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

Ankit Agrawal, CFA

Equity L/S Analyst | Forensic Accounting | India

Creating Wealth through Alpha and Compounding

Yellowstone Equity

Providing unbiased and independent research on Indian equities to global institutions and individual investors


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Regulatory Disclosure: 
Note that Ankit Agrawal (Proprietor of Yellowstone Equity) is a SEBI registered Research Analyst (Registration No.: INH000007216). Registration granted by SEBI and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors. Investment in securities market are subject to market risks. Read all the related documents carefully before investing.

Research Analyst Contact Details:
Address: A-412, Shilp Aaron, Sindhu Bhavan Road, Ahmedabad, Gujarat - 380059
Email: services@yellowstoneequity.com
Mobile: +91-7575817289

Compliance/Grievance Officer:
Name: Ankit Agrawal
Email: services@yellowstoneequity.com
Mobile: +91-7575817289
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Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/bajaj-finance-ltd" target="_blank" data-smartkarma-citation="entities:8950:1" rel="noopener">Bajaj Finance (BAF)</a> reported a strong Q1FY24 earnings, led by an all-time-high quarterly AUM growth of INR 22718cr. With this, BAF has upgraded its FY24 AUM growth guidance to 29-31%.</li>
<li>AUM growth was aided by the highest ever new loans in a quarter. New loans booked at 9.94mm in Q1FY24 were up 34% YoY and 31%+ QoQ.</li>
<li>Opex-To-NII has come down to 34.0% vs 35%+ earlier, led by operational leverage and deceleration in investments. This has helped the ROE to jump to 24.0% vs 23.1% YoY.</li>
</ul>



Bajaj Finance (BAF) reported a strong Q1FY24 earnings, led by an all-time-high quarterly AUM growth of INR 22718cr. With this, BAF has upgraded its FY24 AUM growth guidance to 29-31%.
AUM growth was aided by the highest ever new loans in a quarter. New loans booked at 9.94mm in Q1FY24 were up 34% YoY and 31%+ QoQ.
Opex-To-NII has come down to 34.0% vs 35%+ earlier, led by operational leverage and deceleration in investments. This has helped the ROE to jump to 24.0% vs 23.1% YoY.


Bajaj Finance: Strong Q1FY24 Earnings - Guidance Upgraded

Equity Analyst - Asia Consumer Sector, Investory

Devi Subhakesan

Equity Analyst - Asia Consumer Sector

ASIA CONSUMER: INSIGHTS AND INVESTMENT IDEAS

Investory

Investory is a Singapore-based boutique independent equity research firm founded in January 2017 with a primary focus on consumption themes across Asia-Pacific.

We aim to generate investible ideas based on consumption trends and outlook. We screen our ideas on several parameters - product potential, long-term growth and management commitment being the most critical.  We follow a fundamental analysis approach in our stock selection process and are not restricted by market cap.

We aspire to grow into a leading source of unbiased research, free of conflict of interest, for investors yearning for independent and disciplined analysis. 

We also undertake bespoke research mandates to support our Institutional clients’ investment needs.

Our team comprises of professionals with extensive experience in the Asian equity markets, in areas ranging from research, servicing institutional clients and investment management.

Event-Driven

Bajaj Holdings and Investment / Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/bajaj-holdings-and-investment-ltd" target="_blank" data-smartkarma-citation="entities:11930:1" rel="noopener">Bajaj Holdings and Investment (BJHI IN)</a> is expected to be included in the MSCI India Index at the November SAIR (Read more about the index inclusion here: <a href="https://skr.ma/xhbPx" target="_blank" rel="noopener">https://skr.ma/xhbPx</a>)</li>
<li>Bajaj Holdings, a holding and investment company, with significant stakes in <a href="https://www.smartkarma.com/entities/bajaj-auto-ltd" target="_blank" data-smartkarma-citation="entities:3613:1" rel="noopener">Bajaj Auto Ltd</a> and <a href="https://www.smartkarma.com/entities/bajaj-finserv-ltd" target="_blank" data-smartkarma-citation="entities:5669:1" rel="noopener">Bajaj Finserv </a>has historically traded at a steep discount to the market value of investments. </li>
<li>Its Holdco discount has narrowed to around 53%  and has the potential to narrow further with greater ownership and visibility post the likely index inclusion.</li>
</ul>



Bajaj Holdings and Investment (BJHI IN) is expected to be included in the MSCI India Index at the November SAIR (Read more about the index inclusion here: https://skr.ma/xhbPx)
Bajaj Holdings, a holding and investment company, with significant stakes in Bajaj Auto Ltd and Bajaj Finserv has historically traded at a steep discount to the market value of investments. 
Its Holdco discount has narrowed to around 53%  and has the potential to narrow further with greater ownership and visibility post the likely index inclusion.


Bajaj Holdings (BJHI IN): Potential Index Inclusion Can Narrow Hold Co. Discount Further

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

Go Digit General Insurance / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/go-digit-general-insurance" target="_blank" data-smartkarma-citation="entities:36266:1" rel="noopener">Go Digit General Insurance</a> is looking to raise about US$503m in its upcoming India IPO. The deal will be run by ICICISec, MS, Axis, Edelweiss, HDFC Bank and IIFL.</li>
<li>Go Digit General Insurance is a digital full stack insurance company, offering motor insurance, health insurance, travel insurance, property insurance, marine insurance, liability insurance and other insurance products.</li>
<li>In this note, we talk about the positive aspects of the deal.</li>
</ul>



Go Digit General Insurance is looking to raise about US$503m in its upcoming India IPO. The deal will be run by ICICISec, MS, Axis, Edelweiss, HDFC Bank and IIFL.
Go Digit General Insurance is a digital full stack insurance company, offering motor insurance, health insurance, travel insurance, property insurance, marine insurance, liability insurance and other insurance products.
In this note, we talk about the positive aspects of the deal.


Go Digit General Insurance Pre-IPO - The Positives - Has Been Growing a Lot Faster than the Industry

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>Steady Industry Performance: In Sep’22, the life insurance industry witnessed a steady performance in NBP/APE growth, which stood at 17.3/11.5% YoY and 48.6/9.8% MoM.</li><li>Strong NBP growth on an MoM basis was largely on account of LIC’s performance.</li><li>In Sep’22, the private players’ performance was quite lacklusture, reporting a de-growth of 13.9%/5.1% YoY in NBP/APE. </li></ul><p><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></p>

Steady Industry Performance: In Sep’22, the life insurance industry witnessed a steady performance in NBP/APE growth, which stood at 17.3/11.5% YoY and 48.6/9.8% MoM.Strong NBP growth on an MoM basis was largely on account of LIC’s performance.In Sep’22, the private players’ performance was quite lacklusture, reporting a de-growth of 13.9%/5.1% YoY in NBP/APE. 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.

Life Insurance Companies Performance – Sep’22 and H1FY23

<ul>
<li>BAF reported strong Q4FY22 earnings led by 1) healthy AUM growth and 2) decline in provisioning. YoY, the NIM growth was similar to the AUM growth suggesting no margin compression.</li>
<li>However, QoQ, BAF witnessed NIM compression, partly driven by interest reversal from a corporate account that became NPA. Overall, the management is confident of maintaining NIMs at current level. </li>
<li>The pace of core AUM growth also declined QoQ. However, this could be due to seasonality and despite declining pace, Q4FY22 core AUM growth was still healthy at 5%+.</li>
</ul>


BAF reported strong Q4FY22 earnings led by 1) healthy AUM growth and 2) decline in provisioning. YoY, the NIM growth was similar to the AUM growth suggesting no margin compression.
However, QoQ, BAF witnessed NIM compression, partly driven by interest reversal from a corporate account that became NPA. Overall, the management is confident of maintaining NIMs at current level. 
The pace of core AUM growth also declined QoQ. However, this could be due to seasonality and despite declining pace, Q4FY22 core AUM growth was still healthy at 5%+.


Bajaj Finance (BAF): Back to Pre-COVID Like Stellar Performance!

India

Bajaj Finserv Ltd. is currently engaged in life insurance; general insurance and consumer finance businesses and has plans to expand its business by offering a wide array of financial products and services in India. The Company is also active in wind-energy generation.

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Bajaj Finserv (BJFIN IN)

Bajaj Finance: Strong Q1FY24 Earnings - Guidance Upgraded

BAF reported a strong Q1FY24 with record AUM growth and customer acquisition, leading it to upgrade its FY24 guidance. At current valuation, BAF...

Ankit Agrawal, CFA

Bajaj Holdings (BJHI IN): Potential Index Inclusion Can Narrow Hold Co. Discount Further

Holdco discount, currently at 53% of NAV, has the potential to narrow further with greater ownership and visibility post the likely index inclusion

Devi Subhakesan

Go Digit General Insurance Pre-IPO - The Positives - Has Been Growing a Lot Faster than the Industry

Go Digit General Insurance is looking to raise about US$503m in its upcoming India IPO. Go Digit is a digital full stack insurance company.

Sumeet Singh

Life Insurance Companies Performance – Sep’22 and H1FY23

Steady Industry Performance: In Sep’22, the life insurance industry witnessed a steady performance in NBP/APE growth, which stood at 17.3/11.5% YoY...

Axis Direct

Bajaj Finance (BAF): Back to Pre-COVID Like Stellar Performance!

BAF reported stellar Q4FY22 earnings led by growing AUM and declining provisions. As per our estimates, an investment in BAF's stock presents an...

Ankit Agrawal, CFA

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