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

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<h2>Channel Interactions </h2>
<p><a href="https://www.smartkarma.com/entities/bandhan-bank-ltd" target="_blank" data-smartkarma-citation="entities:26705:1" rel="noopener">Bandhan Bank Ltd (BANDHAN IN)</a>: DSC managers in Bihar, Maharashtra and Karnataka indicate stress likely to remain for a longer period as COVID spreads in the hinterland. </p>
<p><a href="https://www.smartkarma.com/entities/hero-motocorp-ltd" target="_blank" data-smartkarma-citation="entities:2391:1" rel="noopener">Hero Motocorp (HMCL IN)</a>: Dealer health continues to deteriorate. With widespread lockdowns, interest costs for dealers are mounting up. </p>
<p><a href="https://www.smartkarma.com/entities/bata-india-ltd" target="_blank" data-smartkarma-citation="entities:3051:1" rel="noopener">Bata India Ltd (BATA IN)</a> : Early expectations of re-opening remain muted. Normalisation still two quarters away. </p>
<p><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>: NEST's rural plans may be in trouble. COVID and its impact on premium products could be felt more putting NEST's ambitious plan to expand in rural India. Underperformance unless a major risk-off is likely to continue. </p>
<h2>About India Channel Insight</h2>
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<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>
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Channel Interactions 
Bandhan Bank Ltd (BANDHAN IN): DSC managers in Bihar, Maharashtra and Karnataka indicate stress likely to remain for a longer period as COVID spreads in the hinterland. 
Hero Motocorp (HMCL IN): Dealer health continues to deteriorate. With widespread lockdowns, interest costs for dealers are mounting up. 
Bata India Ltd (BATA IN) : Early expectations of re-opening remain muted. Normalisation still two quarters away. 
Nestle India (NEST IN): NEST's rural plans may be in trouble. COVID and its impact on premium products could be felt more putting NEST's ambitious plan to expand in rural India. Underperformance unless a major risk-off is likely to continue. 
About India Channel Insight


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.  


India Channel Insight | Bandhan, Hero, Bata, Nestle

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.

<p>Note - This is simply an event-update quick note.</p><p>The GST council in India has announced reduction in GST rates on several consumer products - effective 27th July 2018. Details as below -  </p><ul>
<li>GST on 17 Consumer electronics products – Television (up to 27 inches), Washing Machine, Refrigerator, Mixer, Juicer, Grinder etc cut from 28% to 18%</li>
<li>5% GST ceiling on footwear raised from Rs 500 to Rs 1000 MRP</li>
<li>GST on paints &amp; varnishes, wall putty cut from 28% to 18%</li>
<li>GST on all leather items cut from 28% to…</li>
</ul>

Note - This is simply an event-update quick note.The GST council in India has announced reduction in GST rates on several consumer products - effective 27th July 2018. Details as below -  
GST on 17 Consumer electronics products – Television (up to 27 inches), Washing Machine, Refrigerator, Mixer, Juicer, Grinder etc cut from 28% to 18%
5% GST ceiling on footwear raised from Rs 500 to Rs 1000 MRP
GST on paints &amp; varnishes, wall putty cut from 28% to 18%
GST on all leather items cut from 28% to…


GST Rates Revised Downwards - To Boost Org. Players in Consumer Disc. & Building Mat Sectors

Value investor- India mid & small caps

Bhaskar Chakraborty

<ul><li>India’s second largest listed footwear maker with a track record of steady growth and improving profitability.</li><li>Likely to be a beneficiary of GST implementation with 50% of the footwear market unorganised.</li><li>Its key brand- Sparx is priced at a discount to aspirational brands like Adidas, Puma and Nike presenting an attractive alternative to the price conscious customer.</li><li>Growth has come under pressure in FY16-17 owing to availability of premium brands in Tier III cities and beyond via the online channel. Aspirational brands with deep pockets have priced aggressively resulting in downward pressure on Relaxo’s pricing.</li><li>Further, its brands School mate, Flite and Bahamas have failed to make any impact in the online channel.</li><li>Relaxo’s in-house manufacturing model requires significant capex to grow earnings. 50-65% of EBITDA gets converted to operating cashflow (OCF) but less than 10% of OCF converts into free cashflow.</li><li>We expect low teens earnings Cagr over FY16-19. Stock is trading at 43x FY18 Bloomberg consensus EPS estimate. Recommend Sell.</li></ul>

India’s second largest listed footwear maker with a track record of steady growth and improving profitability.Likely to be a beneficiary of GST implementation with 50% of the footwear market unorganised.Its key brand- Sparx is priced at a discount to aspirational brands like Adidas, Puma and Nike presenting an attractive alternative to the price conscious customer.Growth has come under pressure in FY16-17 owing to availability of premium brands in Tier III cities and beyond via the online channel. Aspirational brands with deep pockets have priced aggressively resulting in downward pressure on Relaxo’s pricing.Further, its brands School mate, Flite and Bahamas have failed to make any impact in the online channel.Relaxo’s in-house manufacturing model requires significant capex to grow earnings. 50-65% of EBITDA gets converted to operating cashflow (OCF) but less than 10% of OCF converts into free cashflow.We expect low teens earnings Cagr over FY16-19. Stock is trading at 43x FY18 Bloomberg consensus EPS estimate. Recommend Sell.

India Consumer Discretionary: Relaxo Footwear- Burden of Growth, Inflated Valuation

India

Bata India Limited manufactures a wide range of leather, rubber/canvas and plastic footwear products.  The Company also manufactures sports apparel and leather accessories.  Bata India sells its products through its chain of company owned retail stores in India, as well as to businesses in the USA, United Kingdom, Europe, the Middle East and the Far East.

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Bata India Ltd (BATA IN)

India Channel Insight | Bandhan, Hero, Bata, Nestle

As always channel checks are an important part of our research. In this insight, we bring you primary insight from channels of Bandhan, Hero, Bata,...

Pranav Bhavsar

GST Rates Revised Downwards - To Boost Org. Players in Consumer Disc. & Building Mat Sectors

Note - This is simply an event-update quick note.The GST council in India has announced reduction in GST rates on several consumer products -...

DC India Research

India Consumer Discretionary: Relaxo Footwear- Burden of Growth, Inflated Valuation

India’s second largest listed footwear maker with a track record of steady growth and improving profitability. Likely to be a beneficiary of GST...

Bhaskar Chakraborty

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52-week Range

Market Cap (USDm)

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