India: IndiaMart, Sagar Cements, Tech Mahindra, Amber Enterprises India, Cholamandalam Investment and Finance, Hester Biosciences, Bharat Electronics, Info Edge India, INR 5Y and more

Our next Webinar features an actionable, counter-consensus look into IndiaMart (INMART IN) from experienced Insight Providers Pranav Bhavsar and Nitin Mangal of India Independent Insight. While the stock is well-owned, forensic accounting and investigative due diligence from our Insight Providers suggests that risks are grossly under-appreciated. Join our session to get the full scoop.

The webinar will be hosted on Wednesday, 23 February 2022, 17:00 SGT/HKT.

Pranav Bhavsar is the Founder of ASA Capital Management, focusing on research on consumer themes and companies operating in India or global companies that have significant exposure to India or the Indian economy.

Nitin Mangal is a SEBI registered Research Analyst with more than 10 years of experience in Indian equities. He is Pioneer of Corporate Governance and Accounting Research in Indian Market and has successfully developed a product for Institutional Investors named as “Analysis Beyond Consensus” during his association with Edelweiss Securities Ltd, Mumbai. 

• Sagar Cements is a south based cement player with cement capacity of 8.25 MT. Region wise, AP/Telangana accounted for ~60% of sales followed by Tamil Nadu (16%) and Karnataka (9%).
• Going forward, the company will be able to develop a presence in the fastergrowing eastern market and the more profitable central market with recent commissioning of new 2.5 MT capacity
• Self-reliance in power (61.5 MW), ability to switch between coal and petcoke for fuel requirement and split grinding units near market gives it cost advantage

CME segment drives growth

Healthy performance ahead of season, beat our estimates

Results a mixed bag; Growth returned

• Hester is one of India’s leading animal healthcare companies & the second largest poultry vaccine manufacturer in the country
• It has a strategic presence in 30+ countries with key markets being India, Nepal and Tanzania.
• Target Price and Valuation: We value Hester at | 2780 (base business at Rs 2712 i.e. 38x FY24E EPS of Rs 71.4 + NPV of Rs 67.8 for Covaxin DS opportunity).

• Bharat Electronics (BEL) is leading aerospace and defence electronics company. It primarily manufactures advance electronics products.
• Multi-product, multi-technology- diverse product range including radar, missile systems, electronic warfare & avionics, anti-submarine warfare, electro-optics, home land security, civilian products, etc
• Focus to increase non-defence share to ~20-25% over two to three years

• About the stock: Info Edge provides internet based service delivery like recruitment services (Naukri), real estate (99 acres), Jeevansaathi and Shiksha.
• Quasi play on Indian start up like Zomato, PolicyBazaar, Shoekonect, Ustra, Gramophone and job market, matrimony services & real estate market
• Prudent capital allocation and recruitment business EBITDA margin >50%

• While EM rates on aggregate have moved up as US rates have risen, there is a fair degree of differentiation within EM; e.g., the divergence between India and Mexico.
• Rates in India climbed higher following the pro-growth budget, which increased borrowing needs, while yields rallied in Mexico following indications that the country has entered a technical recession.
• These idiosyncratic developments accelerated the divergence in rates between the two countries, allowing me to suggest taking profits on my Receive Mexico 5y vs Pay India 5y rate trade recommendation.

• Amber is a leading solution provider for air conditioner OEM/ODM industry in India.
• The company has a product portfolio including RACs, RAC components and other non AC components
• Derives ~62% of its revenues from RACs and the rest from components and mobility applications