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

<p>Anecdotal, primary conversations along with constant innovation in product delivery are part of our core research process.  While there is no denying the value provided by 280 Character conversations on Twitter is immense and challenging, the ability to capture lengthier and broader conversations often has its own merits and hence we introduce <strong>"Beyond 280".</strong> The Objective of "Beyond 280" is to capture our channel conversations in as much detail as possible along with opening up our research architecture to enable our readers to draw their own conclusions if they require.  </p>
<p>We will try to post these conversations covering sectors, stocks and broader macro environment as frequently as possible. We are open to suggestions, so feel free to reach out via DMs.  </p>
<p>In this "Beyond 280", we present details of our conversation with an entrepreneur based in western India using <a href="https://www.smartkarma.com/entities/paytm-mobile-solutions-pvt-ltd" target="_blank" data-smartkarma-citation="entities:26149:1" rel="noopener">Paytm (PAYTM IN)</a>'s PoS solutions as a merchant for two of his businesses for over two and half years.</p>

Anecdotal, primary conversations along with constant innovation in product delivery are part of our core research process.  While there is no denying the value provided by 280 Character conversations on Twitter is immense and challenging, the ability to capture lengthier and broader conversations often has its own merits and hence we introduce "Beyond 280". The Objective of "Beyond 280" is to capture our channel conversations in as much detail as possible along with opening up our research architecture to enable our readers to draw their own conclusions if they require.  
We will try to post these conversations covering sectors, stocks and broader macro environment as frequently as possible. We are open to suggestions, so feel free to reach out via DMs.  
In this "Beyond 280", we present details of our conversation with an entrepreneur based in western India using Paytm (PAYTM IN)'s PoS solutions as a merchant for two of his businesses for over two and half years.

Beyond 280 | Patym (PAYTM IN)  - Conversation with a Merchant Using Paytm PoS

Silver Point

Thomas J. Monaco

Silver Point is a boutique research firm that focuses on the broader financial services sector, with a particular focus on troubled institutions globally. 

Asia Ex Japan

Equity Bottom-Up

<p><strong><em>*Ignoring Credit Deterioration, Results Improve: </em></strong>HDFC Ltd (HDFC.IN) [HDFC] reported FY 2Q22 results of INR 37.3 bn, increasing INR 9.8 bn (35.5%) linked quarter basis. HDFC witnessed positive operating jaws; a massive linked quarter increase in dividends; robust loan growth; a drop in loss provisions; and a lower tax rate. Nothing like pulling on every earnings lever to achieve the result you want; and</p><p><em><strong>*Credit Quality Worsens: </strong></em>Given the INR 3.8 bn in net recovery during FY 2Q22, net new NPLs accelerated to INR 22.1 bn and increased 51.1% on an annualized basis. We also find that HDFC’s reserve still needs shoring up by another INR 200 bn or over a year of PBT.  </p>

*Ignoring Credit Deterioration, Results Improve: HDFC Ltd (HDFC.IN) [HDFC] reported FY 2Q22 results of INR 37.3 bn, increasing INR 9.8 bn (35.5%) linked quarter basis. HDFC witnessed positive operating jaws; a massive linked quarter increase in dividends; robust loan growth; a drop in loss provisions; and a lower tax rate. Nothing like pulling on every earnings lever to achieve the result you want; and*Credit Quality Worsens: Given the INR 3.8 bn in net recovery during FY 2Q22, net new NPLs accelerated to INR 22.1 bn and increased 51.1% on an annualized basis. We also find that HDFC’s reserve still needs shoring up by another INR 200 bn or over a year of PBT.  

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

<div><p><a href="https://www.smartkarma.com/entities/paytm-mobile-solutions-pvt-ltd" target="_blank" data-smartkarma-citation="entities:26149:1" rel="noopener">Paytm (PAYTM IN)</a> plans to raise around US$2.5bn via selling a mix of primary and secondary shares in its India IPO. The company is backed by <a href="https://www.smartkarma.com/entities/ant-group-co-ltd" target="_blank" data-smartkarma-citation="entities:24240:1" rel="noopener">Ant Financial Services Group (6688 HK)</a> (<a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd" target="_blank" data-smartkarma-citation="entities:787:1" rel="noopener">Alibaba Group (BABA US)</a>), <a href="https://www.smartkarma.com/entities/softbank-group-corp" target="_blank" data-smartkarma-citation="entities:315:1" rel="noopener">Softbank Group (9984 JP)</a> and counts <a href="https://www.smartkarma.com/entities/berkshire-hathaway-inc-cl-a" target="_blank" data-smartkarma-citation="entities:1044:1" rel="noopener">Berkshire Hathaway Inc Cl A (BRK/A US)</a> among its investors.</p></div><div><p>Paytm offers payment services, commerce and cloud services, and financial services to 333m consumers and over 21m merchants, as of Mar 21. It offers consumers a wide selection of payment options on the Paytm app. It also offers merchants solutions that allow them to accept payments, acquire and retain consumers, improve their business operations and access financial services.</p></div><div><p>We covered the deal background in our earlier notes:</p></div><div><ul style="list-style-type: disc;">
<li><a href="https://www.smartkarma.com/insights/paytm-one-97-pre-ipo-the-positives-will-be-one-of-india-s-largest-ipos" target="_blank" rel="noopener">Paytm (One 97) Pre-IPO - The Positives - Will Be One of India’s Largest IPOs</a></li>
<li><a href="https://www.smartkarma.com/insights/paytm-one-97-pre-ipo-the-negatives-asking-valuations-a-long-shot" target="_blank" rel="noopener">Paytm (One 97) Pre-IPO - The Negatives - Asking Valuations a Long Shot</a></li>
<li><a href="https://www.smartkarma.com/insights/paytm-one-97-ipo-rhp-updates-better-disclosures-signs-of-turning-around" target="_blank" rel="noopener">Paytm (One 97) IPO - RHP Updates - Better Disclosures, Signs of Turning Around</a></li>
</ul></div><div><p>In this note, we will talk about the valuations.</p></div>

Paytm (PAYTM IN) plans to raise around US$2.5bn via selling a mix of primary and secondary shares in its India IPO. The company is backed by Ant Financial Services Group (6688 HK) (Alibaba Group (BABA US)), Softbank Group (9984 JP) and counts Berkshire Hathaway Inc Cl A (BRK/A US) among its investors.Paytm offers payment services, commerce and cloud services, and financial services to 333m consumers and over 21m merchants, as of Mar 21. It offers consumers a wide selection of payment options on the Paytm app. It also offers merchants solutions that allow them to accept payments, acquire and retain consumers, improve their business operations and access financial services.We covered the deal background in our earlier notes:
Paytm (One 97) Pre-IPO - The Positives - Will Be One of India’s Largest IPOs
Paytm (One 97) Pre-IPO - The Negatives - Asking Valuations a Long Shot
Paytm (One 97) IPO - RHP Updates - Better Disclosures, Signs of Turning Around
In this note, we will talk about the valuations.

Paytm IPO - Still Needs a Whole Lot of Hope to Justify Valuation. Index Might Hold It up Briefly

<div><p><a href="https://www.smartkarma.com/entities/paytm-mobile-solutions-pvt-ltd" target="_blank" data-smartkarma-citation="entities:26149:1" rel="noopener">Paytm (PAYTM IN)</a> plans to raise around US$2.5bn via selling a mix of primary and secondary shares in its India IPO. The company is backed by <a href="https://www.smartkarma.com/entities/ant-group-co-ltd" target="_blank" data-smartkarma-citation="entities:24240:1" rel="noopener">Ant Financial Services Group (6688 HK)</a> (<a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd" target="_blank" data-smartkarma-citation="entities:787:1" rel="noopener">Alibaba Group (BABA US)</a>), <a href="https://www.smartkarma.com/entities/softbank-group-corp" target="_blank" data-smartkarma-citation="entities:315:1" rel="noopener">Softbank Group (9984 JP)</a> and counts <a href="https://www.smartkarma.com/entities/berkshire-hathaway-inc-cl-a" target="_blank" data-smartkarma-citation="entities:1044:1" rel="noopener">Berkshire Hathaway Inc Cl A (BRK/A US)</a> among its investors.</p></div><div><p>Paytm offers payment services, commerce and cloud services, and financial services to 333m consumers and over 21m merchants, as of Mar 21. It offers consumers a wide selection of payment options on the Paytm app. It also offers merchants solutions that allow them to accept payments, acquire and retain consumers, improve their business operations and access financial services.</p></div><div>
<p>We covered the deal background in our earlier notes:</p>
<ul>
<li><a href="https://www.smartkarma.com/insights/paytm-one-97-pre-ipo-the-positives-will-be-one-of-india-s-largest-ipos" target="_blank" rel="noopener">Paytm (One 97) Pre-IPO - The Positives - Will Be One of India’s Largest IPOs</a></li>
<li><a href="https://www.smartkarma.com/insights/paytm-one-97-pre-ipo-the-negatives-asking-valuations-a-long-shot" target="_blank" rel="noopener">Paytm (One 97) Pre-IPO - The Negatives - Asking Valuations a Long Shot</a></li>
</ul>
</div><div><p>In this note, we will talk about the updates since our last note.</p></div>

Paytm (PAYTM IN) plans to raise around US$2.5bn via selling a mix of primary and secondary shares in its India IPO. The company is backed by Ant Financial Services Group (6688 HK) (Alibaba Group (BABA US)), Softbank Group (9984 JP) and counts Berkshire Hathaway Inc Cl A (BRK/A US) among its investors.Paytm offers payment services, commerce and cloud services, and financial services to 333m consumers and over 21m merchants, as of Mar 21. It offers consumers a wide selection of payment options on the Paytm app. It also offers merchants solutions that allow them to accept payments, acquire and retain consumers, improve their business operations and access financial services.
We covered the deal background in our earlier notes:

Paytm (One 97) Pre-IPO - The Positives - Will Be One of India’s Largest IPOs
Paytm (One 97) Pre-IPO - The Negatives - Asking Valuations a Long Shot

In this note, we will talk about the updates since our last note.

Paytm (One 97) IPO - RHP Updates - Better Disclosures, Signs of Turning Around

Specialist in Indian Banking and Economic Research

Hemindra Hazari

<p>Even though <a href="https://www.smartkarma.com/entities/axis-bank-ltd" target="_blank" data-smartkarma-citation="entities:768:1" rel="noopener">Axis Bank Ltd (AXSB IN)</a> reported an impressive growth in net profit, higher than that of its peers, the stock market penalised the bank, as the growth of its business, top line and profit before provisions was lower than that of its peers. The stock market traditionally favours both top and bottom line growth, and in Axis Bank’s case the market believed that the poor business growth is a symptom of a deeper problem in the bank’s business model.</p><p><strong>Some analysts have highlighted Axis Bank’s poor business indicators in the 2QFY2022 as compared with those of its peers, and their reading-between-the-lines is that it may be an undisclosed or even undiagnosed problem. It is also possible that Axis Bank 2QFY2022 was an off quarter, where the management took its eye off the ball, and that performance may rebound and match that of its peers in 2HFY2022. However, another, more ominous, explanation could be that staff morale may be the cause of the poor performance.</strong></p><p>This analyst was the first to <a href="https://hemindrahazari.com/2021/05/26/why-are-axis-banks-directors-mum-about-the-extraordinary-staff-churn/" target="_blank" rel="noopener">highlight</a> Axis Bank’s high and worsening attrition from FY2018 to FY2020, when it peaked at 36.8% for the overall bank and an alarming 69.2% for the sales category (this category has the maximum number of staff which sources new business). <strong>In FY2021, Axis Bank reported a trend reversal, a significant improvement in attrition to 23.8% (sales attrition at 49.7%); the improvement was also seen in other private sector banks. It is possible that the work-from-home regime in FY2021 resulted in less stressful daily physical meetings, and relaxation in achieving sales targets, on account of the lock-down. With 2QFY2022 gradually returning to normal, the pressures on the staff may have resumed to a point where attrition may have increased and morale plummeted, impacting the top line performance of Axis Bank.</strong></p><p><strong>Attrition can be a lead indicator for future performance</strong>, and analysts have been concerned with the steady senior level <a href="https://economictimes.indiatimes.com/markets/stocks/news/two-senior-executives-quit-axis-bank-for-piramal-nbfc/articleshow/75546095.cms" target="_blank" rel="noopener">exits</a> since Amitabh Chaudhry took charge as Chief Executive Officer on January 1, 2019. The latest <a href="https://www.bseindia.com/xml-data/corpfiling/AttachHis/299d20f1-8fa4-45d5-90f5-e4aed0484c6e.pdf" target="_blank" rel="noopener">resignation</a>  was of Rajesh Dahiya, executive director and in-charge of human resources since June 2010. <strong>But what was largely unreported was the plight of the bulk of the Axis Bank staff, which was ignored by analysts. This despite the fact that the bank had comprehensive disclosures on the issue which painted a sorry picture of human resource management since FY2018. Staff discontent may take some time to filter down to impacting overall performance, and we need more quarters to monitor performance to validate this hypothesis.</strong></p><p>The Axis Bank board of directors need to urgently enquire into the reasons for the poor business and revenue performance in 2QFY2022 and the stock market penalising the share price may provide the appropriate push to the board to investigate the matter and come out with remedial measures.</p>

Even though Axis Bank Ltd (AXSB IN) reported an impressive growth in net profit, higher than that of its peers, the stock market penalised the bank, as the growth of its business, top line and profit before provisions was lower than that of its peers. The stock market traditionally favours both top and bottom line growth, and in Axis Bank’s case the market believed that the poor business growth is a symptom of a deeper problem in the bank’s business model.Some analysts have highlighted Axis Bank’s poor business indicators in the 2QFY2022 as compared with those of its peers, and their reading-between-the-lines is that it may be an undisclosed or even undiagnosed problem. It is also possible that Axis Bank 2QFY2022 was an off quarter, where the management took its eye off the ball, and that performance may rebound and match that of its peers in 2HFY2022. However, another, more ominous, explanation could be that staff morale may be the cause of the poor performance.This analyst was the first to highlight Axis Bank’s high and worsening attrition from FY2018 to FY2020, when it peaked at 36.8% for the overall bank and an alarming 69.2% for the sales category (this category has the maximum number of staff which sources new business). In FY2021, Axis Bank reported a trend reversal, a significant improvement in attrition to 23.8% (sales attrition at 49.7%); the improvement was also seen in other private sector banks. It is possible that the work-from-home regime in FY2021 resulted in less stressful daily physical meetings, and relaxation in achieving sales targets, on account of the lock-down. With 2QFY2022 gradually returning to normal, the pressures on the staff may have resumed to a point where attrition may have increased and morale plummeted, impacting the top line performance of Axis Bank.Attrition can be a lead indicator for future performance, and analysts have been concerned with the steady senior level exits since Amitabh Chaudhry took charge as Chief Executive Officer on January 1, 2019. The latest resignation  was of Rajesh Dahiya, executive director and in-charge of human resources since June 2010. But what was largely unreported was the plight of the bulk of the Axis Bank staff, which was ignored by analysts. This despite the fact that the bank had comprehensive disclosures on the issue which painted a sorry picture of human resource management since FY2018. Staff discontent may take some time to filter down to impacting overall performance, and we need more quarters to monitor performance to validate this hypothesis.The Axis Bank board of directors need to urgently enquire into the reasons for the poor business and revenue performance in 2QFY2022 and the stock market penalising the share price may provide the appropriate push to the board to investigate the matter and come out with remedial measures.

Axis Bank: Toxic Workplaces Don’t Bring In More Business

India

HDFC Bank Ltd. offers a wide range of services to the global corporate sector. The Bank provides corporate banking and custodial services and is active in the treasury and capital markets. HDFC also markets project advisory services and capital market products such as Global Deposit Receipts, Euro currency loans, and Euro currency bonds.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

HDFC Bank (HDFCB IN)

Beyond 280 | Patym (PAYTM IN) - Conversation with a Merchant Using Paytm PoS

In this"Beyond 280", we present details of our conversation with an entrepreneur based in western India using Paytm's PoS solutions as a merchant...

Pranav Bhavsar

HDFC Ltd. – In the Land of The Blind

HDFC: HDFC reported a QOQ FY 2Q22 results increase of 35.5%, as management pulled on every earnings lever. Net new NPLs increased 51.1% annualized,...

Thomas J. Monaco

Paytm IPO - Still Needs a Whole Lot of Hope to Justify Valuation. Index Might Hold It up Briefly

Paytm (PAYTM IN) plans to raise around US$2.5bn in its India IPO. The company is backed by Ant Fin (Alibaba Group (BABA US)), Softbank Group (9984...

Sumeet Singh

Paytm (One 97) IPO - RHP Updates - Better Disclosures, Signs of Turning Around

Paytm (PAYTM IN) plans to raise around US$2.5bn in its India IPO. The company is backed by Ant Fin, Softbank Group (9984 JP) and counts Berkshire...

Sumeet Singh

Axis Bank: Toxic Workplaces Don’t Bring In More Business

2QFY2022 may have been an aberration, but if staff have become unresponsive to the management’s directives to push business growth, Axis has a ...

Hemindra Hazari

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)