India: HDFC Bank, Marico Ltd, Transport Corp Of India and more

• HDFCB has announced the long-awaited reverse merger of parent HDFCL.
• The merger should fulfill the implicit RBI policy of 1) not allowing a bank to be owned by an NBFC/HFC, and 2) having its lending business housed mainly in the bank.
• It should also generate cost/business synergies in the medium-to-long run.

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• HDFC Bank (HDFCB) announced the merger with HDFC Ltd. (HDFC), which we believe is beneficial for both entities and will help strengthen HDFCB’s leadership position as synergies emerge over the longer term
• The merger process is likely to be completed in 15- 18 months, subject to the completion of regulatory approvals
• We maintain our BUY recommendation with a target price of Rs 1,985 derived using the SOTP method (core bank at 3.5x FY24 ABV + Subsidiaries value Rs 70/-), implying an upside of 20% from CMP.

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• As per an update released by Marico Ltd (MRCO) on 5th April2022, the FMCG sector continued to witness subdued consumption patterns, primarily on account of weak rural sentiments and persistent inflation in global commodities.
• Inflation, accompanied by price hikes implemented across FMCG categories, affected consumer wallets and eventually resulted in decline in FMCG volume.
• Despite stressed macros, MRCO’s domestic business (~75% of topline) saw low single-digit revenue growth on the back of focused execution and market share gains

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• TCI has developed robust capabilities in multimodal Logistics via its presence across major transportation modes.
• The company has well-diversified service offerings from Road freight, integrated Supply Chain solutions, Sea freight, to a JV with CONCOR for Rail freight.
• These capabilities would be a key enabler for consistent growth in volumes and earnings for TCI over the next few years

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