Value Investing

Vladimir Dimitrov, CFA

Equity Bottom-Up

<ul>
<li>Deere's share price underperformed the broader market, in spite of the company's strong results.</li>
<li>The expectations for the next half year are still highly optimistic and valuation seems to reflect that.</li>
<li>Unfortunately, these results are unlikely to be sustained over the medium-term and valuation is at risk.</li>
</ul>


Deere's share price underperformed the broader market, in spite of the company's strong results.
The expectations for the next half year are still highly optimistic and valuation seems to reflect that.
Unfortunately, these results are unlikely to be sustained over the medium-term and valuation is at risk.


Deere: Underperforming The Market Is The Most Likely Scenario Ahead

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

Escorts Kubota Limited / Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/escorts-ltd" target="_blank" data-smartkarma-citation="entities:6773:1" rel="noopener">Escorts Ltd (ESC IN)</a> has been losing market share. As per management, <strong>"there are no "big" problems and they will regain the market share"</strong>, but we do not think so. </li>
<li>Some flash channel checks are suggesting issues with some of the company's products. These issues still remain unaddressed as per some dealers and customers. </li>
<li>While the export opportunity and overall industry dynamics are positive unless the market share is regained, growth is likely to be slower than industry. </li>
</ul>



Escorts Ltd (ESC IN) has been losing market share. As per management, "there are no "big" problems and they will regain the market share", but we do not think so. 
Some flash channel checks are suggesting issues with some of the company's products. These issues still remain unaddressed as per some dealers and customers. 
While the export opportunity and overall industry dynamics are positive unless the market share is regained, growth is likely to be slower than industry. 


Escorts Ltd (ESC IN) | Expected to Grow Slower than Industry

<ul>
<li>Consumer sentiment and demand environment is stable in Rural India. </li>
<li>There is a bit of optimism and hope of breaching FY20 volumes in FY23, supported with some pricing action. </li>
<li>Technical/Product issues are leading to a loss of market share for <a href="https://www.smartkarma.com/entities/escorts-ltd" target="_blank" data-smartkarma-citation="entities:6773:1" rel="noopener">Escorts Ltd (ESC IN)</a> </li>
</ul>


Consumer sentiment and demand environment is stable in Rural India. 
There is a bit of optimism and hope of breaching FY20 volumes in FY23, supported with some pricing action. 
Technical/Product issues are leading to a loss of market share for Escorts Ltd (ESC IN) 


India Channel Insight #37 | Escorts & Mahindra & Mahindra (Tractors)

Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

Equity Capital Markets

<ul><li>Despite continuing supply constraints, Deere managed a decent result without its margins taking too bad of a hit.</li><li>As reflected in the recent WASDE report, supply and demand factors drive up crop prices which should benefit Deere.</li><li>As a result, growers' profitability and cash flow remain strong which should give them a higher budget to spend on Deere’s offerings in the year.</li></ul>

Despite continuing supply constraints, Deere managed a decent result without its margins taking too bad of a hit.As reflected in the recent WASDE report, supply and demand factors drive up crop prices which should benefit Deere.As a result, growers' profitability and cash flow remain strong which should give them a higher budget to spend on Deere’s offerings in the year.

Deere & Company: Precision Agriculture & Other Drivers

Japan Specialist

Mark Chadwick

<ul>
<li>Kubota's stock declined in sympathy with agricultural major Deere following a quarterly earnings miss</li>
<li>Kubota faces similar supply chain and cost pressures, but it is the US housing market that is a bigger concern</li>
<li>We believe that the market is underestimating the earnings risk for Kubota should the housing market start to cool </li>
</ul>


Kubota's stock declined in sympathy with agricultural major Deere following a quarterly earnings miss
Kubota faces similar supply chain and cost pressures, but it is the US housing market that is a bigger concern
We believe that the market is underestimating the earnings risk for Kubota should the housing market start to cool 


Kubota (6326 JP) | US Housing Risk to Big to Ignore

United States

Deere & Company manufactures and distributes a range of agricultural, construction and forestry, and commercial and consumer equipment.  The Company supplies replacement parts for its own products and for those of other manufacturers. Deere also provides product and parts financing services. Deere and Company extends its services and products worldwide.

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Deere & Co (DE US)

Deere: Underperforming The Market Is The Most Likely Scenario Ahead

Deere's share price underperformed the broader market, in spite of the company's strong results. The expectations for the next half year are still...

Vladimir Dimitrov, CFA

Escorts Ltd (ESC IN) | Expected to Grow Slower than Industry

The tractor industry is poised well for a recovery. However, we believe Escorts Ltd (ESC IN)'s product issues will lead to its growth being slower...

Pranav Bhavsar

India Channel Insight #37 | Escorts & Mahindra & Mahindra (Tractors)

There is optimism among tractor dealers with regards to TIVs, but not all players are equal. Escorts Ltd (ESC IN)'s dealers are complaining about...

Pranav Bhavsar

Deere & Company: Precision Agriculture & Other Drivers

Despite continuing supply constraints, Deere managed a decent result without its margins taking too bad of a hit. As reflected in the recent WASDE...

Baptista Research

Kubota (6326 JP) | US Housing Risk to Big to Ignore

Supply chain and cost pressures abound, but it is the risk around a cooling US housing market concerns us the most. We think the stock could...

Mark Chadwick

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