Value investor- India mid & small caps

Bhaskar Chakraborty

Thematic (Sector/Industry)

<ul>
<li>Bank lending to NBFCs has been flat since Oct-18 after rising by ~ Rs 1 tn in the previous 5-month period. Debt mutual fund holdings in NBFCs have declined 20% over Sep-18 to Feb-19. CP issuances by NBFCs have also fallen to a fraction of the size before IL&amp;FS defaulted.</li>
<li>This is percolating through the economy slowing down the flow of overall credit.</li>
<li>2-W channel inventories are nearly twice the normal level for some players</li>
<li>M&amp;HCV production has been cut 20-25% YoY in 4QFY19</li>
<li>Tractor volume growth is likely to be in single digits in FY20</li>
<li>Air conditioner and refrigerators are seeing steep discounting owing to large inventory build-up on delayed summer</li>
<li>FMCG players indicate both rural and urban demand weakness including in the modern retail segment</li>
</ul>


Bank lending to NBFCs has been flat since Oct-18 after rising by ~ Rs 1 tn in the previous 5-month period. Debt mutual fund holdings in NBFCs have declined 20% over Sep-18 to Feb-19. CP issuances by NBFCs have also fallen to a fraction of the size before IL&amp;FS defaulted.
This is percolating through the economy slowing down the flow of overall credit.
2-W channel inventories are nearly twice the normal level for some players
M&amp;HCV production has been cut 20-25% YoY in 4QFY19
Tractor volume growth is likely to be in single digits in FY20
Air conditioner and refrigerators are seeing steep discounting owing to large inventory build-up on delayed summer
FMCG players indicate both rural and urban demand weakness including in the modern retail segment


India Consumption: More Signs of a Widening Slowdown

Equity Analyst - Fundamental & Thematic, Sree Capital

Sreemant Dudhoria

Equity Analyst - Fundamental & Thematic

Fundamental Research on Listed Indian Companies

Sree Capital

Sree Capital is a platform to share fundamental research on listed Indian companies. We do this research for our own investment

Equity Bottom-Up

<ul>
<li>We compile our selection of companies across Japan, China and India based on bottom-up triggers in each company.</li>
<li>In Japan its <a href="https://www.smartkarma.com/entities/rohm-co-ltd" target="_blank" data-smartkarma-citation="entities:2953:1" rel="noopener">ROHM Co Ltd (6963 JP)</a>, <a href="https://www.smartkarma.com/entities/suzuki-motor-corp" target="_blank" data-smartkarma-citation="entities:732:1" rel="noopener">Suzuki Motor (7269 JP)</a>, <a href="https://www.smartkarma.com/entities/mazda-motor-corp" target="_blank" data-smartkarma-citation="entities:20528:1" rel="noopener">Mazda Motor (7261 JP)</a>&amp; <a href="https://www.smartkarma.com/entities/aisin-corp" target="_blank" data-smartkarma-citation="entities:11809:1" rel="noopener">Aisin (7259 JP)</a>.</li>
<li>In Indian auto its <a href="https://www.smartkarma.com/entities/mahindra-mahindra-ltd" target="_blank" data-smartkarma-citation="entities:16441:1" rel="noopener">Mahindra &amp; Mahindra (MM IN)</a> ,<a href="https://www.smartkarma.com/entities/maruti-suzuki-india-ltd" target="_blank" data-smartkarma-citation="entities:733:1" rel="noopener">Maruti Suzuki India (MSIL IN)</a> &amp;<a href="https://www.smartkarma.com/entities/ashok-leyland-ltd" target="_blank" data-smartkarma-citation="entities:20104:1" rel="noopener">Ashok Leyland (AL IN)</a> .In China it is <a href="https://www.smartkarma.com/entities/yadea-group-holdings-ltd" target="_blank" data-smartkarma-citation="entities:22706:1" rel="noopener">Yadea (1585 HK)</a> and <a href="https://www.smartkarma.com/entities/midea-group-co-ltd-class-h" target="_blank" data-smartkarma-citation="entities:43993:1" rel="noopener">Midea Group (300 HK)</a>.</li>
</ul>


We compile our selection of companies across Japan, China and India based on bottom-up triggers in each company.
In Japan its ROHM Co Ltd (6963 JP), Suzuki Motor (7269 JP), Mazda Motor (7261 JP)&amp; Aisin (7259 JP).
In Indian auto its Mahindra &amp; Mahindra (MM IN) ,Maruti Suzuki India (MSIL IN) &amp;Ashok Leyland (AL IN) .In China it is Yadea (1585 HK) and Midea Group (300 HK).


Shortlist Of High Conviction Ideas Across Japan, China, India - May 2026

Founder and Strategist, Entext Economics & Strategy

Sean Maher

Founder and Strategist

Entext Economics & Strategy

Entext provides institutional investors with distinctive, actionable asset allocation and thematic research, which typically challenges the market consensus. Our clients range from credit, equity and multi-asset hedge and pension funds to family offices and sovereign funds. 
 
We focus on identifying key inflection points in macro data and relative asset performance amid the 'groupthink'  and confirmation bias that characterizes most investment bank analysis.

Macro Driven Investment Insight

The Indian underweight stance has paid off this quarter - the consensus consumption boom thesis rarely asks how it can be funded, given the country’s structurally weak terms of trade, chronic twin deficits and  persistent INR depreciation pressure. One key lesson of recent years for EM investors from Brazil to Turkey is that you can’t have a sustained consumer boom without the means to pay for it, via hard currency trade earnings and/or capital inflows driving FDI and domestic credit growth.  If China’s core macro problem is a structural demand deficit driven by its 40% plus savings rate, India’s is a structural savings deficit that caps credit growth and investment without external funding, which then leaves it vulnerable to periodic ‘margin calls’ via the INR and bond yields. While the recent (but fast reversing) oil slump has delayed a reckoning, that vulnerability will intensify now that fiscal expansion is underway globally.

The Indian underweight stance has paid off this quarter - the consensus consumption boom thesis rarely asks how it can be funded, given the country’s structurally weak terms of trade, chronic twin deficits and  persistent INR depreciation pressure. One key lesson of recent years for EM investors from Brazil to Turkey is that you can’t have a sustained consumer boom without the means to pay for it, via hard currency trade earnings and/or capital inflows driving FDI and domestic credit growth.  If China’s core macro problem is a structural demand deficit driven by its 40% plus savings rate, India’s is a structural savings deficit that caps credit growth and investment without external funding, which then leaves it vulnerable to periodic ‘margin calls’ via the INR and bond yields. While the recent (but fast reversing) oil slump has delayed a reckoning, that vulnerability will intensify now that fiscal expansion is underway globally. 

Can India Fund A Sustained Consumption Boom?

Forensic Analyst, Trudence Capital Advisors

Nitin Mangal

Forensic Analyst

Farm loan waivers have been a key driver in the pre-election polls as well as 2019 Lok Sabha polls. Apart from monsoons, the overall agriculture sector is affected by any incentive from the government such as farm loan waivers, infrastructure creation, or other initiatives taken for increasing income of small and marginal farmers.
Farm loan waivers not only impact the banks and financial institutions but also have a major influence on the revenue of various agricultural related industries. One such impact can be seen in the sales of tractors. It has been historically seen that whenever there is an announcement of incentivizing the income of farmers like the farm loan waiver, there has been an uptick in the demand of tractors.

Farm loan waivers have been a key driver in the pre-election polls as well as 2019 Lok Sabha polls. Apart from monsoons, the overall agriculture sector is affected by any incentive from the government such as farm loan waivers, infrastructure creation, or other initiatives taken for increasing income of small and marginal farmers.
Farm loan waivers not only impact the banks and financial institutions but also have a major influence on the revenue of various agricultural related industries. One such impact can be seen in the sales of tractors. It has been historically seen that whenever there is an announcement of incentivizing the income of farmers like the farm loan waiver, there has been an uptick in the demand of tractors.

Farm Loan Waiver: Tractors an Anonymous Beneficiary

India - Politics, Industrials, IT and Large Caps, EMAlpha

Pankaj Sharma

India - Politics, Industrials, IT and Large Caps

The news flow for Indian Auto Industry is turning from bad to worse over previous few weeks as there have been multiple reports highlighting poor festival season sales, decline in numbers for vehicle registrations, sharp increase in inventory at dealers and liquidity crunch potentially impacting sales of CVs. However, November has not been that bad for several auto stocks and BSE Auto Index has also outperformed BSE SENSEX, albeit only marginally. <a href="https://www.smartkarma.com/entities/733" target="_blank" data-smartkarma-citation="entities:733:1">Maruti Suzuki India (MSIL IN)</a> , <a href="https://www.smartkarma.com/entities/2391" target="_blank" data-smartkarma-citation="entities:2391:1">Hero Motocorp (HMCL IN)</a> and <a href="https://www.smartkarma.com/entities/18316" target="_blank" data-smartkarma-citation="entities:18316:1">Eicher Motors (EIM IN)</a> have all been up approximately 10% or even more. This has led to a discussion on investment rationale in several stocks that bad news is fully in their price now and after the huge correction in the months of September and October, the market expectations have become more reasonable on how their business and financial performance will be. While this is somewhat true, we think that November sales numbers for the industry will be the real test because these figures will actually tell you how inventory has moved to end customers from dealers during the festive season. That will be a key factor in determining the near-term direction for these stocks in Indian Auto space.

The news flow for Indian Auto Industry is turning from bad to worse over previous few weeks as there have been multiple reports highlighting poor festival season sales, decline in numbers for vehicle registrations, sharp increase in inventory at dealers and liquidity crunch potentially impacting sales of CVs. However, November has not been that bad for several auto stocks and BSE Auto Index has also outperformed BSE SENSEX, albeit only marginally. Maruti Suzuki India (MSIL IN) , Hero Motocorp (HMCL IN) and Eicher Motors (EIM IN) have all been up approximately 10% or even more. This has led to a discussion on investment rationale in several stocks that bad news is fully in their price now and after the huge correction in the months of September and October, the market expectations have become more reasonable on how their business and financial performance will be. While this is somewhat true, we think that November sales numbers for the industry will be the real test because these figures will actually tell you how inventory has moved to end customers from dealers during the festive season. That will be a key factor in determining the near-term direction for these stocks in Indian Auto space.

India: News Flow Is Turning Even More Negative for Autos but Stocks Doing Well, What's Going On?

India

Mahindra & Mahindra is a prominent Indian multinational manufacturing corporation. It is a leading global manufacturer of tractors and a major producer of SUVs, commercial vehicles, and two-wheelers. Headquartered in Mumbai, India, the company was founded on October 2, 1945.

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Mahindra & Mahindra (MM IN)

India Consumption: More Signs of a Widening Slowdown

Bank lending to NBFCs has been flat since Oct-18 after rising by ~ Rs 1 tn in the previous 5-month period. Debt mutual fund holdings in NBFCs have...

Bhaskar Chakraborty

Shortlist Of High Conviction Ideas Across Japan, China, India - May 2026

As per Indian government retail registration website - Vahan - Automobile retail sales looks to be soft in the month of May'26. Few exceptions like...

Sreemant Dudhoria

Can India Fund A Sustained Consumption Boom?

The Indian underweight stance has paid off this quarter - the consensus consumption boom thesis rarely asks how it can be funded, given the...

Sean Maher

Farm Loan Waiver: Tractors an Anonymous Beneficiary

Farm loan waivers have been a key driver in the pre-election polls as well as 2019 Lok Sabha polls. Apart from monsoons, the overall agriculture...

Nitin Mangal

India: News Flow Is Turning Even More Negative for Autos but Stocks Doing Well, What's Going On?

The news flow for Indian Auto Industry is turning from bad to worse over previous few weeks as there have been multiple reports highlighting poor...

Pankaj Sharma

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