In today’s briefing:
- India – Positioning on Some Interesting Names
- KPIT: Stellar Q1FY24 Earnings
- TVS Supply Chain Solutions IPO – RHP Updates, Peer Comparison & Thoughts on Valuation
India – Positioning on Some Interesting Names
- Power Finance, Astral, IDFC First Bank, Cummins India, HDFC Asset Management, Ashok Leyland, Polycab India and Supreme Industries have all run up over the recent past and have investor attention.
- The increase in market cap has put the stocks on active manager radars and could also result in the stocks being added to global indices in the near future.
- We take a look at the positioning on the stocks and recommend pair trades to reduce market risk while trying to capture alpha.
KPIT: Stellar Q1FY24 Earnings
- KPIT reported a strong Q1FY24 with 7.1% constant-currency (CC) revenue growth and EBIDTA growth of 13.3% QoQ. EBITDA margin expanded by 90bp QoQ to end at 20%.
- KPIT is upbeat about the demand environment. OEMs are continuing to spend heavily on new technologies. KPIT itself is investing significantly in R&D, especially Generative AI.
- Deal wins was healthy at $190mm vs typical run-rate of $150mm+. The pipeline is also healthy across practices.
TVS Supply Chain Solutions IPO – RHP Updates, Peer Comparison & Thoughts on Valuation
- TVS Supply Chain Solutions (1915741D IN) is looking to raise up to US$110m in its India IPO, after downsizing from an earlier float of up to US$500m.
- TVS SCS is an Indian supply chain logistics solution provider which also has global capabilities and network across the value chain with cross deployment abilities, according to RedSeer.
- In our previous note, we looked at the company’s past performance. In this note, we talk about RHP updates, undertake a peer comparison and provide our thoughts on valuation.
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