Consumer Analyst / Channel Surveillance Specialist, Trudence Capital Advisors

Pranav Bhavsar

Consumer Analyst / Channel Surveillance Specialist

Trudence Capital Advisors

Trudence Capital Advisors Private Limited is a SEBI-registered Research Analyst, holding SEBI registration number INH000015747. Our firm is dedicated to providing independent and unbiased research on Indian mid to large-cap companies. Trudence Capital is known for its counter-consensus views, with a focus on forensic research and on-ground primary investigations. Our research approach is thorough, involving detailed analysis of accounting practices and governance, alongside extensive channel checks.

Independent & Unbiased Research

Equity Bottom-Up

<ul>
<li>We spoke to channels associated with <a href="https://www.smartkarma.com/entities/au-small-finance-bank-limited" target="_blank" data-smartkarma-citation="entities:24196:1" rel="noopener">AU Small Finance Bank Limited (AUBANK IN)</a> , <a href="https://www.smartkarma.com/entities/kajaria-ceramics-ltd" target="_blank" data-smartkarma-citation="entities:13916:1" rel="noopener">Kajaria Ceramics (KJC IN)</a> , <a href="https://www.smartkarma.com/entities/apl-apollo-tubes-ltd" target="_blank" data-smartkarma-citation="entities:16132:1" rel="noopener">Apl Apollo Tubes (APAT IN)</a> &amp; <a href="https://www.smartkarma.com/entities/blue-star-ltd" target="_blank" data-smartkarma-citation="entities:5162:1" rel="noopener">Blue Star Ltd (BLSTR IN)</a> </li>
<li>Small Business Loan growth is slowing at AU, some down trading due to price increases seen in Kajaria </li>
<li>APL is getting hurt by cheaper alternatives, Blue Star channels are cautiously optimistic about the upcoming Air Conditioner season. </li>
</ul>


We spoke to channels associated with AU Small Finance Bank Limited (AUBANK IN) , Kajaria Ceramics (KJC IN) , Apl Apollo Tubes (APAT IN) &amp; Blue Star Ltd (BLSTR IN) 
Small Business Loan growth is slowing at AU, some down trading due to price increases seen in Kajaria 
APL is getting hurt by cheaper alternatives, Blue Star channels are cautiously optimistic about the upcoming Air Conditioner season. 


Channel Insight #29 | AU Bank, Kajaria, APL Apollo, Blue Star

<ul>
<li>We speak to a total of ten channels representing <a href="https://www.smartkarma.com/entities/apl-apollo-tubes-ltd" target="_blank" data-smartkarma-citation="entities:16132:1" rel="noopener">Apl Apollo Tubes (APAT IN)</a> , <a href="https://www.smartkarma.com/entities/kajaria-ceramics-ltd" target="_blank" data-smartkarma-citation="entities:13916:1" rel="noopener">Kajaria Ceramics (KJC IN)</a> and <a href="https://www.smartkarma.com/entities/somany-ceramics-ltd" target="_blank" data-smartkarma-citation="entities:10694:1" rel="noopener">Somany Ceramics (SOMC IN)</a> </li>
<li>There are some indications of Market share loss for <a href="https://www.smartkarma.com/entities/apl-apollo-tubes-ltd" target="_blank" data-smartkarma-citation="entities:16132:1" rel="noopener">Apl Apollo Tubes (APAT IN)</a> </li>
<li>Demand in metros remains strong and robust, while tier 2/3 locations seems to be grasping for growth. </li>
</ul>


We speak to a total of ten channels representing Apl Apollo Tubes (APAT IN) , Kajaria Ceramics (KJC IN) and Somany Ceramics (SOMC IN) 
There are some indications of Market share loss for Apl Apollo Tubes (APAT IN) 
Demand in metros remains strong and robust, while tier 2/3 locations seems to be grasping for growth. 


India Channel Insight #23 | APL Apollo, Kajaria, Somany

<p>For this insight, we present our takeaways from interaction with channels associated with <a href="https://www.smartkarma.com/entities/havells-india-ltd" target="_blank" data-smartkarma-citation="entities:9158:1" rel="noopener">Havells India (HAVL IN)</a> , <a href="https://www.smartkarma.com/entities/symphony-ltd" target="_blank" data-smartkarma-citation="entities:17047:1" rel="noopener">Symphony Ltd (SYML IN)</a> , <a href="https://www.smartkarma.com/entities/ttk-prestige-ltd" target="_blank" data-smartkarma-citation="entities:9779:1" rel="noopener">TTK Prestige (TTKPT IN)</a> , <a href="https://www.smartkarma.com/entities/indigo-paints" target="_blank" data-smartkarma-citation="entities:31308:1" rel="noopener">Indigo Paints (INDIGOPN IN)</a> , <a href="https://www.smartkarma.com/entities/reliance-industries-ltd" target="_blank" data-smartkarma-citation="entities:198:1" rel="noopener">Reliance Industries (RIL IN)</a> , <a href="https://www.smartkarma.com/entities/apl-apollo-tubes-ltd" target="_blank" data-smartkarma-citation="entities:16132:1" rel="noopener">Apl Apollo Tubes (APAT IN)</a> , <a href="https://www.smartkarma.com/entities/aptus-value-housing-finance-india" target="_blank" data-smartkarma-citation="entities:33502:1" rel="noopener">Aptus Value Housing Finance India (APTUS IN)</a> </p><h3>About India Channel Insight</h3><p>Our objective with India Channel Insight is to share snippets from our channel interactions that are part of our research process. These snippets can potentially be signals for larger themes/ideas emerging out of these interactions.  </p>

For this insight, we present our takeaways from interaction with channels associated with Havells India (HAVL IN) , Symphony Ltd (SYML IN) , TTK Prestige (TTKPT IN) , Indigo Paints (INDIGOPN IN) , Reliance Industries (RIL IN) , Apl Apollo Tubes (APAT IN) , Aptus Value Housing Finance India (APTUS IN) About India Channel InsightOur objective with India Channel Insight is to share snippets from our channel interactions that are part of our research process. These snippets can potentially be signals for larger themes/ideas emerging out of these interactions.  

India Channel Insight | Havells, Symphony, TTK Prestige, Indigo Paints, Reliance, APL Apollo, Aptus

External broker reports(aggregated public sources), IDBI Capital

IDBI Capital

External broker reports(aggregated public sources)

<p>APL Apollo Tubes (APL) reported strong improvement in profitability for Q1FY22; its EBITDA was a strong beat to our forecast. APL's EBIDTA/tonne jumped to Rs6,825 (+129% YoY, +44% QoQ) driven by 1) strong demand, 2) better product mix and 3) higher contribution from high-margin Apollo Tricoat Products. Despite 14% QoQ fall in...</p><div class="content-highlight"><em>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.</em></div>

APL Apollo Tubes (APL) reported strong improvement in profitability for Q1FY22; its EBITDA was a strong beat to our forecast. APL's EBIDTA/tonne jumped to Rs6,825 (+129% YoY, +44% QoQ) driven by 1) strong demand, 2) better product mix and 3) higher contribution from high-margin Apollo Tricoat Products. Despite 14% QoQ fall in...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.

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

<div><p>The Indian mutual fund industry has assets of almost INR 6.6 trillion across Multi cap, Large Cap, Large and Mid Cap, Mid Cap, Small Cap and Flexi Cap equity schemes. Equity schemes classified as large cap need to have at least 80% of their assets invested in large cap stocks, large and mid cap schemes need to have at least 35% of their assets in large cap stocks and at least 35% in mid cap stocks, mid cap funds need to hold at least 65% of their assets in mid cap stocks, and small cap funds need to hold at least 65% of their assets in small cap stocks. Flexi cap funds can invest across market caps.</p></div><div>
<p>The Association of Mutual Funds in India (AMFI) publishes the list of the stocks in each market cap segment in January and July each year and mutual funds have one month to rebalance their portfolios to adhere to the new categorization.</p>
<p>At the next recategorization in July 2021, we see 7 stocks moving from the mid cap segment to the large cap segment with an equal number of stocks moving the other way, and 13 stocks are expected to move from the small cap segment to the mid cap segment with the 16 stocks moving from the mid cap to the small cap segment. There are 3 recent listings that will enter the mid cap segment with over 18 joining the small cap segment.</p>
<p>Historically, the stocks migrating upward to a higher market cap segment have outperformed stocks that migrate to a lower market cap segment over the 1 month and 2 month period post the publishing of the AMFI list. This can be attributed to fund managers realigning their portfolios to meet the new categorization. This provides opportunities to pre-position for the move and unwind post the announcement of the reclassification.</p>
</div>

The Indian mutual fund industry has assets of almost INR 6.6 trillion across Multi cap, Large Cap, Large and Mid Cap, Mid Cap, Small Cap and Flexi Cap equity schemes. Equity schemes classified as large cap need to have at least 80% of their assets invested in large cap stocks, large and mid cap schemes need to have at least 35% of their assets in large cap stocks and at least 35% in mid cap stocks, mid cap funds need to hold at least 65% of their assets in mid cap stocks, and small cap funds need to hold at least 65% of their assets in small cap stocks. Flexi cap funds can invest across market caps.
The Association of Mutual Funds in India (AMFI) publishes the list of the stocks in each market cap segment in January and July each year and mutual funds have one month to rebalance their portfolios to adhere to the new categorization.
At the next recategorization in July 2021, we see 7 stocks moving from the mid cap segment to the large cap segment with an equal number of stocks moving the other way, and 13 stocks are expected to move from the small cap segment to the mid cap segment with the 16 stocks moving from the mid cap to the small cap segment. There are 3 recent listings that will enter the mid cap segment with over 18 joining the small cap segment.
Historically, the stocks migrating upward to a higher market cap segment have outperformed stocks that migrate to a lower market cap segment over the 1 month and 2 month period post the publishing of the AMFI list. This can be attributed to fund managers realigning their portfolios to meet the new categorization. This provides opportunities to pre-position for the move and unwind post the announcement of the reclassification.


India: Stock Reclassification & Active Portfolio Management

India

APL Apollo Tubes is India's largest producer of structural steel tubes, holding approximately 55% of the market share. The company manufactures over 2,500 products, including square, rectangular, and circular hollow sections, as well as pre-galvanized tubes, galvanized tubes, and MS black pipes, catering to construction, infrastructure, and industrial sectors. Headquartered in Noida, Uttar Pradesh (Delhi NCR), the company was founded in 1986.

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APL Apollo Tubes (APAT IN)

Channel Insight #29 | AU Bank, Kajaria, APL Apollo, Blue Star

We spoke to channels associated with AU Small Finance Bank Limited (AUBANK IN) , Kajaria Ceramics (KJC IN) , Apl Apollo Tubes (APAT IN) & Blue Star...

Pranav Bhavsar

India Channel Insight #23 | APL Apollo, Kajaria, Somany

We speak to a total of ten channels representing Apl Apollo Tubes (APAT IN) , Kajaria Ceramics (KJC IN) and Somany Ceramics (SOMC IN) to understand...

Pranav Bhavsar

India Channel Insight | Havells, Symphony, TTK Prestige, Indigo Paints, Reliance, APL Apollo, Aptus

For this insight, we present our takeaways from interaction with channels associated with Havells, Symphony, TTK Prestige, Indigo Paints, Reliance,...

Pranav Bhavsar

APL Apollo Tubes: Q1FY22 Result Review

APL Apollo Tubes (APL) reported strong improvement in profitability for Q1FY22; its EBITDA was a strong beat to our forecast. APL's EBIDTA/tonne...

IDBI Capital

India: Stock Reclassification & Active Portfolio Management

There are a lot of segment changes expected in July when AMFI recategorizes stocks and mutual funds start to rebalance their portfolios. We...

Brian Freitas

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