In today’s briefing:
- Hero Motocorp (HMCL IN) | The “HOG” Wash
- SENSEX Ad Hoc Rebalance: JSW Steel Replaces HDFC
- Macrotech Developers- Yet to Show Grit
Hero Motocorp (HMCL IN) | The “HOG” Wash
- Hero Motocorp (HMCL IN) & Harley Davidson (HOG US) launched their collaborative creation, the Harley-Davidson X440, in India.
- While this is a step in the right and anticipated direction, there are potentially grave mistakes that need to be corrected.
- For HOG, there is more to lose than to gain from this development. Additionally, Eicher Motors (EIM IN) moat around the brand and a strong riding culture is likely underrated.
SENSEX Ad Hoc Rebalance: JSW Steel Replaces HDFC
- Following HDFC Limited (HDFC IN)‘s delisting, JSW Steel Ltd (JSTL IN) will be added to the S&P BSE SENSEX Index (SENSEX INDEX EQUITY) at the close on 12 July.
- The change was largely expected, but passive trackers need to buy over 5 days of ADV and nearly 12 days of delivery volume of JSW Steel Ltd (JSTL IN) .
- The HDFC Limited (HDFC IN) delisting could help Wipro Ltd (WPRO IN) in avoiding deletion from the S&P BSE SENSEX Index (SENSEX INDEX EQUITY) in December.
Macrotech Developers- Yet to Show Grit
- Macrotech Developers (LODHA IN) had several issues on the balance sheet and governance front earlier. While, the debt levels have significantly come down since the time, governance however needs improvement.
- Flat sales and margin contraction, driven by some bizzarre expenses needs attention including some elongated debtors.
- We suggest investors should remain cautious about future uncertainty, as impairment of loans and adverse outcome of contingent liabilities may have a dent on the balance sheet.
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