Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

<ul>
<li>In our prior EM Strategy (August 7, 2023) we discussed how MSCI EM (EEM-US) was near major 1+ year resistance at $42.</li>
<li>After being unable to break out, EEM-US consolidation has continued, and is again approaching major 10.5-month support at $37-$37.50, which has been our important line-in-the-sand throughout 2023.</li>
<li>As long as EEM-US is above $37, we are buyers on this pullback.</li>
</ul>


In our prior EM Strategy (August 7, 2023) we discussed how MSCI EM (EEM-US) was near major 1+ year resistance at $42.
After being unable to break out, EEM-US consolidation has continued, and is again approaching major 10.5-month support at $37-$37.50, which has been our important line-in-the-sand throughout 2023.
As long as EEM-US is above $37, we are buyers on this pullback.


MSCI EM Index Approaching 10.5-Month Support; Remain Overweight India; Many EM Buys

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.

Thematic (Sector/Industry)

<ul><li>In Q1FY24, the Pharma Coverage universe posted robust revenue growth of 20.5%/6.1% YoY/QoQ on account of volume rampup, new launches (especially Revlimid), and stabilizing pricing pressure in the US base business.</li><li>EBITDA margin improved by a healthy 581bps/234bps YoY/QoQ amidst normalizing cost inflation and stabilizing prices.</li><li>US sales was robust, aided by gRevlimid, new launches, and increased demand for resilient suppliers amid drug shortages.</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.

In Q1FY24, the Pharma Coverage universe posted robust revenue growth of 20.5%/6.1% YoY/QoQ on account of volume rampup, new launches (especially Revlimid), and stabilizing pricing pressure in the US base business.EBITDA margin improved by a healthy 581bps/234bps YoY/QoQ amidst normalizing cost inflation and stabilizing prices.US sales was robust, aided by gRevlimid, new launches, and increased demand for resilient suppliers amid drug shortages.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.

Equity Bottom-Up

<ul><li>Aurobindo Pharma's PAT stood above our estimates by 3.7%.</li><li>The company’s consolidated revenue grew by 9.9% YoY and gross margins improved by 24bps YoY.</li><li>EBITDA margins improved by 179bps YoY. The US revenue at $402 Mn was up 8.6% QoQ. </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.

Aurobindo Pharma's PAT stood above our estimates by 3.7%.The company’s consolidated revenue grew by 9.9% YoY and gross margins improved by 24bps YoY.EBITDA margins improved by 179bps YoY. The US revenue at $402 Mn was up 8.6% QoQ. 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.

Aurobindo Pharma Ltd - Number of Growth Levers in Place to Drive Topline

Oil & Natural Gas Corp / Technical Analysis

<ul>
<li>MSCI EM (EEM-US) continues to show signs of bottoming as it has held above our $37-$37.50 line-in-the-sand. </li>
<li>Major 1+ year resistance on the EEM-US is at $42, and a breakout would mean the bottom is in (and would be a buy signal).</li>
<li>Favor EM over EAFE due to 2.5-year downtrend reversal in the EAFE vs. EM ratio. Top Overweights: Taiwan, India, Greece; Attractive EM Sectors: Energy, Technology, Consumer Discretionary, Financials</li>
</ul>


MSCI EM (EEM-US) continues to show signs of bottoming as it has held above our $37-$37.50 line-in-the-sand. 
Major 1+ year resistance on the EEM-US is at $42, and a breakout would mean the bottom is in (and would be a buy signal).
Favor EM over EAFE due to 2.5-year downtrend reversal in the EAFE vs. EM ratio. Top Overweights: Taiwan, India, Greece; Attractive EM Sectors: Energy, Technology, Consumer Discretionary, Financials


MSCI Emerging Market Index Testing 1+ Year Resistance; Favor EM over EAFE; Top EM Buys Highlighted

<ul><li>Aurobindo Pharma' reported PAT missed estimates by 5%. Consol. Revenue grew by 11.4% YoY, Gross margins decreased by 183 bps YoY and EBITDA margins decreased by 130 bps YoY.</li><li>US revenue USD$ 370 Mn, +2% YoY, however injectable business in the US reported flat growth YoY despite good numbers of injectable approvals in last year.</li><li>Oral and OTC business has driven growth in the US by 6% and 17% YoY respectively.</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.

Aurobindo Pharma' reported PAT missed estimates by 5%. Consol. Revenue grew by 11.4% YoY, Gross margins decreased by 183 bps YoY and EBITDA margins decreased by 130 bps YoY.US revenue USD$ 370 Mn, +2% YoY, however injectable business in the US reported flat growth YoY despite good numbers of injectable approvals in last year.Oral and OTC business has driven growth in the US by 6% and 17% YoY respectively.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.

Aurobindo Pharma Ltd - Number of Livers to Drive Topline

India

Aurobindo Pharma Limited manufactures and markets oral and sterile antibiotics, antibacterials, anti-ulcerants and other generic basic drugs. Products include semi-synthetic penicillin drugs like ampicillin and amoxycillinas well as antibiotics, which include cloxacillin and dicloxacillin. The Company also manufactures formulations like astemizole, domeperidone and omeprazole.

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Aurobindo Pharma (ARBP IN)

MSCI EM Index Approaching 10.5-Month Support; Remain Overweight India; Many EM Buys

$EEM is again approaching major 10.5-month support at $37-$37.50, which has been our important line-in-the-sand throughout 2023. As long as $EEM is...

Vermilion Research

Top Sector Ideas - Pharma

In Q1FY24, the Pharma Coverage universe posted robust revenue growth of 20.5%/6.1% YoY/QoQ on account of volume rampup, new launches (especially...

Axis Direct

Aurobindo Pharma Ltd - Number of Growth Levers in Place to Drive Topline

Aurobindo Pharma's PAT stood above our estimates by 3.7%. The company’s consolidated revenue grew by 9.9% YoY and gross margins improved by 24bps YoY.

Axis Direct

MSCI Emerging Market Index Testing 1+ Year Resistance; Favor EM over EAFE; Top EM Buys Highlighted

MSCI EM Index $EEM Testing 1+ Year Resistance; Favor EM over EAFE $EFA. Top EM Country Overweights: Taiwan, India, Greece; Attractive EM Sectors:...

Vermilion Research

Aurobindo Pharma Ltd - Number of Livers to Drive Topline

Aurobindo Pharma' reported PAT missed estimates by 5%. Consol. Revenue grew by 11.4% YoY, Gross margins decreased by 183 bps YoY and EBITDA margins...

Axis Direct

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