Consumer Analyst / Channel Surveillance Specialist, Trudence Capital Advisors

Pranav Bhavsar

Pranav Bhavsar & the team at India Independent Insight (Iii), provide research on consumer companies operating or have exposure to in India. The research methodology focuses on carrying out on-the-ground channel surveillance/checks that include supplier/distributor/customer interactions, access to industry experts, and bespoke primary data sources that aid in providing unique insights and counter consensus ideas.  

Leveraging the team's forensic analysis along with channel surveillance, the team at Iii also aids investors in early identification of changing consumer trends, identification and quantification of accounting/governance risks, and the associated impact on the business model of the company.

Pranav has over 15 years of experience in the Indian equity market, and has worked with some of the global activists, long only and PE funds for their India projects. Prior roles also include building and leading an institutional sell-side desk. In his free time, Pranav is a traveler, biker, and a young Indian contributing to the country’s social and economic development.

Consumer Analyst / Channel Surveillance Specialist

ASA Capital Management

ASA Capital Management is a boutique Research and Investment Advisory firm focusing on primary research in India. ASA provides bespoke research services to Institutional Clients with a focus on due diligence backed with primary research, Field Trips & Channel Checks.

Equity Bottom-Up

<p>We recently attended the extraordinary general meeting (EGM) of <a href="https://www.smartkarma.com/entities/4353" target="_blank" data-smartkarma-citation="entities:4353:1">Zydus Wellness (ZYWL IN)</a>. The primary agenda for the EGM was to approve the issue of fresh equity and raise debt to finance the acquisition of <a href="https://www.smartkarma.com/entities/2253" target="_blank" data-smartkarma-citation="entities:2253:1">Kraft Heinz Co (KHC US)</a> 's Indian subsidiary Heinz India Private Limited jointly with <a href="https://www.smartkarma.com/entities/12914" target="_blank" data-smartkarma-citation="entities:12914:1">Cadila Healthcare (CDH IN)</a>. This will include the brands Complan (Health Food Drink), Glucon D (Glucose Powder), Nycil (Talcum Power) and Sampriti Ghee. We believe the deal is in sync with management's vision of developing Pharma oriented consumer brands. However with recent acquisition of <a href="https://www.smartkarma.com/entities/18984" target="_blank" data-smartkarma-citation="entities:18984:1">Glaxosmithkline Consumer Healthcare (SKB IN)</a> by  <a href="https://www.smartkarma.com/entities/13828" target="_blank" data-smartkarma-citation="entities:13828:1">Hindustan Unilever (HUVR IN)</a> the competition in the health food drink market may get intense. Having said that, the largest brand Glucon D will likely continue market leadership along with Everyuth and Nycil which will be a good addition to the Zydus Portfolio. Any attempt for market share gains with Complan and Sampriti ghee will be futile and may come at a cost of margins. Based on preliminary, we expect full effect of the deal to appear on FY 2020 financials. Our preliminary estimates indicate a FY 2021 EPS of 51.68, which with a average PE multiple of 34.56 leads to a price target of INR 1809 per share implying an upside of 35% from latest close price of INR 1342. We will revisit our estimates post Q4 FY19 numbers when a much clearer picture is likely to emerge. </p>

We recently attended the extraordinary general meeting (EGM) of Zydus Wellness (ZYWL IN). The primary agenda for the EGM was to approve the issue of fresh equity and raise debt to finance the acquisition of Kraft Heinz Co (KHC US) 's Indian subsidiary Heinz India Private Limited jointly with Cadila Healthcare (CDH IN). This will include the brands Complan (Health Food Drink), Glucon D (Glucose Powder), Nycil (Talcum Power) and Sampriti Ghee. We believe the deal is in sync with management's vision of developing Pharma oriented consumer brands. However with recent acquisition of Glaxosmithkline Consumer Healthcare (SKB IN) by  Hindustan Unilever (HUVR IN) the competition in the health food drink market may get intense. Having said that, the largest brand Glucon D will likely continue market leadership along with Everyuth and Nycil which will be a good addition to the Zydus Portfolio. Any attempt for market share gains with Complan and Sampriti ghee will be futile and may come at a cost of margins. Based on preliminary, we expect full effect of the deal to appear on FY 2020 financials. Our preliminary estimates indicate a FY 2021 EPS of 51.68, which with a average PE multiple of 34.56 leads to a price target of INR 1809 per share implying an upside of 35% from latest close price of INR 1342. We will revisit our estimates post Q4 FY19 numbers when a much clearer picture is likely to emerge. 

Glaxosmithkline Consumer Healthcare (SKB IN)

EGM Diaries | Zydus Wellness (ZYWL IN) | A Boost of Instant Energy