India

• Home First Finance (HOMEFIRS IN) is growing fast and has a low operating cost, there is a reason why. 
• Aavas Financiers Ltd (AAVAS IN) operates in its own specific domain taking only risks that it is comfortable with.  
• Competitive feedback is positive for IIFL Holdings (IIFL IN) ‘s HF subsidiary. Capri Global Capital (CGCL IN) seems to be following AU Bank’s footsteps, but hopefully only in underwriting.

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• Bharti Airtel
• Country Garden Holdings Co
• Fantasia Holdings Group Co
• Meituan
• China Datang Corp Renewable Power
• Road King Infrastructure

• Kayak Investments Holding, an affiliate of KKR & Co Inc (KKR US), is planning to raise US$1.18bn from trimming the majority of its stake in Max Healthcare Institute (MAXHEALT IN).
• The deal is a large one and assuming the upsized option is exercised, the offer size would represent 26.83% of outstanding shares and 414.9 days of three month ADV.
• The firm’s financial prospects are decent with analysts in general bullish on the stock. However, the large deal is offered at a tight 0-3.3% discount to last close.

• A news report has indicated that SEBI is looking to tighten criteria used for inclusion and continued availability of stocks in the Futures & Options (F&O) segment of the market.
• Our analysis shows 30 stocks could be deleted from the F&O segment while another 12 are close to deletion zone. If applied objectively, 22 stocks could be added to F&O.
• Deletion from the F&O segment could see two stocks dropped from the Nifty Next 50 Index while inclusion in F&O could see two stocks added to the NIFTY Index.

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• Azure Power Global Ltd
• Olam Group

• Deepak Nitrite (DN IN) has emerged as one of the key players in the chemical intermediate industry over the last few years.
• The company’s emergence saw a structural and more or less a positive change in the balance sheet health and overall scheme of operations.
• The green flags include strong balance sheet position and surging return ratios, while the red flags include poor cash transmission and margin losses lately.

• This is now the third Int’l Compass/third week in a row where we are discussing an increasing number of country indexes experiencing bullish 3.5-9-month downtrend reversals.
• Importantly, all of the previously mentioned indexes are holding above their breakout levels (i.e., there has yet to be any failed breakouts).
• Now, the U.S. dollar (DXY) is starting to show early signs of topping. We continue to believe that global equities are going through a bottoming process.

Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and also showcase a list of the most-read reports.

In this Insight:

1. Pakuwon Jati
2. Softbank Group
3. Lenovo
4. China SCE
5. Kwg Property Holding

and more…

• With Q1FY23 PAT at INR 925cr+, LICHF is on track to beat our prior estimate of INR 3600cr+ for FY23 PAT.
• We now project that LICHF can do INR 3850cr+ PAT in FY23, implying that at the current market cap of INR 21,000cr, LICHF is trading cheap at <5.5x FY23 P/E.
• Credit cost for the quarter was slightly higher at annualized 0.5% of AUM, however, excluding slippages from the OTR book, it was in line with long-term average of around 0.2-0.3%.

• Typically net interest margins and loan volume are what matter most for banks
• ICICI is showing strength in both core financial metrics, but also in credit costs
• Of the large 3 banks in India, ICICI may continue to show the best marginal deltaCI

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• Bharti Airtel
• Guangzhou R&F Properties
• Indika Energy

• Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
• Placements continued to take center stage this week, beginning with Uber’s clean-up sale of Zomato.
• Socar launched its one-day bookbuild earlier in the week. We continued looking at the upcoming deals in our pipeline. 

• Apart from being known as one of the most innovative companies in today’s times, 3M also has a strong reputation of successful restructuring and cost management which has helped the industrial conglomerate survive through many challenging business cycles.
• The company continues to benefit from strong spending discipline, restructuring savings, and selling price actions.
• We provide the stock of 3M Company with a ‘Hold’ rating with a revision in the target price.

• Phonepe Pvt Ltd (1732974D IN) runs a digital payment and technology App in India and is currently the leader in terms of UPI transactions processed. 
• Our channel feedback suggests the possible disruption from initiatives like ONDC to be positive for payment apps like PhonePe, with the possible acceleration towards the SuperApp Journey. 
• Revenues are always growing, and so are losses. With ONDC, there is a possibility this may change faster than anticipated and hence warrants close attention. 

• Sai Silk Kalamandir (SSKL IN) is looking to raise about US$150m in its upcoming India IPO. The deal will be run by Motilal Oswal, Edelweiss and HDFC Bank. 
• Sai Silk Kalamandir (SSK) is one of the largest retailers of ethnic apparel in South India, particularly in sarees, according to Technopak. 
• Through its four store formats, it offers ethnic and value fashion products to various segments across different price points. As of 31 May 2022, it has 46 network stores. 

• Uber (UBER US) is looking to raise US$420m in its share sale in Zomato (ZOMATO IN). The selldown will be a clean-up sale.
• Uber had earlier inherited its stake in Zomato in 2020 when it sold UberEats India to the latter. 
• We had earlier flagged the possibility of a selldown given that most of Zomato’s investors would come off their respective one-year lockups. 

• Apna (1826169D IN) ‘s is India leading networking and jobs platform primarily targeted towards the +250 million grey and blue collared workers, who usually are not on Linkedin. 
• Channel feedback is mixed, Apna is not the only platform of choice. Community initiatives and vernacular interface are key differentiators along with simplicity. 
• Profitability could remain a challenge, Monetisation is work in progress. The model is interesting, but making money off the bottom of the pyramid has never been easy. 

• Tesla had been in the process of carrying out upgrades which resulted in a lengthy shutdown of its Shanghai factory.
• The company faced its fair share of challenges but had a highly resilient quarter and managed to produce an all-around beat.
• The most significant accomplishment was setting production records in Shanghai and Fremont in June.

• As a legacy tech company, IBM may have seen a slowdown in its growth trajectory but its acquisition-led growth approach continues to work.
• With this performance, the company is maintaining its model of mid-single-digit revenue growth and a double-digit performance in IBM Consulting.
• In this report, we have carried out a fundamental analysis of the historical financial statements of the company.

• Netflix has had a bad 2022 so far.
• The company continued with its trajectory of subscriber losses in the most recent quarter and lost another million subscribers.
• Given the current uncertainty levels, we give Netflix a ‘Hold’ rating with a revised target price.