Forensic Analyst, Trudence Capital Advisors

Nitin Mangal

Forensic Analyst

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

<a href="https://www.smartkarma.com/entities/apollo-tyres-ltd" target="_blank" data-smartkarma-citation="entities:8423:1" rel="noopener">Apollo Tyres (APTY IN)</a> may be one of the leading Indian origin tyre manufacturers, but it has been facing concerns of its own, predominantly capital allocation woes, that has created several potholes on its roadmap.
The company has successfully (as it proclaims) been able to buy revenues, this however did not bring free cash flow to the books. Poor capital allocation has always been a feature of Apollo Tyres, and this once again got depicted in the Q3F21 results where the management decided to provide for impairment in one of its trademark European arm, Vredestein.

Apollo Tyres (APTY IN) may be one of the leading Indian origin tyre manufacturers, but it has been facing concerns of its own, predominantly capital allocation woes, that has created several potholes on its roadmap.
The company has successfully (as it proclaims) been able to buy revenues, this however did not bring free cash flow to the books. Poor capital allocation has always been a feature of Apollo Tyres, and this once again got depicted in the Q3F21 results where the management decided to provide for impairment in one of its trademark European arm, Vredestein.

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

The Indian mutual fund industry has assets of almost INR 5 trillion across Multi cap, Large Cap, Large and Mid Cap, Mid Cap and Small 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.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.In the upcoming recategorization in January 2021, we see 6 stocks moved from the mid cap segment to the large cap segment with an equal number of stocks moving the other way, and 12 stocks are expected to move from the small cap segment to the mid cap segment with the same number moving the other way. There are quite a few IPOs that will join the small cap list, with just 1 joining the large cap list and 1 joining the mid cap list.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.

The Indian mutual fund industry has assets of almost INR 5 trillion across Multi cap, Large Cap, Large and Mid Cap, Mid Cap and Small 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.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.In the upcoming recategorization in January 2021, we see 6 stocks moved from the mid cap segment to the large cap segment with an equal number of stocks moving the other way, and 12 stocks are expected to move from the small cap segment to the mid cap segment with the same number moving the other way. There are quite a few IPOs that will join the small cap list, with just 1 joining the large cap list and 1 joining the mid cap list.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: AMFI Stock Categorization Changes to Drive Active Portfolio Churn

Equity L/S Analyst | Forensic Accounting | India, Yellowstone Equity

Ankit Agrawal, CFA

Equity L/S Analyst | Forensic Accounting | India

Forensic Accounting

As promised at <a href="https://www.smartkarma.com/insights/smartkarma-webinar-accounting-and-insider-diagnostics" target="_blank" data-smartkarma-citation="insights:40146" rel="noopener">Smartkarma Webinar | Accounting and Insider Diagnostics</a>, we have extended our forensic analysis model to India. To learn more about our detailed forensic analysis framework, please refer to our original note on forensic analysis model that caters to Developed Asia at <a href="https://www.smartkarma.com/insights/a-forensic-analysis-tool-for-detecting-accounting-red-flags-focus-on-developed-asia" target="_blank" data-smartkarma-citation="insights:36832" rel="noopener">A Forensic Analysis Tool for Detecting Accounting Red Flags: Focus on Developed Asia</a>.
In this insight, we run our forensic analysis model through our India focused universe that comprises of 141 listed Indian companies that have futures available for shorting on NSE. We score these Indian listed companies to identify high-risk accounting candidates.

As promised at Smartkarma Webinar | Accounting and Insider Diagnostics, we have extended our forensic analysis model to India. To learn more about our detailed forensic analysis framework, please refer to our original note on forensic analysis model that caters to Developed Asia at A Forensic Analysis Tool for Detecting Accounting Red Flags: Focus on Developed Asia.
In this insight, we run our forensic analysis model through our India focused universe that comprises of 141 listed Indian companies that have futures available for shorting on NSE. We score these Indian listed companies to identify high-risk accounting candidates.

Forensic Accounting | High Risk Companies in India

Independent Research Analyst

Mamta Verma

DC India Research

DC India Research LLP (DCIR) is based out of Mumbai, India.

We specialize in providing customized, independent research across listed and unlisted companies in India across equities and credit including sectoral research. Our customers include India focussed PE funds, special situation funds, domestic AMCs, Wealth Advisory& PMS firms, Rating Agencies & Investment Advisors. 

The DCIR board consists of prominent names from the industry as well as CIO’s of Hedge funds.

In this note, we have reviewed the 9m-FY18 performance of the listed players in the Indian Tyre Sector.Note - This review will be followed on with the q4-FY18 results of the companies.Companies covered - <a href="https://www.smartkarma.com/entities/8423" target="_blank" data-smartkarma-citation="entities:8423:1">Apollo Tyres Ltd (APTY IN)</a>, <a href="https://www.smartkarma.com/entities/2930" target="_blank" data-smartkarma-citation="entities:2930:1">Mrf Ltd (MRF IN)</a>, <a href="https://www.smartkarma.com/entities/18722" target="_blank" data-smartkarma-citation="entities:18722:1">Ceat Ltd (CEAT IN)</a>, <a href="https://www.smartkarma.com/entities/8501" target="_blank" data-smartkarma-citation="entities:8501:1">Jk Tyre &amp; Industries Ltd (JKI IN)</a>, <a href="https://www.smartkarma.com/entities/16789" target="_blank" data-smartkarma-citation="entities:16789:1">Goodyear India Ltd (GDYR IN)</a>, <a href="https://www.smartkarma.com/entities/9603" target="_blank" data-smartkarma-citation="entities:9603:1">Tvs Srichakra Ltd (SRTY IN)</a>, <a href="https://www.smartkarma.com/entities/15331" target="_blank" data-smartkarma-citation="entities:15331:1">Balkrishna Industries Ltd (BIL IN)</a>1. Summary -<table class="table table-striped"><tbody>
<tr>
<td>Net Sales</td>
<td>Q3-FY18 YoY</td>
<td>Q3-FY18 QoQ</td>
<td>9M-FY18 YoY</td>
<td>9M-FY18 (Rs. Mn.)</td>
</tr>
<tr>
<td>Apollo Tyres Ltd.</td>
<td>17.13%</td>
<td>16.49%</td>
<td>9.</td>
</tr>
</tbody></table>…

In this note, we have reviewed the 9m-FY18 performance of the listed players in the Indian Tyre Sector.Note - This review will be followed on with the q4-FY18 results of the companies.Companies covered - Apollo Tyres Ltd (APTY IN), Mrf Ltd (MRF IN), Ceat Ltd (CEAT IN), Jk Tyre &amp; Industries Ltd (JKI IN), Goodyear India Ltd (GDYR IN), Tvs Srichakra Ltd (SRTY IN), Balkrishna Industries Ltd (BIL IN)1. Summary -

Net Sales
Q3-FY18 YoY
Q3-FY18 QoQ
9M-FY18 YoY
9M-FY18 (Rs. Mn.)


Apollo Tyres Ltd.
17.13%
16.49%
9.

…

Equity Analyst, LightStream Research

Chacko Jacob

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

<h2>Company Overview</h2><a href="https://www.smartkarma.com/entities/2930" target="_blank" data-smartkarma-citation="entities:2930:1">Mrf Ltd (MRF IN)</a> traces its origin to a shack in Madras, India where it began as a manufacturer of rubber balloons in the 1940s. A decade later, the company started manufacturing tread rubber, thus beginning its foray into the tyre sector. The company went public in 1961 and in the same year partnered with US-based Mansfield Tire &amp; Rubber to manufacture and export tyres to the USA. Today, MRF operates 8 plants across India and uses its 4,500-strong dealers and 300 exclusive…

Company OverviewMrf Ltd (MRF IN) traces its origin to a shack in Madras, India where it began as a manufacturer of rubber balloons in the 1940s. A decade later, the company started manufacturing tread rubber, thus beginning its foray into the tyre sector. The company went public in 1961 and in the same year partnered with US-based Mansfield Tire &amp; Rubber to manufacture and export tyres to the USA. Today, MRF operates 8 plants across India and uses its 4,500-strong dealers and 300 exclusive…

MRF Set to Cement Leadership As Peers Strained By Capacity Constraints & High Debt Levels

India

Apollo Tyres Limited is an Indian multinational tyre manufacturing company that produces and sells tyres, tubes, and flaps for a diverse range of vehicles, including passenger cars, commercial vehicles, two-wheelers, and off-highway vehicles. The company markets its products under the Apollo and Vredestein brands. Apollo Tyres is headquartered in Gurugram, Haryana, India, and was founded in 1972.

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Apollo Tyres (APTY IN)

Apollo Tyres Limited: Drifting Apart

Apollo has been plagued with capital allocation woes since ages. The recent Vredestein impairment adds to the bitterness. One must wait for a long...

Nitin Mangal

India: AMFI Stock Categorization Changes to Drive Active Portfolio Churn

The reclassification of stocks to large, mid and small cap will set off a churn in mutual fund portfolios where historically stocks migrating...

Brian Freitas

Forensic Accounting | High Risk Companies in India

As promised at Smartkarma Webinar | Accounting and Insider Diagnostics, we have extended our forensic analysis model to India. To learn more about...

Ankit Agrawal, CFA

Sector Capcule: India Tyre Sector

In this note, we have reviewed the 9m-FY18 performance of the listed players in the Indian Tyre Sector.Note - This review will be followed on with...

DC India Research

MRF Set to Cement Leadership As Peers Strained By Capacity Constraints & High Debt Levels

Company OverviewMrf Ltd (MRF IN) traces its origin to a shack in Madras, India where it began as a manufacturer of rubber balloons in the 1940s. A...

Chacko Jacob

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