Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Index Rebalance

<ul>
<li>Today is the last day of the review period for the June review of the <a href="https://www.smartkarma.com/entities/s-p-bse-sensex-index" target="_blank" data-smartkarma-citation="entities:31494:1" rel="noopener">S&amp;P BSE SENSEX Index (SENSEX INDEX)</a>. Changes become effective at the close on 17 June. </li>
<li>We see <a href="https://www.smartkarma.com/entities/tata-motors-ltd" target="_blank" data-smartkarma-citation="entities:216:1" rel="noopener">Tata Motors Ltd (TTMT IN)</a> and <a href="https://www.smartkarma.com/entities/tata-motors-ltd-a-dvr" target="_blank" data-smartkarma-citation="entities:349:1" rel="noopener">Tata Motors DVR (TTMT/A IN)</a> replacing <a href="https://www.smartkarma.com/entities/dr-reddy-s-laboratories-ltd" target="_blank" data-smartkarma-citation="entities:16406:1" rel="noopener">Dr. Reddy's Laboratories (DRRD IN)</a>. <a href="https://www.smartkarma.com/entities/hindalco-industries-ltd" target="_blank" data-smartkarma-citation="entities:18490:1" rel="noopener">Hindalco Industries (HNDL IN)</a> is a close add on sector balance.</li>
<li>The impact on <a href="https://www.smartkarma.com/entities/dr-reddy-s-laboratories-ltd" target="_blank" data-smartkarma-citation="entities:16406:1" rel="noopener">DRRD IN</a> will be higher than on <a href="https://www.smartkarma.com/entities/tata-motors-ltd" target="_blank" data-smartkarma-citation="entities:216:1" rel="noopener">TTMT IN</a>, in terms of days of ADV to trade and days of delivery volume that needs to change hands.</li>
</ul>


Today is the last day of the review period for the June review of the S&amp;P BSE SENSEX Index (SENSEX INDEX). Changes become effective at the close on 17 June. 
We see Tata Motors Ltd (TTMT IN) and Tata Motors DVR (TTMT/A IN) replacing Dr. Reddy's Laboratories (DRRD IN). Hindalco Industries (HNDL IN) is a close add on sector balance.
The impact on DRRD IN will be higher than on TTMT IN, in terms of days of ADV to trade and days of delivery volume that needs to change hands.


SENSEX Index Rebalance Preview: Tata Motors Should Replace Dr. Reddy; Hindalco Is Close

External broker reports(aggregated public sources), Axis Direct

Axis Direct

External broker reports(aggregated public sources)

Axis Direct is the flagship brand under Axis Securities Limited, a subsidiary of Axis Bank in India. 

Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

Equity Bottom-Up

<ul><li>Nestle India (NEST) revenue reported in Q1CY22beat our estimates. However, the company’s EBITDA and PAT were a miss with clear signs of pressures noted on Gross Margins owing to inflationary RM in edible oil, milk &amp; derivatives, and packing materials.</li><li>Reported revenue grew 9.7% YoYto Rs 3,951Cr (~4% above our estimate of Rs 3,800Cr in Q1CY22)</li><li>We maintain HOLD with revised TP of Rs 18,300 (60x Mar-24E) vs earlier TP of Rs 18,600 (60x CY23E).</li></ul>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.

Nestle India (NEST) revenue reported in Q1CY22beat our estimates. However, the company’s EBITDA and PAT were a miss with clear signs of pressures noted on Gross Margins owing to inflationary RM in edible oil, milk &amp; derivatives, and packing materials.Reported revenue grew 9.7% YoYto Rs 3,951Cr (~4% above our estimate of Rs 3,800Cr in Q1CY22)We maintain HOLD with revised TP of Rs 18,300 (60x Mar-24E) vs earlier TP of Rs 18,600 (60x CY23E).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.

Nestle India: RM Headwinds Persist; Await Better Entry Point

External broker reports(aggregated public sources), HDFC Securities

HDFC Securities

HDFC securities is the best online trading platform for stocks, IPOs, mutual fund in India. 

Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

Thematic (Sector/Industry)

<ul><li>Aggregate revenue/EBITDA to grow by 8/9%: Our FMCG coverage universe is expected to deliver growth of 8/9% YoY in revenue/EBITDA in Q4FY22 (vs 24/22% in Q4FY21 and 16/12% in Q3FY22)</li><li>Inflationary pressure continued to disrupt demand in both urban and rural India; however, rural volume growth was weaker than urban</li><li>Volume growth has been decelerating even on 2/3 year CAGR (demand pressure, grammage reduction); however, downtrading was not witnessed</li></ul>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.

Aggregate revenue/EBITDA to grow by 8/9%: Our FMCG coverage universe is expected to deliver growth of 8/9% YoY in revenue/EBITDA in Q4FY22 (vs 24/22% in Q4FY21 and 16/12% in Q3FY22)Inflationary pressure continued to disrupt demand in both urban and rural India; however, rural volume growth was weaker than urbanVolume growth has been decelerating even on 2/3 year CAGR (demand pressure, grammage reduction); however, downtrading was not witnessedContent 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.

FMCG & Alco Bev: Rural Demand Struggles; Margin Pressures Continue

Tata Motors Passenger Vehicles / Index Rebalance

<ul>
<li>
<a href="https://www.smartkarma.com/entities/tata-motors-ltd" target="_blank" data-smartkarma-citation="entities:216:1" rel="noopener">Tata Motors Ltd (TTMT IN)</a> and <a href="https://www.smartkarma.com/entities/tata-motors-ltd-a-dvr" target="_blank" data-smartkarma-citation="entities:349:1" rel="noopener">Tata Motors DVR (TTMT/A IN)</a> are likely inclusions to the <a href="https://www.smartkarma.com/entities/s-p-bse-sensex-index" target="_blank" data-smartkarma-citation="entities:31494:1" rel="noopener">S&amp;P SENSEX INDEX</a> in June while <a href="https://www.smartkarma.com/entities/dr-reddy-s-laboratories-ltd" target="_blank" data-smartkarma-citation="entities:16406:1" rel="noopener">Dr. Reddy's Laboratories (DRRD IN)</a> could be deleted.</li>
<li>
<a href="https://www.smartkarma.com/entities/hindalco-industries-ltd" target="_blank" data-smartkarma-citation="entities:18490:1" rel="noopener">Hindalco Industries (HNDL IN)</a> could be added depending on sector balance while <a href="https://www.smartkarma.com/entities/nestle-india-ltd" target="_blank" data-smartkarma-citation="entities:13101:1" rel="noopener">Nestle India (NEST IN)</a> is a close delete on liquidity.</li>
<li>The inclusion of Tata Motors could result in the discount on the DVR line <a href="https://www.smartkarma.com/entities/tata-motors-ltd-a-dvr" target="_blank" data-smartkarma-citation="entities:349:1" rel="noopener">Tata Motors DVR (TTMT/A IN)</a> narrowing versus the common shares <a href="https://www.smartkarma.com/entities/tata-motors-ltd" target="_blank" data-smartkarma-citation="entities:216:1" rel="noopener">Tata Motors Ltd (TTMT IN)</a>. </li>
</ul>



Tata Motors Ltd (TTMT IN) and Tata Motors DVR (TTMT/A IN) are likely inclusions to the S&amp;P SENSEX INDEX in June while Dr. Reddy's Laboratories (DRRD IN) could be deleted.

Hindalco Industries (HNDL IN) could be added depending on sector balance while Nestle India (NEST IN) is a close delete on liquidity.
The inclusion of Tata Motors could result in the discount on the DVR line Tata Motors DVR (TTMT/A IN) narrowing versus the common shares Tata Motors Ltd (TTMT IN). 


SENSEX Index Rebalance Preview (June): Down to the Wire

<ul><li>Nestle India (NEST) reported Revenues for Q4CY21 in-line with our estimates;EBITDA &amp; PAT were however a miss</li><li>Clear signs of pressure have been noted on Gross Margins owing to inflationary RM</li><li>We Maintain HOLD with unchanged TP of Rs18,600 as at CMP the risk-reward is unfavourable even as the long term growth trajectory appears fair (20+ projects in pipeline).</li></ul><div class="content-highlight">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.</div>

Nestle India (NEST) reported Revenues for Q4CY21 in-line with our estimates;EBITDA &amp; PAT were however a missClear signs of pressure have been noted on Gross Margins owing to inflationary RMWe Maintain HOLD with unchanged TP of Rs18,600 as at CMP the risk-reward is unfavourable even as the long term growth trajectory appears fair (20+ projects in pipeline).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.

Nestle India: RM Headwinds Persist; Await Better Entry Points

India

Nestle India Ltd. manufactures brand name milk products and other food products. The Company's products include Everyday dairy whitener, milk powder and ghee, Milkmaid sweetened condensed milk and Cerelac weaning foods. Nestle's beverages include Nescafe and Sunrise coffee and Nesfit enriched glucose powder. Nestle also manufactures Maggi noodles, soups and sauces.

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Nestle India (NEST IN)

SENSEX Index Rebalance Preview: Tata Motors Should Replace Dr. Reddy; Hindalco Is Close

Tata Motors should replace Dr Reddy at the June rebalance. Hindalco is an alternate add on sector balance. Passives will need to trade 4-7 days of...

Brian Freitas

Nestle India: RM Headwinds Persist; Await Better Entry Point

Nestle India (NEST) revenue reported in Q1CY22beat our estimates. However, the company’s EBITDA and PAT were a miss with clear signs of pressures...

Axis Direct

FMCG & Alco Bev: Rural Demand Struggles; Margin Pressures Continue

Aggregate revenue/EBITDA to grow by 8/9%: Our FMCG coverage universe is expected to deliver growth of 8/9% YoY in revenue/EBITDA in Q4FY22...

HDFC Securities

SENSEX Index Rebalance Preview (June): Down to the Wire

Tata Motors could replace Dr Reddy in the Sensex at the June rebalance. Hindalco is a close add while Nestle is a close delete. The inclusion of...

Brian Freitas

Nestle India: RM Headwinds Persist; Await Better Entry Points

We Maintain HOLD with unchanged TP of Rs. 18,600 as at CMP the risk-reward is unfavourable even as the long term growth trajectory appears fair...

Axis Direct

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