In today’s briefing:
- HDFC Bank (HDFCB): Looking Beyond Short-Term Headwinds
- Mohit Joshi: The Man Behind Tech Mahindra’s Strategic Shift
- Indian Banks Screener FYE24, Part 1: We like Quality Name HDFC Bank, Baroda Is the Value Pick
- TBO Tek Pre-IPO – Refiling Updates & Peer Comparison
- Premier Energies Ltd IPO- Forensic Analysis
HDFC Bank (HDFCB): Looking Beyond Short-Term Headwinds
- While HDFCB’s results have been somewhat lackluster over the past couple of quarters, this has been largely due to merger-related drags, tight liquidity and irrational competition in the marketplace.
- From a medium-to-long-term perspective, the growth prospects for HDFCB remain tremendously attractive despite its large size, as evident from its consistent market share gains in deposits.
- Q4FY24 earnings came largely in line with the expectation in terms of core earnings, except for one-off gain from an asset sale that was more than offset by floating provisions.
Mohit Joshi: The Man Behind Tech Mahindra’s Strategic Shift
- Under Mohit Joshi’s leadership, Tech Mahindra (TECHM IN) targets a 15%+ EBIT margin and revenue growth surpassing industry averages by FY2027, with a focus on operational reform and portfolio integration.
- Project Fortius aims to achieve $250 million annual cost savings over 3 years, emphasizing high-margin services and organic growth, signaling a departure from reliance on traditional acquisitions.
- This strategic shift towards operational efficiency and organic growth alters the company’s outlook, positioning Tech Mahindra for sustainable growth and shareholder returns, underlining a commitment to long-term value creation.
Indian Banks Screener FYE24, Part 1: We like Quality Name HDFC Bank, Baroda Is the Value Pick
- HDFC Bank results to FYE24 are improving and we retain it as a buy, with pre-provision returns improving slightly QoQ and best in peer group NPL ratio and coverage
- Bank of Baroda is our core value Indian bank pick, for its undemanding valuations, healthy ROE and potential for NPL improvements
- Bandhan bank is a potential contrarian pick for its value attributes; we are cautious on State Bank of India for its delinquency risks, low core capital ratio
TBO Tek Pre-IPO – Refiling Updates & Peer Comparison
- TBO Tek (0395045D IN) is looking to raise approximately US$200m in its upcoming India IPO.
- TBO Tek is a global travel distribution platform. Its two-sided technology platform serves companies involved in the travel industry such as hotels, airlines, travel agencies and travel management companies.
- In our previous note, we talked about the company’s historical performance. In this note, we talk about its refiling updates and undertake a peer comparison.
Premier Energies Ltd IPO- Forensic Analysis
- Premier Energies Limited (0377949D IN) is into manufacturing of solar cells and modules. The company is the second largest integrated player (cell+module) in India with a market share of 28%
- The business has picked up in the last two years. Revenues, order book and capacities have increased and margins have also seen improvement.
- However, the company is struggling on cash conversion on the back of highly levered balance sheet. Focus should also be on few questionable related party transactions.
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