Derivatives and Quantitative Strategist

Gaudenz Schneider

Equity Bottom-Up

<ul>
<li>The <a href="https://www.smartkarma.com/entities/canara-bank" target="_blank" data-smartkarma-citation="entities:543:1" rel="noopener">Canara Bank (CBK IN)</a> vs. <a href="https://www.smartkarma.com/entities/lic-housing-finance-ltd" target="_blank" data-smartkarma-citation="entities:15667:1" rel="noopener">LIC Housing Finance (LICHF IN)</a> Price-Ratio has deviated more than two standard deviations from its one-year average, presenting a potential relative value opportunity.</li>
<li>The relative value opportunity can be implemented through stocks, derivatives, or as relative over-/underweights in a long only context.</li>
<li>This Insight provides a target return and discusses trade setup and risk management strategies.</li>
</ul>


The Canara Bank (CBK IN) vs. LIC Housing Finance (LICHF IN) Price-Ratio has deviated more than two standard deviations from its one-year average, presenting a potential relative value opportunity.
The relative value opportunity can be implemented through stocks, derivatives, or as relative over-/underweights in a long only context.
This Insight provides a target return and discusses trade setup and risk management strategies.


Pair Trade Signal: LIC Housing Finance (LICHF IN) Long Vs. Canara Bank (CBK IN) Short

India Equity Analyst - Fundamental & Thematic, Beat the Street

Sudarshan Bhandari

India Equity Analyst - Fundamental & Thematic

Beat the Street

Beat The Street was founded by Nimish Maheshwari and Sudarshan Bhandari, both of whom are Chartered Accountants by Profession, known for their expert analysis in the fields of Business, Sectoral analysis, and Corporate governance.

With a strong social media presence of 45,000+ Subscribers across various platforms, they are considered trusted voices in the industry. Their insights and analysis have been featured in some of India’s most prominent publications, including the Economic Times, Dalal Street Investment Journal, The Morning Context, and The Ken.

Their analysis on Bankrupt & Insolvent companies has been instrumental in saving investors from significant losses. They have a keen eye for identifying red flags and has identified exclusive redflags earlier in Vedanta, Nykaa, Dhani Services, Adani and many more.

Read Business Not Stock Prices

Thematic (Sector/Industry)

<ul>
<li>BSE500 reported a recovery in PAT growth from 8% YoY in Q3FY25 to 10% YoY in Q4FY25, but top-line growth remained flat at just 8%, continuing a weak trend.</li>
<li>Margin expansion was cost-driven, with wage bill growth slowing to 5% YoY i.e. its lowest level post-COVID impacting future consumption potential.</li>
<li>FY26 BSE500 EPS estimates were cut by 3% in Q4, totaling a 10% downgrade YoY, signaling stagnation despite index valuation rollover.</li>
</ul>


BSE500 reported a recovery in PAT growth from 8% YoY in Q3FY25 to 10% YoY in Q4FY25, but top-line growth remained flat at just 8%, continuing a weak trend.
Margin expansion was cost-driven, with wage bill growth slowing to 5% YoY i.e. its lowest level post-COVID impacting future consumption potential.
FY26 BSE500 EPS estimates were cut by 3% in Q4, totaling a 10% downgrade YoY, signaling stagnation despite index valuation rollover.


Charted Insights: Is Indian Earnings Recovery in Q4FY25 Sustainable?

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

HDB Financial Services Ltd / Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/hdb-financial-services-ltd" target="_blank" data-smartkarma-citation="entities:44072:1" rel="noopener">HDB Financial Services Ltd (0117739D IN)</a> is looking to list on the exchanges by selling up to INR125bn (US$1.46bn) of stock at a valuation of around INR 620bn (US$7.2bn).</li>
<li>The stock will not get Fast Entry to either of the global indices. The earliest inclusion in a global index should take place in December.</li>
<li>
<a href="https://www.smartkarma.com/entities/hdb-financial-services-ltd" target="_blank" data-smartkarma-citation="entities:44072:1" rel="noopener">HDB Financial Services Ltd</a>'s peers have traded well over the last 6 months and that could spill over into demand for the stock. Grey market premium is pretty high.</li>
</ul>



HDB Financial Services Ltd (0117739D IN) is looking to list on the exchanges by selling up to INR125bn (US$1.46bn) of stock at a valuation of around INR 620bn (US$7.2bn).
The stock will not get Fast Entry to either of the global indices. The earliest inclusion in a global index should take place in December.

HDB Financial Services Ltd's peers have traded well over the last 6 months and that could spill over into demand for the stock. Grey market premium is pretty high.


HDB Financial IPO: Offer Details & Index Entry Timing

<ul>
<li>BSE500 PAT growth slowed over 50% to 10%, not demand-led, with revenue stable below 10% This warrants careful sectoral positioning due to cost-driven margins.</li>
<li>Pharma, FMCG, Paints are at peak 10-year margins, offering limited upside. Durables, Chemicals, Cement, QSR offer margin potential if demand improves.</li>
<li>Persistent EPS downgrades across key sectors like Export Auto (-11%), Non-lending Financials (-7%), Apparel/Retail (-6%), and Pharmaceuticals imply stretched valuations whereas telecom and consumer services avoided negative revision of EPS. </li>
</ul>


BSE500 PAT growth slowed over 50% to 10%, not demand-led, with revenue stable below 10% This warrants careful sectoral positioning due to cost-driven margins.
Pharma, FMCG, Paints are at peak 10-year margins, offering limited upside. Durables, Chemicals, Cement, QSR offer margin potential if demand improves.
Persistent EPS downgrades across key sectors like Export Auto (-11%), Non-lending Financials (-7%), Apparel/Retail (-6%), and Pharmaceuticals imply stretched valuations whereas telecom and consumer services avoided negative revision of EPS. 


Charted Insights: Evaluating Indian Sectoral Positioning After FY25 Earnings

<ul>
<li>India's corporate profit-to-GDP ratio held steady at a 17-year high of 4.7% in FY25 for the Nifty-500 universe, reflecting a healthy 10.5% YoY PAT growth</li>
<li>While the world grapples with geopolitical challenges, India's macroeconomic indicators- including strong GDP growth, a stable currency, and moderating inflation and interest rates - present a contrasting and resilient picture.</li>
<li>India Inc is entering again the faster earnings growth cycle than GDP growth, currently growing at 3x of broder economic growth.</li>
</ul>


India's corporate profit-to-GDP ratio held steady at a 17-year high of 4.7% in FY25 for the Nifty-500 universe, reflecting a healthy 10.5% YoY PAT growth
While the world grapples with geopolitical challenges, India's macroeconomic indicators- including strong GDP growth, a stable currency, and moderating inflation and interest rates - present a contrasting and resilient picture.
India Inc is entering again the faster earnings growth cycle than GDP growth, currently growing at 3x of broder economic growth.


Charted Insights : India's Corporate Profit-To-GDP Ratio: A Structural Shift

India

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S&P BSE SENSEX Index (SENSEX INDEX EQUITY)

Pair Trade Signal: LIC Housing Finance (LICHF IN) Long Vs. Canara Bank (CBK IN) Short

Long LIC Housing Finance vs. short Canara Bank continues to be flagged as a statistical relative value play. The pair's price ratio is currently...

Gaudenz Schneider

Charted Insights: Is Indian Earnings Recovery in Q4FY25 Sustainable?

BSE500 sees recovery in profit growth but flat top-line growth, margin expansion driven by cost-cutting, FY26 EPS estimates cut by 3% in Q4.

Sudarshan Bhandari

HDB Financial IPO: Offer Details & Index Entry Timing

HDB Financial is looking to raise INR 125bn (US$1.46bn) at a rumored valuation of INR 620bn (US$7.2bn). No Fast Entry to global index due to low...

Brian Freitas

Charted Insights: Evaluating Indian Sectoral Positioning After FY25 Earnings

BSE500 PAT growth slows to 10%, caution needed on sector positioning due to cost-driven margins & stretched valuations in key sectors like Export...

Sudarshan Bhandari

Charted Insights : India's Corporate Profit-To-GDP Ratio: A Structural Shift

India's corporate profits remain strong at a 17-year high, outpacing GDP growth and showing resilience amidst global challenges.

Sudarshan Bhandari

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Pair Trade Signal: LIC Housing Finance (LICHF IN) Long Vs. Canara Bank (CBK IN) Short

Long LIC Housing Finance vs. short Canara Bank continues to be flagged as a statistical relative value play. The pair's price ratio is currently...

Gaudenz Schneider

Charted Insights: Is Indian Earnings Recovery in Q4FY25 Sustainable?

​BSE500 sees recovery in profit growth but flat top-line growth, margin expansion driven by cost-cutting, FY26 EPS estimates cut by 3% in Q4.

Sudarshan Bhandari

HDB Financial IPO: Offer Details & Index Entry Timing

HDB Financial is looking to raise INR 125bn (US$1.46bn) at a rumored valuation of INR 620bn (US$7.2bn). No Fast Entry to global index due to low...

Brian Freitas

Charted Insights: Evaluating Indian Sectoral Positioning After FY25 Earnings

​BSE500 PAT growth slows to 10%, caution needed on sector positioning due to cost-driven margins & stretched valuations in key sectors like Export...

Sudarshan Bhandari

Charted Insights : India's Corporate Profit-To-GDP Ratio: A Structural Shift

​India's corporate profits remain strong at a 17-year high, outpacing GDP growth and showing resilience amidst global challenges.

Sudarshan Bhandari

BSE500 sees recovery in profit growth but flat top-line growth, margin expansion driven by cost-cutting, FY26 EPS estimates cut by 3% in Q4.

BSE500 PAT growth slows to 10%, caution needed on sector positioning due to cost-driven margins & stretched valuations in key sectors like Export...

India's corporate profits remain strong at a 17-year high, outpacing GDP growth and showing resilience amidst global challenges.