In today’s briefing:
- NIFTY50 Index Rebalance: Apollo Hospitals to Replace IOC
- Byju’s Tearsheet – India’s Largest Edtech Company
- Swiggy Tearsheet – Leading Food Delivery Platform
- NIFTY NEXT50 Index Rebalance: Zomato, PayTM, Nykaa Among the Adds
- NIFTY Bank Index Rebalance: BOB to Replace RBL Bank
- Pick of the Week: Polycab India
- Ambuja Cement: Cost Spike Hits Margin; Targets Major Expansion in East
- National Aluminium: Well Placed to Benefit from the Strong Aluminum Prices
- Automotive Axles: Well Placed to Play on Cyclical Recovery in CV Space
- Optimising and monetising user funnel to drive customer lifetime value
NIFTY50 Index Rebalance: Apollo Hospitals to Replace IOC
- As expected, Apollo Hospitals Enterprise (APHS IN) will replace Indian Oil Corp (IOCL IN) in the NIFTY Index (NIFTY INDEX) after the close of trading on 30 March.
- The index methodology has been changed to make new listings eligible for index inclusion if they complete one month by the review cutoff date, down from three months earlier.
- Estimated one-way turnover is 0.63% and will result in a one-way trade of around INR 14bn. Passive trackers will have a lot to trade on the stocks.
Byju’s Tearsheet – India’s Largest Edtech Company
- Byju’s (Byju) is the largest edtech company in India. It offers online and offline courses.
- As per media reports, its latest funding round on Nov 21 was done at a valuation of US$21bn.
- Byju is rumored to be in talks with Churchill Capital VII SPAC to go public in the US.
Swiggy Tearsheet – Leading Food Delivery Platform
- Swiggy is a leading food delivery platform in India. It along with its listed rival, Zomato, control nearly the entire food delivery market in India.
- Swiggy last raised another $700m investment led by Invesco US with a valuation of $10.7bn in Jan 2022.
- Recent media reports have indicated that the company could look to raise around US$800m via an IPO in early 2023
NIFTY NEXT50 Index Rebalance: Zomato, PayTM, Nykaa Among the Adds
- Inclusions are FSN E-Commerce Ventures (NYKAA), Mindtree Ltd (MTCL), Paytm (PAYTM), SRF Ltd (SRF) and Zomato (ZOMATO), while Indian Oil Corp (IOCL IN) moves lower from the NIFTY Index.
- Deletions are Aurobindo Pharma (ARBP), Hindustan Petroleum (HPCL), Indraprastha Gas (IGL), Jindal Steel & Power (JSP) and Yes Bank (YES), while Apollo Hospitals (APHS) moves up to the NIFTY Index.
- Estimated one-way turnover on the NIFTY NEXT50 Index is 10.24%, the one-way trade is INR 8,486bn and there is over 1 day of ADV to trade on a few stocks.
NIFTY Bank Index Rebalance: BOB to Replace RBL Bank
- Bank Of Baroda (BOB IN) will replace RBL Bank Ltd (RBK IN) in the Nifty Bank Index (NSEBANK INDEX) at the close of trading on 30 March.
- Index trackers will need to buy over 2 days of ADV on BOB while selling over 2 days of ADV on RBL. There will be capping changes too.
- Bank Of Baroda (BOB IN) trades cheaper than its peers on forward PE and price to book and could outperform over the near-term.
Pick of the Week: Polycab India
- Polycab India is a leading manufacturer of cables & wires with a diverse product range catering to industrial and household segments
- In 2009 the company diversified into EPC business to strategically cater to the Cables & Wires requirement of large infrastructure EPC projects
- We recommend a Buy the stock for a target price of Rs 2,640 implying an upside of 11% from CMP
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Ambuja Cement: Cost Spike Hits Margin; Targets Major Expansion in East
- It also announced major Capex in the east, which along with its north expansion, will increase its capacity to 40mn MT over the next 3-4 years and firm up the volume growth visibility.
- Ambuja Cement: We maintain our ADD rating on Ambuja Cements (ACEM), with a lower TP of INR 380/share (SOTP-based).
- ACEM is working on various cost levers (reduce clinker factor, increase TSR factor and green power) to boost its margin.
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National Aluminium: Well Placed to Benefit from the Strong Aluminum Prices
- We initiate coverage with a BUY rating and value the company at 5.5x FY24 EBITDA and 0.5x book value of CWIP to arrive at the target price of Rs 150/share, implying an upside potential of 28% from the current levels.
- Nalco is the only pure equity play on Aluminium and Alumina commodities in India
- Aluminium is expected to remain in a deficit a second consecutive time in CY22 supporting higher prices
Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.
Automotive Axles: Well Placed to Play on Cyclical Recovery in CV Space
- Automotive Axles (AAL), established in 1981, is largest independent manufacturer of rear axle drive assemblies in India (primarily for CVs, M&HCV)
- As of FY20, rear drive axles comprise ~60% of its topline with brakes share at ~20% and other parts comprising the rest
- Target Price and Valuation: We introduce FY24E. We now value the company at a revised target price of Rs 1730 i.e. 20x P/E on FY24E EPS (earlier TP Rs 1260).
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Optimising and monetising user funnel to drive customer lifetime value
- One 97 Communications’ (OCL or Paytm used interchangeably in the report) two-sided digital ecosystem of 64.4mn average monthly transacting users (MTUs) (as at Dec’21) from >350mn consumer base and over 24.9mn merchants is core to its unit economics.
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