In today’s briefing:
- NIFTY200 Momentum30 Index Rebalance Preview: 65% One-Way Turnover and US$1.6bn Trade
- Strategic Decision by MapMyIndia: Segregating B2C and B2B Businesses – A Detailed Analysis
- Indian Banks Screener: Stick with Buys on Select, Value Based Smaller Caps
- Quess Corp – Can the Spinoff of India’s Largest Staffing Company Unlock Value?
- Mouri Tech Pre-IPO – Growth Slowing, Customers and Employee Numbers Declining
NIFTY200 Momentum30 Index Rebalance Preview: 65% One-Way Turnover and US$1.6bn Trade
- There could be 19 changes for the Nifty200 Momentum 30 Index that will be implemented at the close on 30 December. There are some stocks from the new F&O inclusions.
- If all changes are on expected lines, one-way turnover is estimated at 65.2% and that will result in a one-way trade of INR 71bn (US$837m).
- The potential inclusions have outperformed the potential deletions since the start of July. The pace picked up over the last month as we neared the end of the review period.
Strategic Decision by MapMyIndia: Segregating B2C and B2B Businesses – A Detailed Analysis
- MapmyIndia decided to hive off its B2C business to a promoter entity which will be funded and backed by the current listed entity.
- Hiving off loss-making business will lead to margin improvement for the listed entity but will increase the cash burn to fund loss-making business
- Departure of current CEO, taking funding from listed entity to fund this loss-making business where Promoter has the stake raises corporate governance issues.
Indian Banks Screener: Stick with Buys on Select, Value Based Smaller Caps
- Our positive focus remains on three smaller cap Indian banks, namely Bandhan, Baroda and Union Bank of India (UBI); we stay negative on richly valued ICICI Bank and Kotak Mahindra
- Bandhan has its NPL challenges, but its pre-provision returns have improved and it is a value stand-out; Baroda remains our favourite and UBI has delivered better profitability and credit quality
- Kotak Mahindra is the peer group’s highest return bank post credit costs, but returns continue to erode; ICICI is on premium valuations and we expect credit costs to go higher
Quess Corp – Can the Spinoff of India’s Largest Staffing Company Unlock Value?
- Quess Corp Ltd (QUESS IN) will spinoff into 3 different companies, each representing a business vertical of its consolidated operations. All three companies are expected to be listed during Q1FY26.
- It has received approval from the stock exchanges and is now awaiting the go ahead from National Company Law Tribunal (NCLT).
- Improving business performance and sum-of-the-parts valuation of the three separate listed businesses indicate potential upside from the current valuation.
Mouri Tech Pre-IPO – Growth Slowing, Customers and Employee Numbers Declining
- Mouri Tech Limited (MT IN) is planning to raise about US$179m through its upcoming IPO in India. It is a provider of IT solutions, focusing on (iERP) and digital transformation services.
- Mouri Tech operates in four main segments: iERP solutions, enterprise digital transformation, infrastructure services, and program management. Its iERP offerings include both on-premise and cloud-based systems.
- The digital transformation services help organizations automate and modernize their processes. The infrastructure services include cloud engineering and cybersecurity solutions.
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