Equity L/S Analyst | Forensic Accounting | India, Yellowstone Equity

Ankit Agrawal, CFA

Equity L/S Analyst | Forensic Accounting | India

Creating Wealth through Alpha and Compounding

Yellowstone Equity

Providing unbiased and independent research on Indian equities to global institutions and individual investors


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Regulatory Disclosure: 
Note that Ankit Agrawal (Proprietor of Yellowstone Equity) is a SEBI registered Research Analyst (Registration No.: INH000007216). Registration granted by SEBI and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors. Investment in securities market are subject to market risks. Read all the related documents carefully before investing.

Research Analyst Contact Details:
Address: A-412, Shilp Aaron, Sindhu Bhavan Road, Ahmedabad, Gujarat - 380059
Email: services@yellowstoneequity.com
Mobile: +91-7575817289

Compliance/Grievance Officer:
Name: Ankit Agrawal
Email: services@yellowstoneequity.com
Mobile: +91-7575817289
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Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/bajaj-finance-ltd" target="_blank" data-smartkarma-citation="entities:8950:1" rel="noopener">Bajaj Finance Ltd (BAF IN)</a> ["BAF"] reported Q1FY23 PAT of approx. INR 2600cr which puts it on track to post INR 11,000cr+ PAT in FY23, in line with our projections. </li>
<li>BAF is back on its pre-COVID growth trajectory as also highlighted in our prior note. Q1FY23 AUM growth came in at 6.2% QoQ and annualized ROE is back to 20%+.</li>
<li>The strong Q1FY23 earnings is despite elevated competition in the marketplace which led BAF to forgo business where margin profile was not attractive.</li>
</ul>



Bajaj Finance Ltd (BAF IN) ["BAF"] reported Q1FY23 PAT of approx. INR 2600cr which puts it on track to post INR 11,000cr+ PAT in FY23, in line with our projections. 
BAF is back on its pre-COVID growth trajectory as also highlighted in our prior note. Q1FY23 AUM growth came in at 6.2% QoQ and annualized ROE is back to 20%+.
The strong Q1FY23 earnings is despite elevated competition in the marketplace which led BAF to forgo business where margin profile was not attractive.


Bajaj Finance: Stellar Earnings - In Line with Our Projections

External broker reports(aggregated public sources), HDFC Securities

HDFC Securities

External broker reports(aggregated public sources)

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.

Thematic (Sector/Industry)

<ul><li>Havells India: Havells delivered a strong topline performance, led by broad-based growth across all categories, with a beat on our RAC and Switchgear estimates</li><li>Revenue grew by 16% on three-year CAGR (15% ex-Lloyd) while Lloyd business sustained 18% three-year revenue CAGR</li><li>All segments including Switchgear saw close to mid-teen three-year revenue CAGR</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>

Havells India: Havells delivered a strong topline performance, led by broad-based growth across all categories, with a beat on our RAC and Switchgear estimatesRevenue grew by 16% on three-year CAGR (15% ex-Lloyd) while Lloyd business sustained 18% three-year revenue CAGRAll segments including Switchgear saw close to mid-teen three-year revenue CAGRContent 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: Havells India, JSW Energy, Kajaria Ceramics, ICICI Securities

External broker reports(aggregated public sources), Nirmal Bang

Nirmal Bang

A Relationship Beyond Broking

Nirmal Bang, one of the leading stock broking companies in India, caters to retail and institutional clients by offering them a range of financial products and services, including equities, derivatives, commodities, currency derivatives, mutual funds, IPOs, insurance, depository services and PMS.

Nirmal Bang is drawn from a diversity of professional backgrounds, and blend of experience, skill and dedication is shared with its clients. Nirmal Bang emphasizes adequate, thorough research local and world-wide developments, balancing these with the astute discovery of intrinsic values, synergies and growth. The aim is simply to help the investors to maximize their returns.

<div><ul><li>Treasury losses to dent earnings: While we expect NII growth to be strong (up 16.9% YoY for coverage banks), treasury losses could be a major drag on operating profit growth.</li><li><p>Systemic credit growth, provisional updates indicate optimism: As per RBI’s latest data, systemic credit growth rate is 12% YoY (June’22).</p></li><li><p><span style="font-size: var(--content-font-size);">Large cap banks showing stronger traction than peers; housing doing well: We expect large cap coverage banks to continue to report higher growth (20.7% YoY) vis-à-vis mid/small-cap peers (16.9% YoY) and PSBs (15.5% YoY).</span></p></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>

Treasury losses to dent earnings: While we expect NII growth to be strong (up 16.9% YoY for coverage banks), treasury losses could be a major drag on operating profit growth.Systemic credit growth, provisional updates indicate optimism: As per RBI’s latest data, systemic credit growth rate is 12% YoY (June’22).Large cap banks showing stronger traction than peers; housing doing well: We expect large cap coverage banks to continue to report higher growth (20.7% YoY) vis-à-vis mid/small-cap peers (16.9% YoY) and PSBs (15.5% YoY).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.

Banking & Financials Sector - Weak Treasury to Dent Earnings

Specialist in Indian Banking and Economic Research

Hemindra Hazari

<ul>
<li>When stocks languish, or spiral downwards, it is not just shareholders whose wealth erodes. Senior executives, also suffer, as much of their personal wealth may be tied up in ESOPs. </li>
<li>Few HDFC Bank ESOPs  may be of concern to executives while many ESOPs of RBL Bank and Bandhan Bank are under water</li>
<li>ESOPs are a major retention tool for holding onto executives. If ESOPs are under water it may accelerate senior executive attrition worsening the situation</li>
</ul>


When stocks languish, or spiral downwards, it is not just shareholders whose wealth erodes. Senior executives, also suffer, as much of their personal wealth may be tied up in ESOPs. 
Few HDFC Bank ESOPs  may be of concern to executives while many ESOPs of RBL Bank and Bandhan Bank are under water
ESOPs are a major retention tool for holding onto executives. If ESOPs are under water it may accelerate senior executive attrition worsening the situation


When Bank ESOPs Go Under Water, Expect Senior Management to Be Distracted or Departing

Smartkarma Research Team, Smartkarma

Smartkarma Research

Smartkarma Research Team

Smartkarma

Smartkarma unites the fragmented investment industry, connecting institutional investors, independent research providers, and corporates within a single network.

Research Reinvented

<p>In our next Webinar, we welcome back Analyst <a href="https://www.smartkarma.com/profiles/hemindra-hazari" target="_blank" data-smartkarma-citation="accounts:941" rel="noopener">Hemindra Hazari</a> , who will outline his views on recent corporate governance developments in Indian financial institutions, separating the narrative from the reality on the ground.</p>
<h3>The webinar will be hosted on Wednesday, 18 May 2022, 17:00 SGT/HKT.</h3>
<div class="content-highlight">
<h2><a href="https://share.hsforms.com/1H9pFZOB-RF2J00kbvMmxcw2c5gj?zoom_webinar_id=85136698938" target="_blank" rel="noopener">Register for the Webinar here</a></h2>
</div>
<p>Hemindra Hazari is a SEBI-registered research analyst with over 25 years of experience in the Indian capital markets, specialising in banking and economy research. He has managerial experience in establishing profitable equities business, leading, and mentoring analysts. He has worked with prominent foreign and domestic capital market firms such as UBS, Societe Generale, HSBC, ASK Raymond James, and Karvy Stock Broking, and is a regular guest on business media channels and is respected for his non-consensus view on stocks and the market.</p>

In our next Webinar, we welcome back Analyst Hemindra Hazari , who will outline his views on recent corporate governance developments in Indian financial institutions, separating the narrative from the reality on the ground.
The webinar will be hosted on Wednesday, 18 May 2022, 17:00 SGT/HKT.

Register for the Webinar here

Hemindra Hazari is a SEBI-registered research analyst with over 25 years of experience in the Indian capital markets, specialising in banking and economy research. He has managerial experience in establishing profitable equities business, leading, and mentoring analysts. He has worked with prominent foreign and domestic capital market firms such as UBS, Societe Generale, HSBC, ASK Raymond James, and Karvy Stock Broking, and is a regular guest on business media channels and is respected for his non-consensus view on stocks and the market.

Smartkarma Webinar | Myth Vs Reality: Corporate Governance in India's Financial Sector

India

RBL Bank Limited operates as a commercial bank. The Company offers banking products and services such as savings accounts, fixed deposits, personal and business loans, debit and credit cards, insurance, investment management, and mobile banking. RBL Bank serves customers throughout India.

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RBL Bank Ltd (RBK IN)

Bajaj Finance: Stellar Earnings - In Line with Our Projections

BAF reported stellar Q1FY23 earnings. With PAT of approximately INR 2600cr, BAF is on track to report FY23 PAT of INR 11000cr+, in line with our...

Ankit Agrawal, CFA

HSIE Results Daily: Havells India, JSW Energy, Kajaria Ceramics, ICICI Securities

Havells India: Havells delivered a strong topline performance, led by broad-based growth across all categories, with a beat on our RAC and...

HDFC Securities

Banking & Financials Sector - Weak Treasury to Dent Earnings

We expect banks to report weak earnings due to treasury losses. We expect operating earnings of coverage banks to decline by 6.5% YoY and 11.2% QoQ...

Nirmal Bang

When Bank ESOPs Go Under Water, Expect Senior Management to Be Distracted or Departing

A decling/flat share price not only frustrates shareholders but can prove disastrous for senior executives either locked into/granted ESOPs at...

Hemindra Hazari

Smartkarma Webinar | Myth Vs Reality: Corporate Governance in India's Financial Sector

On 18 May, 5pm SGT, join our Webinar with Analyst Hemindra Hazari, who will outline his views on corporate governance in Indian financial...

Smartkarma Research

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