Daily Brief India: Adani Total Gas, Mamaearth, Bandhan Bank Ltd, Nocera, EzFill Holdings Inc, KPIT Technologies, Tata Motors Ltd, Kwg Property Holding and more

• The six-month reference period for NIFTY September 2022 Rebalance ends tomorrow.
• In this insight, we take a look at the names that could become ADDs/DELs for the NIFTY 50, 100, and 500 Indices in the September 2022 Rebalance.
• In addition, I have discussed some trading opportunities with interesting potential index flow dynamics.

• Mamaearth (1652951D IN)‘s in one of foremost D2C personal care brands. Initially started with baby products, the brand now offers a full range of toxin free, natural products.  
• Channel feedback suggests good products and premium pricing, but chasing traditional retail is not easy and will test Mamaearth’s execution capabilities. 
• COVID has boosted financials. Revenues have skyrocketed and the company has become profitable. The way forward for traditional retailing and its execution will be the key.  

• The situation in West Bengal is improving/stable. While Assam is showing no signs of improvement
• Recent floods have impacted collections, however, as highlighted earlier they are not likely to slip into NPA.
• The asset quality downcycle could be on the verge of ending.  Additional provisioning requirements should be sharply lower from Q3. 

• This is our first report on Nocera and we look to provide a detailed account of the various industries that the company operates in and the key macro-economic factors.
• While Nocera did report a net loss and incurred one-time costs related to its listing last year, things ought to be entirely different in 2022.
• However, given how quickly the company’s revenues are increasing, the stock price should also rise quickly.

• This is our first report on EzFill Holdings and we look to provide a detailed account of the various drivers that will be responsible for the company’s growth in the coming years.
• However, it is trading at a revenue multiple of around 1x whereas it can easily command a 5-6x revenue multiple.
• EzFill’s current share price does not reflect the potential upside of its huge revenue growth potential as well as its attractiveness as an acquisition target for oil majors.

• KPIT Technologies (KPITTECH IN) [“KPIT Tech”; “KPIT”] reported a robust Q1FY23 earnings with CC revenue growth of 6% QoQ (26% annualized), well above the 18-21% guided for FY23.
• The biggest positive surprise was on the margins front with EBITDA margins coming in at 19.4%, exceeding the 18-19% band guided for FY23, despite the supply-side headwinds.
• More importantly, the demand outlook continues to be promising despite macro-economic concerns around US and Europe.

Tata Motors’ Q1/22-23 results continued to be weaker than expected as well as guided, mainly due to the weakness in Jaguar Land Rover (JLR), which more than offset Tata Motors India’s reasonable performance. Gross leverage remained almost stable, given the small increase in debt and minimal decline in EBITDA. However, net leverage deteriorated significantly, due to the increase in net debt. Liquidity is adequate. The debt maturity profiles for both JLR and Tata Motors India are evenly spaced out.

Despite management’s consistent guidance and hints at an improvement in the situation, retail sales continued to be materially lower on a y-o-y basis (albeit relatively flat q-o-q). We expect the semiconductor shortage to persist for at least another 18 months. The industry will need to rebuild the chip and component supply chains, which could take time. Thus, we have a cautious view on management’s persistent optimism.

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• KWG Living Group
• Lifestyle International Holdings
• Vedanta Resources