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 Bottom-Up

<p>This channel insight focuses on <a href="https://www.smartkarma.com/entities/zomato-media-pvt" target="_blank" data-smartkarma-citation="entities:28820:1" rel="noopener">Zomato (ZOM IN)</a>, <a href="https://www.smartkarma.com/entities/au-small-finance-bank-limited" target="_blank" data-smartkarma-citation="entities:24196:1" rel="noopener">AU Small Finance Bank Limited (AUBANK IN),</a><a href="https://www.smartkarma.com/entities/hitachi-home-life-solutions-india-ltd" target="_blank" data-smartkarma-citation="entities:6172:1" rel="noopener">Hitachi Home &amp; Life Solutions India Ltd (JCHAC IN)</a>, <a href="https://www.smartkarma.com/entities/nilkamal-ltd" target="_blank" data-smartkarma-citation="entities:5323:1" rel="noopener">Nilkamal Ltd (NILK IN)</a> and <a href="https://www.smartkarma.com/entities/makemytrip-ltd" target="_blank" data-smartkarma-citation="entities:23580:1" rel="noopener">Makemytrip Ltd (MMYT US)</a>. States, where our channels were based, include- West Bengal, Rajasthan, Gujarat, Maharashtra, Madhya Pradesh, Bihar.  </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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This channel insight focuses on Zomato (ZOM IN), AU Small Finance Bank Limited (AUBANK IN),Hitachi Home &amp; Life Solutions India Ltd (JCHAC IN), Nilkamal Ltd (NILK IN) and Makemytrip Ltd (MMYT US). States, where our channels were based, include- West Bengal, Rajasthan, Gujarat, Maharashtra, Madhya Pradesh, Bihar.  

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 | Zomato, AU Bank, Johnson Hitachi, Nilkamal, Makemytrip

External broker reports(aggregated public sources), BOB Capital Markets Ltd

BOB Capital Markets Ltd.

External broker reports(aggregated public sources)

InterGlobe Aviation Ltd / Equity Bottom-Up

<p>IndiGo's Q4FY21 RASK came in at Rs 3.3, EBITDAR at Rs 7.3bn was hit by rising fuel costs and the company suffered a Rs 11.6bn net loss</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>

IndiGo's Q4FY21 RASK came in at Rs 3.3, EBITDAR at Rs 7.3bn was hit by rising fuel costs and the company suffered a Rs 11.6bn net lossContent 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.

InterGlobe Aviation (ADD): Strong balance sheet, leadership premium  upgrade to ADD

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

Motilal Oswal

<p>INDIGO reported an in line ASK (19.2b), PLF (70%), RPK (13.5b), and yield (INR3.7), while miss to our estimates was led by higher fuel cost. Air passenger demand touched a record high in Feb'21 after the lifting of COVID-related restrictions, although the second wave impacted demand in May'21. Cash burn rose to INR190m in 4Q (from INR150m in 3QFY21). Cash burn is expected to be higher in 1QFY22 as daily passenger demand falls to ~80,000 passengers from the highs of ~300,000 at the end of Feb'21.</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>

INDIGO reported an in line ASK (19.2b), PLF (70%), RPK (13.5b), and yield (INR3.7), while miss to our estimates was led by higher fuel cost. Air passenger demand touched a record high in Feb'21 after the lifting of COVID-related restrictions, although the second wave impacted demand in May'21. Cash burn rose to INR190m in 4Q (from INR150m in 3QFY21). Cash burn is expected to be higher in 1QFY22 as daily passenger demand falls to ~80,000 passengers from the highs of ~300,000 at the end of Feb'21.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.

Second COVID wave delays recovery by a year

External broker reports(aggregated public sources), HDFC Securities

HDFC Securities

<p>We downgrade the stock to REDUCE and lower our EBITDAR estimates by ~10% over FY22/23E. We set a revised target price of INR 1,580, based on 7X EV/EBITDAR FY23E. Indigos 4QFY21 results were below estimates as the airline reported a loss of INR 11.6bn. The pick-up in aviation traffic is now delayed to 2HFY22 at a time when crude prices are firming up.</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>

We downgrade the stock to REDUCE and lower our EBITDAR estimates by ~10% over FY22/23E. We set a revised target price of INR 1,580, based on 7X EV/EBITDAR FY23E. Indigos 4QFY21 results were below estimates as the airline reported a loss of INR 11.6bn. The pick-up in aviation traffic is now delayed to 2HFY22 at a time when crude prices are firming up.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.

InterGlobe Aviation (4QFY21): Recovery priced in. Downgrade to REDUCE

Forensic Analyst, Trudence Capital Advisors

Nitin Mangal

Forensic Analyst

Equity Capital Markets

<p><a href="https://www.smartkarma.com/entities/go-air-limited" target="_blank" data-smartkarma-citation="entities:33416:1" rel="noopener">Go Air Limited (GO IN)</a>  is set to launch an IPO soon, becoming the 3rd active airlines company to get listed on the bourses after <a href="https://www.smartkarma.com/entities/interglobe-aviation-ltd" target="_blank" data-smartkarma-citation="entities:24877:1" rel="noopener">InterGlobe Aviation Ltd (INDIGO IN)</a> and <a href="https://www.smartkarma.com/entities/spicejet-ltd" target="_blank" data-smartkarma-citation="entities:5266:1" rel="noopener">Spicejet Ltd (SJET IN)</a>. The company, promoted by the Wadia Group was launched in 2005 and currently controls 10.8% of the market share.</p>
<p>Operated as a ULCC (ultra low cost airlines), Go Air has been one of the faster growing airlines domestically in the last two years, clocking an available seat kilometer (ASK) and revenue CAGR growth of 30.2% and 25.2% from F18-F20. Moreover, Go Air has also been one of the better cost-efficient airlines in the sector, factored by lesser maintenance and better fuel efficiency.</p>
<p>However, given these metrics, there are numerous setbacks identified in the DRHP, primarily pertaining to accounting changes and balance sheet health, which we try to uncover in this insight.</p>

Go Air Limited (GO IN)  is set to launch an IPO soon, becoming the 3rd active airlines company to get listed on the bourses after InterGlobe Aviation Ltd (INDIGO IN) and Spicejet Ltd (SJET IN). The company, promoted by the Wadia Group was launched in 2005 and currently controls 10.8% of the market share.
Operated as a ULCC (ultra low cost airlines), Go Air has been one of the faster growing airlines domestically in the last two years, clocking an available seat kilometer (ASK) and revenue CAGR growth of 30.2% and 25.2% from F18-F20. Moreover, Go Air has also been one of the better cost-efficient airlines in the sector, factored by lesser maintenance and better fuel efficiency.
However, given these metrics, there are numerous setbacks identified in the DRHP, primarily pertaining to accounting changes and balance sheet health, which we try to uncover in this insight.

India

InterGlobe Aviation Limited provides passenger airlines services. The Company offers ground management, air transportation, terminal maintenance, and other services. InterGlobe Aviation conducts its business globally.

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InterGlobe Aviation Ltd (INDIGO IN)

India Channel Insight | Zomato, AU Bank, Johnson Hitachi, Nilkamal, Makemytrip

This channel insight focuses on ZOM IN, AUBANK IN, JCHAC IN, NILK IN and MMYT US. States, where our channels were based, include- West Bengal,...

Pranav Bhavsar

InterGlobe Aviation (ADD): Strong balance sheet, leadership premium upgrade to ADD

IndiGo's Q4FY21 RASK came in at Rs 3.3, EBITDAR at Rs 7.3bn was hit by rising fuel costs and the company suffered a Rs 11.6bn net loss

BOB Capital Markets Ltd.

Second COVID wave delays recovery by a year

INDIGO reported an in line ASK (19.2b), PLF (70%), RPK (13.5b), and yield (INR3.7), while miss to our estimates was led by higher fuel cost. Air...

Motilal Oswal

InterGlobe Aviation (4QFY21): Recovery priced in. Downgrade to REDUCE

We downgrade the stock to REDUCE and lower our EBITDAR estimates by ~10% over FY22/23E. We set a revised target price of INR 1,580, based on 7X EV...

HDFC Securities

Go Air IPO- In Search Of Smooth Landing

Given the strong recent growth, there are numerous setbacks identified in the DRHP, primarily pertaining to accounting changes and balance sheet...

Nitin Mangal

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