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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Index Rebalance

<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><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>After missing out on index inclusion at the June rebalance, <a href="https://www.smartkarma.com/entities/wipro-ltd" target="_blank" data-smartkarma-citation="entities:15360:1" rel="noopener">Wipro Ltd (WPRO IN)</a> has a high probability of being included at the upcoming review. <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 most likely deletion from the index.</p><p><a href="https://www.smartkarma.com/entities/wipro-ltd" target="_blank" data-smartkarma-citation="entities:15360:1" rel="noopener">Wipro Ltd (WPRO IN)</a> will have over 2 days of ADV (and 7 days of delivery volume) to buy from passive funds while <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> will have nearly 3.5 days of ADV (10 days of delivery volume) to sell.</p>

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.After missing out on index inclusion at the June rebalance, Wipro Ltd (WPRO IN) has a high probability of being included at the upcoming review. Bajaj Auto Ltd (BJAUT IN) is the most likely deletion from the index.Wipro Ltd (WPRO IN) will have over 2 days of ADV (and 7 days of delivery volume) to buy from passive funds while Bajaj Auto Ltd (BJAUT IN) will have nearly 3.5 days of ADV (10 days of delivery volume) to sell.

Sensex Dec 2021 Index Rebalance Preview: Wipro Could Be IN, Pushing Bajaj Auto OUT

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 Capital Markets

Maruti Suzuki India / Equity Capital Markets

<p>In this Insight, we present commentary from our interactions with one of the largest dealers 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> , Store Manager of Royal Enfield from <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> , Dealership owners of <a href="https://www.smartkarma.com/entities/hyundai-motor-co" target="_blank" data-smartkarma-citation="entities:155:1" rel="noopener">Hyundai Motor Co (005380 KS)</a> and an Electric Vehicle (EV) of <a href="https://www.smartkarma.com/entities/greaves-cotton-ltd" target="_blank" data-smartkarma-citation="entities:11664:1" rel="noopener">Greaves Cotton (GRV IN)</a>. We also share anecdotal commentary that we have gathered about <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> .</p>
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<h3>About India Channel Insight </h3>
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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 emerging out of these interactions and have been aiding us to generate interesting trade ideas and have often proven to be reliable sources of qualitative alpha.</p>
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In this Insight, we present commentary from our interactions with one of the largest dealers of Maruti Suzuki India (MSIL IN) , Store Manager of Royal Enfield from Eicher Motors (EIM IN) , Dealership owners of Hyundai Motor Co (005380 KS) and an Electric Vehicle (EV) of Greaves Cotton (GRV IN). We also share anecdotal commentary that we have gathered about Tata Motors Ltd (TTMT IN) .


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 emerging out of these interactions and have been aiding us to generate interesting trade ideas and have often proven to be reliable sources of qualitative alpha.


India Channel Insight | Maruti, Hyundai, Tata Motors, Eicher, Ola Electric

Thematic (Sector/Industry)

<p>Building on our earlier insight <a href="https://www.smartkarma.com/insights/india-channel-insight-a-tier-2-city-s-battle-with-the-second-wave-welcome-to-the-jungle" target="_blank" data-smartkarma-citation="insights:50005" rel="noopener">India Channel Insight | A Tier -2 City's Battle with The Second Wave | Welcome to the Jungle</a> on India's fight with the second wave, in this insight, we present our takeaways from interactions and experiences of 10 COVID positive patients (including self) with an objective to understand and estimate the impact on discretionary spending, the possibility of job losses and stress if any on small and medium scale businesses.  </p>

Building on our earlier insight India Channel Insight | A Tier -2 City's Battle with The Second Wave | Welcome to the Jungle on India's fight with the second wave, in this insight, we present our takeaways from interactions and experiences of 10 COVID positive patients (including self) with an objective to understand and estimate the impact on discretionary spending, the possibility of job losses and stress if any on small and medium scale businesses.  

India Channel Insight | Living in the Second Wave | The Battle Is On

Equity Bottom-Up

<p>In this insight we present key takeaways from our interaction with a Hero Motocorp sales manager based in southern India with more than 20 years of experience. Having been in the industry for two decades, he possesses a thorough, in depth knowledge of the two wheeler industry in India and its competitive factors. </p>

In this insight we present key takeaways from our interaction with a Hero Motocorp sales manager based in southern India with more than 20 years of experience. Having been in the industry for two decades, he possesses a thorough, in depth knowledge of the two wheeler industry in India and its competitive factors. 

Hero Motocorp (HMCL IN) | Channel Interactions Point to a Wide Disconnect

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

Ankit Agrawal, CFA

Equity L/S Analyst | Forensic Accounting | India

<p><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> reported its Q3FY21 earnings this week. While Eicher is no doubt a dominant player in the premium motorcycle segment in India, we believe that the product cycle for Royal Enfield (RE) is maturing. To counter it, Eicher seems to launching new models like Meteor. It is also taking new initiatives like Make it Yours (MiY) to engage with customers and sustain the brand's aspirational value. It has also enhanced its digital footprint significantly. However, we doubt this would be enough.</p>
<p>RE is also expanding its distribution in the international markets rapidly. However, we do not share the same level of optimism as RE's management on the adoption of RE's motorcycles in the international markets. We remain skeptical on the scalable potential of the exports business.</p>
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<p><strong>Overall, we think RE would be better off in accepting that the product cycle is maturing. It should focus on core models and key markets to drive growth rather than spread itself too thin and broad in its quest for growth. </strong></p>
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<p>In our note below, we discuss:</p>
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<li>Key Structural Concerns</li>
<li>Management Updates &amp; Outlook</li>
<li>Near-term Operational Risks</li>
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Eicher Motors (EIM IN) reported its Q3FY21 earnings this week. While Eicher is no doubt a dominant player in the premium motorcycle segment in India, we believe that the product cycle for Royal Enfield (RE) is maturing. To counter it, Eicher seems to launching new models like Meteor. It is also taking new initiatives like Make it Yours (MiY) to engage with customers and sustain the brand's aspirational value. It has also enhanced its digital footprint significantly. However, we doubt this would be enough.
RE is also expanding its distribution in the international markets rapidly. However, we do not share the same level of optimism as RE's management on the adoption of RE's motorcycles in the international markets. We remain skeptical on the scalable potential of the exports business.

Overall, we think RE would be better off in accepting that the product cycle is maturing. It should focus on core models and key markets to drive growth rather than spread itself too thin and broad in its quest for growth. 

In our note below, we discuss:

Key Structural Concerns
Management Updates &amp; Outlook
Near-term Operational Risks


Eicher (Royal Enfield): Spreading Itself Thin in the Face of Maturing Product Cycle

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 2021 Index Rebalance Preview: Wipro Could Be IN, Pushing Bajaj Auto OUT

Half way through the review period for the Sensex, we expect Wipro replaces Bajaj Auto at the December rebalance. Both stocks trade cheaper than...

Brian Freitas

India Channel Insight | Maruti, Hyundai, Tata Motors, Eicher, Ola Electric

In this Insight, we present commentary from our interactions with dealers of Maruti, Hyundai, Royal Enfield. We also present anecdotal commentary...

Pranav Bhavsar

India Channel Insight | Living in the Second Wave | The Battle Is On

in this insight, we present our takeaways from interactions and experiences of 10 COVID positive patients with an objective to understand and...

Pranav Bhavsar

Hero Motocorp (HMCL IN) | Channel Interactions Point to a Wide Disconnect

Our limited channel interaction points to a wide disconnect between Hero Motocorp (HMCL IN) management commentary and ground reality.

Pranav Bhavsar

Eicher (Royal Enfield): Spreading Itself Thin in the Face of Maturing Product Cycle

We believe that the product cycle for Royal Enfield (RE) is maturing. Instead of accepting it and focusing on its core, RE might be spreading...

Ankit Agrawal, CFA

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