Alpha-Centric ESG Research

Kyle Rudden

<ul>
<li>In a recent Insight, <a href="https://www.smartkarma.com/insights/regulating-esg-ratings-in-india-outline-of-sebi-s-proposed-regulatory-framework" target="_blank" data-smartkarma-citation="insights:64468" rel="noopener">Regulating ESG Ratings in India: Outline of SEBI's Proposed Regulatory Framework</a>, I summarised SEBI's proposed regulatory framework for ESG ratings in India. </li>
<li>This Insight goes a bit further, looking at implications of regulation on stocks of ESG ratings providers (ERPs), especially Credit Rating Agencies (CRAs) and Research Analysts (RAs).</li>
<li>Downside risk are minimal for ERPs, but a few scenarios and stipulations related to conflicts of interest and compensation (how ERPs are paid, and by whom) could have an impact.</li>
</ul>


In a recent Insight, Regulating ESG Ratings in India: Outline of SEBI's Proposed Regulatory Framework, I summarised SEBI's proposed regulatory framework for ESG ratings in India. 
This Insight goes a bit further, looking at implications of regulation on stocks of ESG ratings providers (ERPs), especially Credit Rating Agencies (CRAs) and Research Analysts (RAs).
Downside risk are minimal for ERPs, but a few scenarios and stipulations related to conflicts of interest and compensation (how ERPs are paid, and by whom) could have an impact.


Credit Rating Agency Stocks Most Impacted by SEBI Regulation of ESG Ratings in India

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.

Equity Bottom-Up

<ul><li>ICICI Bank (ICICIBC) reported yet another strong performance in Q3FY22 with a 25% YoY earnings growth</li><li>The bank's NII grew 25% YoY with a healthy loan book growth of 16% YoY and stable NIMs (3.97%)</li><li>We maintain a BUY rating on the stock with a revised target price of Rs 990/share (SOTP basis core book at 2.8x FY24E and Rs 182 Subs. Value), implying an upside of 23% from the CMP.</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>

ICICI Bank (ICICIBC) reported yet another strong performance in Q3FY22 with a 25% YoY earnings growthThe bank's NII grew 25% YoY with a healthy loan book growth of 16% YoY and stable NIMs (3.97%)We maintain a BUY rating on the stock with a revised target price of Rs 990/share (SOTP basis core book at 2.8x FY24E and Rs 182 Subs. Value), implying an upside of 23% from the CMP.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.

ICICI Bank: Outperformance Continues; Maintain BUY

External broker reports(aggregated public sources), HDFC Securities

HDFC Securities

HDFC securities is the best online trading platform for stocks, IPOs, mutual fund 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.

<p>Kajaria Ceramics: We reiterate our BUY rating on Kajaria Ceramics (KJC), with an unchanged target price of INR1,450/sh (21x its Dec-23E consolidated EBITDA). KJC reported robust growth across tiles, bathware, and ply segments, riding on both healthy demand and market share gains, which drove its revenue by 27% YoY. However, elevated gas prices muted EBITDA/APAT growth to 1/3% YoY. KJC is confident to continue to gain market share, as it is eying a 15%+ tiles volume growth CAGR for the next three years.</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>

Kajaria Ceramics: We reiterate our BUY rating on Kajaria Ceramics (KJC), with an unchanged target price of INR1,450/sh (21x its Dec-23E consolidated EBITDA). KJC reported robust growth across tiles, bathware, and ply segments, riding on both healthy demand and market share gains, which drove its revenue by 27% YoY. However, elevated gas prices muted EBITDA/APAT growth to 1/3% YoY. KJC is confident to continue to gain market share, as it is eying a 15%+ tiles volume growth CAGR for the next three years.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.

HSIE Results Daily: Reliance Industries, ICICI Bank, Kajaria Ceramics

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

<ul>
<li><em><strong>ICICI reported FY 3Q22 earnings of INR 61.9 bn, increasing INR 6.8 bn (12.4%) linked quarter, driven by net interest and fee improvement and a provision cut;  </strong></em></li>
<li><em><strong>Net new NPLs continued to increase 11.4% on an annualized basis at FY 3Q22 versus INR 44.1 bn 43.7% at FY 3Q21; and    </strong></em></li>
<li><em><strong>We find that ICICI is short on reserves to the tune of INR 116 bn or just over a half year of ICICI’s core operating result. </strong></em></li>
</ul>


ICICI reported FY 3Q22 earnings of INR 61.9 bn, increasing INR 6.8 bn (12.4%) linked quarter, driven by net interest and fee improvement and a provision cut;  
Net new NPLs continued to increase 11.4% on an annualized basis at FY 3Q22 versus INR 44.1 bn 43.7% at FY 3Q21; and    
We find that ICICI is short on reserves to the tune of INR 116 bn or just over a half year of ICICI’s core operating result. 


External broker reports(aggregated public sources), Edelweiss Broking Limited

Edelweiss

Edelweiss Broking Limited

Edelweiss Broking Limited is an Indian Financial services company based in Mumbai, India. The company is a subsidiary of Edelweiss Group. 

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.

<p>Yet another quarter of superior credit growth</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>

Yet another quarter of superior credit growthContent 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.

India

ICICI Bank Limited operates as a bank. The Bank offers saving accounts, loans, debit, credit cards, insurance, investments, mortgages, and online banking services. ICICI Bank serves customers worldwide.

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ICICI Bank Ltd (ICICIBC IN)

Credit Rating Agency Stocks Most Impacted by SEBI Regulation of ESG Ratings in India

The potential impacts of SEBI's proposed framework for regulating ESG ratings are unclear at this stage, but a few things (related to conflicts of...

Kyle Rudden

ICICI Bank: Outperformance Continues; Maintain BUY

We maintain a BUY rating on the stock with a revised target price of Rs 990/share (SOTP basis core book at 2.8x FY24E and Rs 182 Subs. Value),...

Axis Direct

HSIE Results Daily: Reliance Industries, ICICI Bank, Kajaria Ceramics

Kajaria Ceramics: We reiterate our BUY rating on Kajaria Ceramics (KJC), with an unchanged target price of INR1,450/sh (21x its Dec-23E...

HDFC Securities

ICICI Bank – Continued Improvement

ICICI BANK: ICICI FY 3Q22 earnings increased 12.4% QOQ driven by net interest income and fee improvement and a provision cut. ICICI is still short...

Thomas J. Monaco

ICICI Bank Ltd | Q3FY22 Result Update

Yet another quarter of superior credit growth

Edelweiss

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