Senior Credit Analyst, Lucror Analytics

Leonard Law, CFA

Senior Credit Analyst

High Yield Experts

Lucror Analytics

Lucror Analytics is a leading credit and ESG research specialist and a provider of technology solutions for differentiated fixed income strategies. Our roots are in bottom-up fundamental credit analysis with a specialization in high yield corporate credits from Europe, Asia and Latin America. We are one of few research specialists integrating ESG considerations with fundamental credit research through a dedicated ESG platform. Our ESG assessment covers five key criteria: Disclosure, E,S, & G Pillars, Controversies, ESG Impact on Credit and ESG Momentum.

Recognizing the importance and value-add of Factor Investing in fixed income, Lucror developed the Smart Quant Navigator (SQN), an intuitive platform that helps clients devise and implement factor-based strategies ranging from pure quant to active fundamental, with integrated ESG.

Our company has been at the forefront of developments in the fixed income markets, identifying opportunities and consistently delivering new products and value-adding solutions to clients. Lucror has close relationships with the largest and most reputable asset managers, family offices, hedge funds, investment and wealth managers globally.

<ul>
<li>Lucror Analytics' ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).</li>
<li>We assess Novelis' ESG as "Adequate", in line with its Social and Governance scores. The company has a "Strong" score for the Environmental pillar. Controversies are "Immaterial" and Disclosure is "Adequate".</li>
<li>Novelis is the world’s largest producer of flat-rolled aluminium products and the largest recycler of aluminium globally.</li>
</ul>


Lucror Analytics' ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
We assess Novelis' ESG as "Adequate", in line with its Social and Governance scores. The company has a "Strong" score for the Environmental pillar. Controversies are "Immaterial" and Disclosure is "Adequate".
Novelis is the world’s largest producer of flat-rolled aluminium products and the largest recycler of aluminium globally.


External broker reports(aggregated public sources), Axis Direct

Axis Direct

External broker reports(aggregated public sources)

Axis Direct is the flagship brand under Axis Securities Limited, a subsidiary of Axis Bank in India. 

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.

Thematic (Sector/Industry)

<div><div><div><div><ul><li>Steel Q1FY24 Preview: For steel companies under our coverage (Tata Steel and SAIL), we expect margins to contract QoQ due to lower sales volume and elevated input coking coal consumption costs, offsetting higher realisations.</li><li>On a YoY basis, too, margins are expected to contract despite higher volumes YoY (on a low base) as HRC prices are now down by 15% YoY from the near peak of the last year.</li><li>We expect revenues to decline QoQ on account of lower sales which will offset the slightly higher realisations on a QoQ basis. </li></ul></div></div></div></div><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>

Steel Q1FY24 Preview: For steel companies under our coverage (Tata Steel and SAIL), we expect margins to contract QoQ due to lower sales volume and elevated input coking coal consumption costs, offsetting higher realisations.On a YoY basis, too, margins are expected to contract despite higher volumes YoY (on a low base) as HRC prices are now down by 15% YoY from the near peak of the last year.We expect revenues to decline QoQ on account of lower sales which will offset the slightly higher realisations on a QoQ basis. 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.

Equity Bottom-Up

<div><ul><li>Consolidated Segmental EBITDA (down 19%YoY) recovered QoQ by 21%, a 4% beat vs. our estimate driven by better-than-expected EBITDA at Indian Aluminium and Copper operations.</li><li>Aluminium EBITDA grew by 32% QoQ on lower coal costs.</li><li>Copper EBITDA stood robust, up 10% QoQ, led by higher shipments (up 11% YoY) and better TC/RCs.</li></ul></div><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>

Consolidated Segmental EBITDA (down 19%YoY) recovered QoQ by 21%, a 4% beat vs. our estimate driven by better-than-expected EBITDA at Indian Aluminium and Copper operations.Aluminium EBITDA grew by 32% QoQ on lower coal costs.Copper EBITDA stood robust, up 10% QoQ, led by higher shipments (up 11% YoY) and better TC/RCs.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.

Hindalco Industries Ltd - Indian Operations Recover; Macro Uncertainties Persist

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>Media reports indicate that the <a href="https://www.smartkarma.com/entities/hdfc-bank-ltd-4b6b7a92-9087-468d-9dbe-ab169e77f014" target="_blank" data-smartkarma-citation="entities:558:1" rel="noopener">HDFC Bank (HDFCB IN)</a> merger with <a href="https://www.smartkarma.com/entities/housing-development-finance" target="_blank" data-smartkarma-citation="entities:252:1" rel="noopener">HDFC Limited (HDFC IN)</a> is expected to complete in 4-5 weeks.</li>
<li>There will be inclusions to the <a href="https://www.smartkarma.com/entities/nifty-index" target="_blank" data-smartkarma-citation="entities:23617:1" rel="noopener">NIFTY Index</a>, <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> and <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 </a>and capping changes to the <a href="https://www.smartkarma.com/entities/nifty-bank-index" target="_blank" data-smartkarma-citation="entities:26811:1" rel="noopener">Nifty Bank Index</a> apart from changes to global indices.</li>
<li>While the impact on the merging entities is not big, there will be fairly large flows on some stocks that are index inclusions or affected by capping changes.</li>
</ul>


Media reports indicate that the HDFC Bank (HDFCB IN) merger with HDFC Limited (HDFC IN) is expected to complete in 4-5 weeks.
There will be inclusions to the NIFTY Index, Nifty Next 50 Index and S&amp;P BSE SENSEX Index and capping changes to the Nifty Bank Index apart from changes to global indices.
While the impact on the merging entities is not big, there will be fairly large flows on some stocks that are index inclusions or affected by capping changes.


HDFC/​​​​​HDFC Bank Mega Merger Expected to Complete in a Few Weeks: Index Implications

<ul><li>Novelis’s numbers stood largely on expected lines.</li><li>EBITDA/t has recovered from the trough of $376/t in Q3FY23 to $431/t in Q4FY23 (5% beat) in line with the earlier management commentary of EBITDA/t touching +$400/t in Q4FY23.</li><li>Revenue (small beat by 2%) grew by 5% QoQ (below 9% YoY on the strong base of the last year), led by a recovery in shipments to 936kt (up 3% QoQ).</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>

Novelis’s numbers stood largely on expected lines.EBITDA/t has recovered from the trough of $376/t in Q3FY23 to $431/t in Q4FY23 (5% beat) in line with the earlier management commentary of EBITDA/t touching +$400/t in Q4FY23.Revenue (small beat by 2%) grew by 5% QoQ (below 9% YoY on the strong base of the last year), led by a recovery in shipments to 936kt (up 3% QoQ).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.

Hindalco Industries Ltd - Margin Recovery at Novelis on Expected Lines

India

Hindalco Industries Limited is an integrated aluminum manufacturer. The Company mines bauxite and refines it into alumina. The Company's other operations include the smelting of alumina into aluminum, the manufacture of semi-fabricated rolled and extruded products. The Company's products include aluminum ingots, steel rods and rolled flat steel products.

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Hindalco Industries (HNDL IN)

Novelis - ESG Report - Lucror Analytics

Lucror Analytics' ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable). We assess Novelis' ESG as...

Lucror Analytics

Metals - Q1FY24 Earnings Preview

On a YoY basis, too, margins are expected to contract despite higher volumes YoY (on a low base) as HRC prices are now down by 15% YoY from the...

Axis Direct

Hindalco Industries Ltd - Indian Operations Recover; Macro Uncertainties Persist

Consolidated Segmental EBITDA (down 19%YoY) recovered QoQ by 21%, a 4% beat vs. our estimate driven by better-than-expected EBITDA at Indian...

Axis Direct

HDFC/HDFC Bank Mega Merger Expected to Complete in a Few Weeks: Index Implications

Media reports indicate that the HDFC Bank merger with HDFC Ltd is expected to complete in 4-5 weeks. There will be ad hoc inclusions to the...

Brian Freitas

Hindalco Industries Ltd - Margin Recovery at Novelis on Expected Lines

EBITDA/t has recovered from the trough of $376/t in Q3FY23 to $431/t in Q4FY23 (5% beat) in line with the earlier management commentary of EBITDA/t...

Axis Direct

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Novelis - ESG Report - Lucror Analytics

Lucror Analytics' ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable). We assess Novelis' ESG as...

Lucror Analytics

Metals - Q1FY24 Earnings Preview

On a YoY basis, too, margins are expected to contract despite higher volumes YoY (on a low base) as HRC prices are now down by 15% YoY from the...

Axis Direct

Hindalco Industries Ltd - Indian Operations Recover; Macro Uncertainties Persist

Consolidated Segmental EBITDA (down 19%YoY) recovered QoQ by 21%, a 4% beat vs. our estimate driven by better-than-expected EBITDA at Indian...

Axis Direct

HDFC/​​​​​HDFC Bank Mega Merger Expected to Complete in a Few Weeks: Index Implications

Media reports indicate that the HDFC Bank merger with HDFC Ltd is expected to complete in 4-5 weeks. There will be ad hoc inclusions to the...

Brian Freitas

Hindalco Industries Ltd - Margin Recovery at Novelis on Expected Lines

EBITDA/t has recovered from the trough of $376/t in Q3FY23 to $431/t in Q4FY23 (5% beat) in line with the earlier management commentary of EBITDA/t...

Axis Direct

HDFC/HDFC Bank Mega Merger Expected to Complete in a Few Weeks: Index Implications