External broker reports(aggregated public sources), Sharekhan

Sharekhan

External broker reports(aggregated public sources)

Sharekhan is India's leading broking house providing services from easy online trading, research to wide array of financial products. 

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.

Equity Bottom-Up

<ul><li>Sharekhan's research report onGranules India Our interaction with the CFO showed that the company is focusing on value-added products to increase its EBITDA Margins to 22%.</li><li>Granules is shifting its focus from an API company to a formulations company and intends to increase its formulation contribution from 65% to 70% in the next two years.</li><li>Granules is also setting up a pilot project for DCDA, which is expected to be completed by 4QFY24E, and PAP at the Vizag plant, which will be completed by FY25E under the project CZERO.</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>

Sharekhan's research report onGranules India Our interaction with the CFO showed that the company is focusing on value-added products to increase its EBITDA Margins to 22%.Granules is shifting its focus from an API company to a formulations company and intends to increase its formulation contribution from 65% to 70% in the next two years.Granules is also setting up a pilot project for DCDA, which is expected to be completed by 4QFY24E, and PAP at the Vizag plant, which will be completed by FY25E under the project CZERO.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.

Granules India Ltd- - Increased Focus on Value-Added Products to Drive Margins

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

<ul>
<li>A news report has indicated that SEBI is looking to tighten criteria used for inclusion and continued availability of stocks in the Futures &amp; Options (F&amp;O) segment of the market.</li>
<li>Our analysis shows 30 stocks could be deleted from the F&amp;O segment while another 12 are close to deletion zone. If applied objectively, 22 stocks could be added to F&amp;O.</li>
<li>Deletion from the F&amp;O segment could see two stocks dropped from the <a href="https://www.smartkarma.com/entities/nifty-next-50-index" target="_blank" data-smartkarma-citation="entities:36053:1" rel="noopener">Nifty Next 50 Index</a> while inclusion in F&amp;O could see two stocks added to the <a href="https://www.smartkarma.com/entities/nifty-index" target="_blank" data-smartkarma-citation="entities:23617:1" rel="noopener">NIFTY Index</a>.</li>
</ul>


A news report has indicated that SEBI is looking to tighten criteria used for inclusion and continued availability of stocks in the Futures &amp; Options (F&amp;O) segment of the market.
Our analysis shows 30 stocks could be deleted from the F&amp;O segment while another 12 are close to deletion zone. If applied objectively, 22 stocks could be added to F&amp;O.
Deletion from the F&amp;O segment could see two stocks dropped from the Nifty Next 50 Index while inclusion in F&amp;O could see two stocks added to the NIFTY Index.


Impact of Potential Changes to India F&O Eligibility Criteria

External broker reports(aggregated public sources), ICICI Securities Ltd

ICICI Securities Limited

<p>About the stock: Granules is a large-scale vertically integrated company that manufactures API, intermediates and finished dosages and has seven manufacturing facilities along with B2B &amp; B2C marketing &amp; distribution.</p><ul><li>Revenues: Formulations – 52%, API (API+PFI) – 48%</li><li>Top five products (Paracetamol, Ibuprofen, Metformin, Methocarbamol, Guaifenesin) contributed 84% to FY21 revenues</li></ul><div class="content-highlight"><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></div>

About the stock: Granules is a large-scale vertically integrated company that manufactures API, intermediates and finished dosages and has seven manufacturing facilities along with B2B &amp; B2C marketing &amp; distribution.Revenues: Formulations – 52%, API (API+PFI) – 48%Top five products (Paracetamol, Ibuprofen, Metformin, Methocarbamol, Guaifenesin) contributed 84% to FY21 revenuesContent 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.

Granules Lndia: Strong Topline Amid Pandemic Challenges

External broker reports(aggregated public sources), Motilal Oswal Financial Services Limited

Motilal Oswal

<p>Granules India (GRAN) delivered a better-than-expected 1QFY22 performance, led by better off-take in the Intermediates (PFI) and Finished Dosage (FD) segments. The impact of the sharp rise in key starting materials (KSM) for Paracetamol was offset by controlled opex, driving better-thanexpected profitability during the quarter. The improved availability of KSMs and new launches would further enhance the performance going forward. We marginally tweak our EPS estimate for FY22/FY23E, factoring in a) the easing of the supply situation for KSMs and b) higher logistic costs.</p><div class="content-highlight"><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></div>

Granules India (GRAN) delivered a better-than-expected 1QFY22 performance, led by better off-take in the Intermediates (PFI) and Finished Dosage (FD) segments. The impact of the sharp rise in key starting materials (KSM) for Paracetamol was offset by controlled opex, driving better-thanexpected profitability during the quarter. The improved availability of KSMs and new launches would further enhance the performance going forward. We marginally tweak our EPS estimate for FY22/FY23E, factoring in a) the easing of the supply situation for KSMs and b) higher logistic costs.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.

On track to build product pipeline as well as capacity

<div><p>The Indian mutual fund industry has assets of almost INR 6.6 trillion across Multi cap, Large Cap, Large and Mid Cap, Mid Cap, Small Cap and Flexi Cap equity schemes. Equity schemes classified as large cap need to have at least 80% of their assets invested in large cap stocks, large and mid cap schemes need to have at least 35% of their assets in large cap stocks and at least 35% in mid cap stocks, mid cap funds need to hold at least 65% of their assets in mid cap stocks, and small cap funds need to hold at least 65% of their assets in small cap stocks. Flexi cap funds can invest across market caps.</p></div><div>
<p>The Association of Mutual Funds in India (AMFI) publishes the list of the stocks in each market cap segment in January and July each year and mutual funds have one month to rebalance their portfolios to adhere to the new categorization.</p>
<p>At the next recategorization in July 2021, we see 7 stocks moving from the mid cap segment to the large cap segment with an equal number of stocks moving the other way, and 13 stocks are expected to move from the small cap segment to the mid cap segment with the 16 stocks moving from the mid cap to the small cap segment. There are 3 recent listings that will enter the mid cap segment with over 18 joining the small cap segment.</p>
<p>Historically, the stocks migrating upward to a higher market cap segment have outperformed stocks that migrate to a lower market cap segment over the 1 month and 2 month period post the publishing of the AMFI list. This can be attributed to fund managers realigning their portfolios to meet the new categorization. This provides opportunities to pre-position for the move and unwind post the announcement of the reclassification.</p>
</div>

The Indian mutual fund industry has assets of almost INR 6.6 trillion across Multi cap, Large Cap, Large and Mid Cap, Mid Cap, Small Cap and Flexi Cap equity schemes. Equity schemes classified as large cap need to have at least 80% of their assets invested in large cap stocks, large and mid cap schemes need to have at least 35% of their assets in large cap stocks and at least 35% in mid cap stocks, mid cap funds need to hold at least 65% of their assets in mid cap stocks, and small cap funds need to hold at least 65% of their assets in small cap stocks. Flexi cap funds can invest across market caps.
The Association of Mutual Funds in India (AMFI) publishes the list of the stocks in each market cap segment in January and July each year and mutual funds have one month to rebalance their portfolios to adhere to the new categorization.
At the next recategorization in July 2021, we see 7 stocks moving from the mid cap segment to the large cap segment with an equal number of stocks moving the other way, and 13 stocks are expected to move from the small cap segment to the mid cap segment with the 16 stocks moving from the mid cap to the small cap segment. There are 3 recent listings that will enter the mid cap segment with over 18 joining the small cap segment.
Historically, the stocks migrating upward to a higher market cap segment have outperformed stocks that migrate to a lower market cap segment over the 1 month and 2 month period post the publishing of the AMFI list. This can be attributed to fund managers realigning their portfolios to meet the new categorization. This provides opportunities to pre-position for the move and unwind post the announcement of the reclassification.


India: Stock Reclassification & Active Portfolio Management

India

Granules India Limited is a global pharmaceutical company engaged in the manufacturing and selling of Active Pharmaceutical Ingredients (APIs), Pharmaceutical Formulation Intermediates (PFIs) and Finished Dosages (FDs).

Granules India (GRAN IN)

Granules India Ltd- - Increased Focus on Value-Added Products to Drive Margins

Sharekhan's research report onGranules India Our interaction with the CFO showed that the company is focusing on value-added products to increase...

Sharekhan

Impact of Potential Changes to India F&O Eligibility Criteria

News reports indicate that SEBI is looking to tighten criteria for inclusion and continued availability of stocks in the F&O segment. 30 stocks...

Brian Freitas

Granules Lndia: Strong Topline Amid Pandemic Challenges

Granules is a large-scale vertically integrated company that manufactures API, intermediates and finished dosages and has seven manufacturing...

ICICI Securities Limited

On track to build product pipeline as well as capacity

Granules India (GRAN) delivered a better-than-expected 1QFY22 performance, led by better off-take in the Intermediates (PFI) and Finished Dosage...

Motilal Oswal

India: Stock Reclassification & Active Portfolio Management

There are a lot of segment changes expected in July when AMFI recategorizes stocks and mutual funds start to rebalance their portfolios. We...

Brian Freitas