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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Index Rebalance

<ul>
<li>As expected, the December review of the <a href="https://www.smartkarma.com/entities/s-p-bse-sensex-index" target="_blank" data-smartkarma-citation="entities:31494:1" rel="noopener">S&amp;P BSE SENSEX Index (SENSEX INDEX)</a> sees <a href="https://www.smartkarma.com/entities/wipro-ltd" target="_blank" data-smartkarma-citation="entities:15360:1" rel="noopener">Wipro Ltd (WPRO IN)</a> added and <a href="https://www.smartkarma.com/entities/bajaj-auto-ltd" target="_blank" data-smartkarma-citation="entities:3613:1" rel="noopener">Bajaj Auto Ltd (BJAUT IN)</a> deleted.</li>
<li>Buying on Wipro is 2.5 days of ADV and 8.2 days of delivery volume, while selling on Bajaj Auto is 4.5 days of ADV and 8.9 days of delivery volume.</li>
<li>The overweight of the Information Technology sector in the Sensex gets even bigger and the Consumer Discretionary sector gets even more underweighted vs the BSE All Cap Index.</li>
</ul>


As expected, the December review of the S&amp;P BSE SENSEX Index (SENSEX INDEX) sees Wipro Ltd (WPRO IN) added and Bajaj Auto Ltd (BJAUT IN) deleted.
Buying on Wipro is 2.5 days of ADV and 8.2 days of delivery volume, while selling on Bajaj Auto is 4.5 days of ADV and 8.9 days of delivery volume.
The overweight of the Information Technology sector in the Sensex gets even bigger and the Consumer Discretionary sector gets even more underweighted vs the BSE All Cap Index.


SENSEX Dec 21 Index Rebalance: Wipro Added, Bajaj Auto Deleted

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

Thematic (Sector/Industry)

<h3>About The Narrative</h3>
<p>Earnings conference calls are important sources that aid us in the identification of potential catalysts and drivers of stock returns. Every quarter we go through these transcripts and connect them with primary research with the objective of assessing on-ground reality against management commentary. </p>
<p>The edition focuses on key quotes from the earnings transcripts of <a href="https://www.smartkarma.com/entities/maruti-suzuki-india-ltd" target="_blank" data-smartkarma-citation="entities:733:1" rel="noopener">Maruti Suzuki India (MSIL IN)</a> / <a href="https://www.smartkarma.com/entities/eicher-motors-ltd" target="_blank" data-smartkarma-citation="entities:18316:1" rel="noopener">Eicher Motors (EIM IN)</a> / <a href="https://www.smartkarma.com/entities/tata-motors-ltd" target="_blank" data-smartkarma-citation="entities:216:1" rel="noopener">Tata Motors Ltd (TTMT IN)</a> / <a href="https://www.smartkarma.com/entities/mahindra-mahindra-ltd" target="_blank" data-smartkarma-citation="entities:16441:1" rel="noopener">Mahindra &amp; Mahindra (MM IN)</a> / <a href="https://www.smartkarma.com/entities/ashok-leyland-ltd" target="_blank" data-smartkarma-citation="entities:20104:1" rel="noopener">Ashok Leyland (AL IN)</a>.</p>
<p>We have separated the quotes to highlight<em><strong> Business Performance and Demand Environment, Consumer Behaviour and Profile, Commodity Inflation, Discounts &amp; Margins, Inventory, New Products / EV / Hybrid,  Exports, Outlook.</strong></em></p>

About The Narrative
Earnings conference calls are important sources that aid us in the identification of potential catalysts and drivers of stock returns. Every quarter we go through these transcripts and connect them with primary research with the objective of assessing on-ground reality against management commentary. 
The edition focuses on key quotes from the earnings transcripts of Maruti Suzuki India (MSIL IN) / Eicher Motors (EIM IN) / Tata Motors Ltd (TTMT IN) / Mahindra &amp; Mahindra (MM IN) / Ashok Leyland (AL IN).
We have separated the quotes to highlight Business Performance and Demand Environment, Consumer Behaviour and Profile, Commodity Inflation, Discounts &amp; Margins, Inventory, New Products / EV / Hybrid,  Exports, Outlook.

The Narrative | Q2 FY22 | India 4Ws - Maruti, Eicher, Tata Motors, Mahindra, Ashok Leyland

<h3>About The Narrative</h3>
<p>Earnings conference calls are important sources that aid us in the identification of potential catalysts and drivers of stock returns. Every quarter we go through these transcripts and connect them with primary research with the objective of assessing on-ground reality against management commentary. </p>
<p>The edition focuses on key quotes from the earnings transcripts of <a href="https://www.smartkarma.com/entities/tvs-motor-co-ltd" target="_blank" data-smartkarma-citation="entities:16123:1" rel="noopener">TVS Motor (TVSL IN)</a> / <a href="https://www.smartkarma.com/entities/eicher-motors-ltd" target="_blank" data-smartkarma-citation="entities:18316:1" rel="noopener">Eicher Motors (EIM IN)</a> / <a href="https://www.smartkarma.com/entities/bajaj-auto-ltd" target="_blank" data-smartkarma-citation="entities:3613:1" rel="noopener">Bajaj Auto Ltd (BJAUT IN)</a> / <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> </p>
<p>We have separated the quotes to highlight<em><strong> Business Performance, Exports &amp; Premiumization, Commodity Inflation, Price Increases, Supply Chains and Margins, New Launches, EV, Demand  Environment &amp; Outlook.</strong></em></p>

About The Narrative
Earnings conference calls are important sources that aid us in the identification of potential catalysts and drivers of stock returns. Every quarter we go through these transcripts and connect them with primary research with the objective of assessing on-ground reality against management commentary. 
The edition focuses on key quotes from the earnings transcripts of TVS Motor (TVSL IN) / Eicher Motors (EIM IN) / Bajaj Auto Ltd (BJAUT IN) / Hero Motocorp (HMCL IN) 
We have separated the quotes to highlight Business Performance, Exports &amp; Premiumization, Commodity Inflation, Price Increases, Supply Chains and Margins, New Launches, EV, Demand  Environment &amp; Outlook.

The Narrative | Q2 FY22 | India 2Ws - TVS Motor / Eicher / Bajaj Auto/ Hero Motocorp

<div><p>The <a href="https://www.smartkarma.com/entities/s-p-bse-sensex-index" target="_blank" data-smartkarma-citation="entities:31494:1" rel="noopener">S&amp;P BSE SENSEX Index (SENSEX INDEX)</a> is the flagship index of the Bombay Stock Exchange (BSE). The index has 30 stocks and is a free float weighted market cap index. The next rebalance will be effective after the close of trading on 17 December.</p></div><div>
<p>The December review uses the market cap and turnover data from 1 May to 31 October to determine the stocks to be included and excluded from the index, and the announcement of the changes is done 4 weeks before the rebalance effective date.</p>
<p>With 6 days to go in the review period, we see <a href="https://www.smartkarma.com/entities/wipro-ltd" target="_blank" data-smartkarma-citation="entities:15360:1" rel="noopener">Wipro Ltd (WPRO IN)</a> as a high probability index addition. <a href="https://www.smartkarma.com/entities/bajaj-auto-ltd" target="_blank" data-smartkarma-citation="entities:3613:1" rel="noopener">Bajaj Auto Ltd (BJAUT IN)</a> is the lowest ranked index constituent and is a likely deletion from the index.</p>
<p>There is a (slim) possibility of <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> being deleted from the index if it fails the annualised traded value test. As it stands, it is touch and go for the stock.</p>
<p>Passive trackers will need to buy over 2 days of ADV on <a href="https://www.smartkarma.com/entities/wipro-ltd" target="_blank" data-smartkarma-citation="entities:15360:1" rel="noopener">Wipro Ltd (WPRO IN)</a> and sell over 3.5 days of ADV on <a href="https://www.smartkarma.com/entities/bajaj-auto-ltd" target="_blank" data-smartkarma-citation="entities:3613:1" rel="noopener">Bajaj Auto Ltd (BJAUT IN)</a>. If <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> is deleted instead, passive trackers will need to sell 7 days of ADV on the stock.</p>
<p>In terms of delivery volumes, the impact is much larger with passive trackers needing to buy 8.5 days on <a href="https://www.smartkarma.com/entities/wipro-ltd" target="_blank" data-smartkarma-citation="entities:15360:1" rel="noopener">Wipro Ltd (WPRO IN)</a>, while selling either 8.8 days on <a href="https://www.smartkarma.com/entities/bajaj-auto-ltd" target="_blank" data-smartkarma-citation="entities:3613:1" rel="noopener">Bajaj Auto Ltd (BJAUT IN)</a> or 13 days on <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>.</p>
</div>

The S&amp;P BSE SENSEX Index (SENSEX INDEX) is the flagship index of the Bombay Stock Exchange (BSE). The index has 30 stocks and is a free float weighted market cap index. The next rebalance will be effective after the close of trading on 17 December.
The December review uses the market cap and turnover data from 1 May to 31 October to determine the stocks to be included and excluded from the index, and the announcement of the changes is done 4 weeks before the rebalance effective date.
With 6 days to go in the review period, we see Wipro Ltd (WPRO IN) as a high probability index addition. Bajaj Auto Ltd (BJAUT IN) is the lowest ranked index constituent and is a likely deletion from the index.
There is a (slim) possibility of Nestle India (NEST IN) being deleted from the index if it fails the annualised traded value test. As it stands, it is touch and go for the stock.
Passive trackers will need to buy over 2 days of ADV on Wipro Ltd (WPRO IN) and sell over 3.5 days of ADV on Bajaj Auto Ltd (BJAUT IN). If Nestle India (NEST IN) is deleted instead, passive trackers will need to sell 7 days of ADV on the stock.
In terms of delivery volumes, the impact is much larger with passive trackers needing to buy 8.5 days on Wipro Ltd (WPRO IN), while selling either 8.8 days on Bajaj Auto Ltd (BJAUT IN) or 13 days on Nestle India (NEST IN).


Sensex Dec 2021 Index Rebalance Preview: Wipro Should Be Added, Deletion Has An Interesting Option

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

Ankit Agrawal, CFA

Equity L/S Analyst | Forensic Accounting | India

<p>Shareholder activism is on the rise in India. Institutional shareholders are making their vote count. Proxy advisor firms are also playing a role in guiding institutions to leverage their voting rights prudently. Over the past few months, we saw several instances of activism, mostly through adverse voting and complaining on public forums like earnings call. In a couple of cases, large shareholders (&gt;10% ownership) have also used their rights under Companies Act to call an extraordinary general meeting (EGM) to push for change of board and management.</p>
<p>In our detailed insight below, we discuss many such instances that transpired over the past few months. We also discuss our key takeaways for the Indian markets from this uprising activism.</p>

Shareholder activism is on the rise in India. Institutional shareholders are making their vote count. Proxy advisor firms are also playing a role in guiding institutions to leverage their voting rights prudently. Over the past few months, we saw several instances of activism, mostly through adverse voting and complaining on public forums like earnings call. In a couple of cases, large shareholders (&gt;10% ownership) have also used their rights under Companies Act to call an extraordinary general meeting (EGM) to push for change of board and management.
In our detailed insight below, we discuss many such instances that transpired over the past few months. We also discuss our key takeaways for the Indian markets from this uprising activism.

The Rise of Shareholder Activism in India

India

Eicher Motors Ltd. manufactures light commercial vehicles which are sold domestically and are also exported to other countries. Eicher Motors also manufactures two-wheelers and automotive gears.

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Eicher Motors (EIM IN)

SENSEX Dec 21 Index Rebalance: Wipro Added, Bajaj Auto Deleted

Wipro will be added to the Sensex in December while Bajaj Auto will be deleted. Impact on both stocks is over 8 days of delivery volume to trade....

Brian Freitas

The Narrative | Q2 FY22 | India 4Ws - Maruti, Eicher, Tata Motors, Mahindra, Ashok Leyland

The edition focuses on key quotes from the earnings transcripts of Maruti Suzuki / Eicher Motors / Tata Motors Ltd / Mahindra & Mahindra / Ashok...

Pranav Bhavsar

The Narrative | Q2 FY22 | India 2Ws - TVS Motor / Eicher / Bajaj Auto/ Hero Motocorp

The edition focuses on key quotes from the earnings transcripts of TVS Motor / Eicher Motors / Bajaj Auto / Hero Motocorp

Pranav Bhavsar

Sensex Dec 2021 Index Rebalance Preview: Wipro Should Be Added, Deletion Has An Interesting Option

Near the end of the review period, we see Wipro as a high probability add. Bajaj Auto could be deleted as the lowest ranked constituent, but Nestle...

Brian Freitas

The Rise of Shareholder Activism in India

Shareholder activism is on the rise in India with several recent instances where investors have raised concerns through voting rights and EGMs as...

Ankit Agrawal, CFA

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52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)