains its confidence in the Adani Group companies.
- GQG sees a distinction between the allegations against the individuals and the operational strength of the businesses.
- The firm believes that the fundamentals of the companies remain strong. GQG will continue to monitor the situation closely.
Quiddity BSE Dec 24 Rebal: Big Wins for Zomato & Jiofin as New F&O Inclusions Trigger Surprises
- The December 2024 index review results for the BSE Sensex and BSE 100 Indices were announced after the close on Friday 22nd November 2024.
- On the same day, the Bombay Stock Exchange announced several new names will be added to the Futures and Options (F&O) segment resulting in multiple surprises among the index changes.
- There will be one change for BSE Sensex and six changes for BSE 100 during the December 2024 index rebal event.
The Beat Ideas: Deep Industries- A Hidden Oil & Gas Proxy
- Deep Industries (DEEPI IN) targeting 800 Cr worth of revenue by FY26, with 35% CAGR in next 2 years.
- India is opening more oil & gas wells, needs services of company like Deep who can provide one stop shop for all Oil & Gas Needs.
- Key Triggers- Prabha Barge(60% Operating Margins) and Dolphin Offshore(for diversifying into offshore services) will further margin accretive.
Specialty Chemicals Facing Product Cycle Shortening – A Threat to SRF (SRF IN)?
- In this Insight, we share our channel inputs that might be relevant for SRF Ltd (SRF IN), Navin Fluorine International (NFIL IN), and Gujarat Fluorochemicals (FLUOROCH IN).
- Weak demand and operational conditions in China have forced companies to focus on clearing inventory rather than maintaining prices, which has negatively impacted India’s export-oriented companies.
- Industry-Wide product cycles, especially in Specialty Chemicals, are shortening, which is a potential threat to leaders like SRF Ltd (SRF IN).
Polymatech Electronics Ltd- Forensic Analysis
- Polymatech Electronics (POLM IN) revenues have skyrocketed by 27x in the last three years, but the balance sheet is filled with several red herrings.
- Topline looks out of sync with production and have been largely aided by receivables. Being an R&D oriented company, the R&D expense only appeared in FY24, when sales were INR6bn
- Mis-Classification of cash flows, questionable RPT with promoters, dubious transition towards IND AS, absurd nature of some key expenses, also warrant attention
EQD | NIFTY 50 (NIFTY INDEX) – Capped Risk Reversal and Other Option Opportunities
- The NIFTY Index (NIFTY INDEX) finished last week in positive territory. A longer rally could ensue.
- This Insight provides option strategies based on the resistance and support levels identified in the quantitative Insight EQD | NIFTY 50: State Of The Odds.
- Volatility skew and option liquidity inform three strategies, which include a Capped Risk Reversal, a Risk Reversal, and a Call Spread.
EQD / NSE Vol Update / IVs Finally Respond to Mkt. Forces as Holidays Drop off the Calendar
- IVs trade higher in spite of a late-week recovery in equities. Negative correlation between Index & option premiums reasserted as multiple holidays fall off the calendar.
- Vol-Regime Switching Model firmly lodged in “High & Down” state. Allocation to Iron Condors/ Iron Butterflies recommended.
- Vol surface characteristics also reflecting increased risk premia – Skew extends away from overly compressed levels. Vol term structure swings from Contango to Backwardation.
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