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

<ul>
<li>We see 8 stocks moving from MidCap to LargeCap, 8 stocks moving from LargeCap to MidCap, 13 stocks from SmallCap to MidCap, and 13 stocks from MidCap to SmallCap.</li>
<li>The expected migrations from SmallCap to MidCap have outperformed the other potential migrations with all stocks moving higher over the last six month.</li>
<li>Active managers could continue to realign their portfolios. Some of the upward migrations will have passive flows in the next few days and over the next few months.</li>
</ul>


We see 8 stocks moving from MidCap to LargeCap, 8 stocks moving from LargeCap to MidCap, 13 stocks from SmallCap to MidCap, and 13 stocks from MidCap to SmallCap.
The expected migrations from SmallCap to MidCap have outperformed the other potential migrations with all stocks moving higher over the last six month.
Active managers could continue to realign their portfolios. Some of the upward migrations will have passive flows in the next few days and over the next few months.


AMFI Stock Reclassification Preview (Dec 2023): Overlap Between Active & Passive Flows

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

Motilal Oswal

External broker reports(aggregated public sources)

Motilal Oswal Financial Services Limited

Motilal Oswal Financial Services Limited is an Indian diversified financial services firm offering a range of financial products and services. 

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>Oil drilling activities remain vigorous globally as the countries move away from their dependence on Russian oil and gas.</li><li>Average global rig counts have risen 10% since the Russia-Ukraine conflict started in Mar’22.</li><li>In line with the above, Vinati Organics (VO)’s management outlook for ATBS remains robust and it has announced a 50% capacity expansion to 60ktpa (from 40ktpa), which is likely to come online in 2HFY24.</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>

Oil drilling activities remain vigorous globally as the countries move away from their dependence on Russian oil and gas.Average global rig counts have risen 10% since the Russia-Ukraine conflict started in Mar’22.In line with the above, Vinati Organics (VO)’s management outlook for ATBS remains robust and it has announced a 50% capacity expansion to 60ktpa (from 40ktpa), which is likely to come online in 2HFY24.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.

Vinati Organics - ATBS Demand Outlook Robust; Realizations Firm

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.

<div><div><div><div><ul><li>Our SELL recommendation on Vinati Organics with a discounted cash flow- based target price of INR 1,765 (WACC 11%, terminal growth 5%) is driven by a shift in the revenue mix towards lower-margin iso butyl benzene (IBB), butyl phenol, and other products as compared to ATBS, which has a higher margin.</li><li>We believe the current valuation is contextually high at ~36x FY24E EPS.</li><li>Q1 EBITDA/APAT were 12/6% below our estimates, owing to a 5% fall in revenue, higher-than-anticipated raw material cost, offset by higher-than-expected other income.</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></div></div></div></div>

Our SELL recommendation on Vinati Organics with a discounted cash flow- based target price of INR 1,765 (WACC 11%, terminal growth 5%) is driven by a shift in the revenue mix towards lower-margin iso butyl benzene (IBB), butyl phenol, and other products as compared to ATBS, which has a higher margin.We believe the current valuation is contextually high at ~36x FY24E EPS.Q1 EBITDA/APAT were 12/6% below our estimates, owing to a 5% fall in revenue, higher-than-anticipated raw material cost, offset by higher-than-expected other income.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.

Vinati Organics - ATBS Witnessing Strong Demand

<ul><li>VO reported a beat on our EBITDA estimate, with gross margin in line at 46% (-300bp QoQ). Revenue was above our estimate in 4QFY22, with EBITDAM at 28.6% (+340bp QoQ).</li><li>The management has guided at a sales growth of 25-30% YoY each in FY23 and FY24, led by the commissioning of an antioxidant plant and foray into niche chemicals through Veeral Organics (an Agrochemical intermediate).</li></ul><ul><li>We expect margin to be better going forward, with EBITDAM at 29%/31% in FY23/FY24. This will be driven by a captive power plant, decline in raw material cost, as well as the commissioning of higher-margin downstream products.</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>

VO reported a beat on our EBITDA estimate, with gross margin in line at 46% (-300bp QoQ). Revenue was above our estimate in 4QFY22, with EBITDAM at 28.6% (+340bp QoQ).The management has guided at a sales growth of 25-30% YoY each in FY23 and FY24, led by the commissioning of an antioxidant plant and foray into niche chemicals through Veeral Organics (an Agrochemical intermediate).We expect margin to be better going forward, with EBITDAM at 29%/31% in FY23/FY24. This will be driven by a captive power plant, decline in raw material cost, as well as the commissioning of higher-margin downstream products.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.

Vinati Organics - Lower OPEX and Employee Cost Leads to Better Margin

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><div><div><div><ul><li>4QFY22 earnings performance: Key products like ATBS, IBB and Butyl Phenol delivered strong volume-led growth for VO in 4QFY22.</li></ul><div><div><div><div><ul><li>Update on new growth drivers: Management has already announced further expansion of the Butyl Phenol capacity through a brownfield expansion (~14KTPA incremental capacity, capex of Rs1.5bn), which will be largely be used captively for AOs.</li></ul><div><div><div><div><ul><li>Demand as well as pricing for AOs has increased and hence after considering additional lube additives, management expects peak revenue of Rs7bn from AOs.</li></ul></div></div></div></div></div></div></div></div></div></div></div></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>

4QFY22 earnings performance: Key products like ATBS, IBB and Butyl Phenol delivered strong volume-led growth for VO in 4QFY22.Update on new growth drivers: Management has already announced further expansion of the Butyl Phenol capacity through a brownfield expansion (~14KTPA incremental capacity, capex of Rs1.5bn), which will be largely be used captively for AOs.Demand as well as pricing for AOs has increased and hence after considering additional lube additives, management expects peak revenue of Rs7bn from AOs.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.

Vinati Organics - Existing Products to Drive FY23 Growth

India

Vinati Organics Limited is a prominent Indian manufacturer of specialty chemicals and organic intermediates. The company is a global leader in producing Isobutyl Benzene (IBB) and 2-Acrylamido-2-Methylpropane Sulfonic Acid (ATBS), serving pharmaceutical, agrochemical, personal care, water treatment, and polymer industries. Headquartered in Mumbai, India, the company was founded in 1989.

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Vinati Organics (VO IN)

AMFI Stock Reclassification Preview (Dec 2023): Overlap Between Active & Passive Flows

We see 42 potential migrations between the size categories. The small to mid migrations have outperformed. There will be a lot of overlap between...

Brian Freitas

Vinati Organics - ATBS Demand Outlook Robust; Realizations Firm

Oil drilling activities remain vigorous globally as the countries move away from their dependence on Russian oil and gas.

Motilal Oswal

Vinati Organics - ATBS Witnessing Strong Demand

Q1 EBITDA/APAT were 12/6% below our estimates, owing to a 5% fall in revenue, higher-than-anticipated raw material cost, offset by higher-than...

HDFC Securities

Vinati Organics - Lower OPEX and Employee Cost Leads to Better Margin

VO reported a beat on our EBITDA estimate, with gross margin in line at 46% (-300bp QoQ). Revenue was above our estimate in 4QFY22, with EBITDAM at...

Motilal Oswal

Vinati Organics - Existing Products to Drive FY23 Growth

Vinati Organics’ (VO) 4QFY22 EBITDA came in ~32% above our estimate on account of strong growth in key products and normalization of select cost items

Nirmal Bang

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