Daily Brief India: Bandhan Bank Ltd, Vedanta Resources, Bharat Electronics, BYD, Tata Motors Ltd, AAC Technologies Holdings, NagaCorp Ltd, Shriram Transport Finance and more

• Bandhan Bank Ltd (BANDHAN IN) has been an underperformer among Indian banks since the start of the COVID-19 pandemic due to asset quality issues in its core Group Microfinance portfolio.
• Bandhan Bank’s leading position in the microfinance sector, strong operating margins, strategic de-risking, self-sustaining capital base, and cheap relative valuations make it a value bet with strong positive re-rating potential.
• We value Bandhan Bank at 2.1x FY25e P/B in the base case, implying a 44% upside. On the other hand, we also discuss the risks to the thesis in detail.

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.

• Vedanta Resources

• There should be two changes for the NIFTY Index (NIFTY INDEX) in March. That could increase to three, but that would take some big price moves from now to January.
• Impact on the potential changes is pretty large at over 6 days of ADV to trade from passive trackers. The impact is over 11 days of delivery volume.
• Inclusion of Avenue Supermarts Ltd (DMART IN) in the F&O segment before January could lead to another change.

• We believe the undertone in the market is bullish, Large Caps are “out of flavour” and hence an L/S (Long/Short) strategy with INDA/SMIN could be an interesting pair to track. 
• We visited a BYD (1211 HK) showroom in Western India gathering hints of the defensive strategy in India. 
• Other names discussed include Asian Paints (APNT IN), CE Info Systems (MapmyIndia) (1052633Z IN) and Ebix (EBIX US).  

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.

• Medco Energi
• Tata Motors ADR

The Asia Monthly focuses on providing updates on recent events, information on new issues and spread movements, as well as summarising our top picks. The Asia Monthly is intended to broaden investors’ understanding of the Asian USD high-yield market.

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.

• China Vanke
• JSW Infrastructure
• NagaCorp Ltd
• Vedanta Resources

• Shriram Finance (formerly Shriram Transport Finance) now includes two major subsidiaries in its numbers, in the listed entity, driving up AUM, ROA and net profit.
• There is strong latent demand in India for pre-owned commercial vehicles and passenger vehicles, where SHTF focuses, with a long track record of good profit, ROA, NIM.
• Underwriting seems strong given stage 3 and stage 2 loan data, and with funding cost improvements, from distribution of liabilities, good scope for profit growth, ROA, NIM.