India

• Sun Pharmaceutical Industries (SUNP IN) (SPIL) announced the plan to acquire Checkpoint Therapeutics (CKPT US), a commercial stage immunotherapy and targeted oncology company, for ~$200M.
• In December, Checkpoint has received FDA approval for its maiden drug, Unloxcyt (cosibelimab), for the treatment of certain type of skin cancer. Unloxcyt has peak sales estimate of $1.6B.
• SPIL’s offer for Checkpoint seems compelling and provides superior risk-adjusted value. However, the acquisition will not be near-term value generator for SPIL, which doesn’t have good track record for acquisition.

• COAL’s production growth during Apr-Feb 25 has slowed to 1.5% yoy due to a high base effect and is unlikely to grow significantly in the near future
• Regulated pricing mechanism means low correlation to international price movements. E-auction (10-12% of volumes) prices crash -25% yoy in line with international trends, impacting profitability
• Single digit PE is in line with historic multiples. Wage renegotiations due in June 2026, rising coal production from captive producers, surge in renewable capacities are headwinds

Bharti Airtel is the second-largest telecom player in India, with a c. 30% market share. It also has significant operations in Africa, and to a smaller extent Bangladesh and Sri Lanka. The largest shareholders are Bharti Enterprises (42%) and Singtel (14%). Bharti Enterprises was founded/owned by Sunil Bharti Mittal. It is one of India’s first conglomerates, with interests in telecommunications, space, insurance, real estate, hospitality and food.

We view Bharti Airtel as “Low Risk” on the LARA scale, mainly given its strong market position as the second-largest player in India’s telecom industry. The company owns robust network infrastructure across the country, with a broad customer base. We also note positively the improving industry outlook, with rationalising competition and industry consolidation benefiting Bharti Airtel, along with improving regulatory conditions. The company is committed to prudent balance-sheet management and stable leverage. However, capex requirements will likely remain substantial given Bharti Airtel’s 5G rollout, with a risk that capex will be higher than projected.

• Strong focus on capacity enhancement. Increasing steelmaking capacity by 65% over the next 3 years to 15.9mt.
• Recent margin dip provides attractive entry point. Promoters/insiders have bought into recent decline in stock price
• Attractive long-term play on rising domestic steel demand. Low debt levels at <1.4x EBITDA allows for steady capacity addition. 

• The Nifty snapped its losing streak with a sharp rebound, rising 1.92% for the week.
• Implied volatility struggled to hold up, trading lower through most of the week.
• We break down the implied vs. historic vol relationship and what it signals for traders.

• Gensol clarified that debt woes are because of short term liability mismatch which contradicts with Lender’s clarification
• Promoter said they will buy from the open market and will also infuse money into company but their recent stake sale again contradicts.
• 2nd CFO Resignation within 6 months further raises alarm over governance issues.

• Play on rising aluminium demand. Aluminium demand has outpaced supply with strong Chinese demand. 
• Management has guided better margins at Novelis which faced a temporary drop in margins due to scrap shortages.
• Hindalco’s Indian operations are fully integrated with captive bauxite, alumina and to certain extent for energy. Trades at a 20%+ discount to its historic PE multiples.

• NACL posted its best ever quarterly performance in 3QFY25, driven by a sharp spike in alumina prices. Alumina prices have since cooled off but remain elevated at above US$450/t
• NACL is set to expand its alumina capacity by 33% over the next 12 months. This will help double its external alumina sales from 1mt to 2mt. 
• Trades at 25% discount to historic PE of 13x despite record earnings, healthy balance sheet and strong near-term volume growth driven by brownfield expansion.

• Jai Corp Ltd (JFI IN) allegedly misappropriated INR2,434 crore from investors, diverted funds offshore, and engaged in fraudulent trading, triggering CBI probe into financial misconduct, money laundering, illegal stock manipulation.
• The Bombay High Court directed a CBI investigation after allegations surfaced of fake exports, foreign currency loan diversion, and fund rotation through shell companies in Mauritius and Jersey.
• Jai Corp claims no official notice of the FIR yet but pledges full cooperation; investors await regulatory actions from SEBI, RBI, and ED, which could impact the company’s financial standing.

• The company is expected to see multiple capacity expansions coming online in FY26, with ramp-up occurring throughout FY26 and FY27 onwards.
• Currently, execution challenges and unavoidable delays have impacted the company’s revenue and margin trajectory, resulting in depressed margins on a short-term basis.
• As new projects come online and product ramp-ups occur, it expects revenue and margin expansion, ultimately reflecting in the bottom line due to the increased gross block & new products.

• Coforge (COFORGE IN)‘s $1.56 billion deal with Sabre positions it as a major player in travel technology, but concerns over Sabre’s financial stability create potential risks for long-term execution.
• Acquisitions of Rythmos and TMLabs align with Coforge’s strategy to enhance cloud, data, and enterprise IT capabilities, strengthening its market position in airline and ServiceNow implementation services.
• While analysts recognize strong revenue visibility, Sabre’s $5.1 billion debt and negative net worth raise cash flow concerns, leading to a divided outlook on Coforge’s future profitability and risk exposure.

• Mahindra & Mahindra (MM IN)growth has been an outlier in the intensely competitive Indian passenger car industry.We share insights on how this trend has evolved over the past several months.
• This insight provides detailed analysis of sales performance of key players-Maruti Suzuki India (MSIL IN) ,Mahindra & Mahindra (MM IN),Tata Motors Ltd (TTMT IN) & Hyundai Motor India (HYUNDAI IN) 
• Various initiatives introduced in the recent Union Budget are expected to boost demand for passenger cars in the medium term.

• Gensol Engineering (GENSOL IN)’s credit rating was downgraded to default, triggering a 34% stock decline in just five days. ICRA flagged misleading financial disclosures, high promoter pledges raised serious concerns.
• The company is grappling with delayed debt repayments, aggressive accounting policies, and uncertainty in equity infusion, impacting its ambitious EV manufacturing and solar EPC expansion plans.
• Gensol’s governance issues, cross-default risks, and financial opacity create a high-risk scenario for investors. Management must provide clarity on debt servicing, pledged shares, and capital infusion to restore confidence.

• Steep fall in diamond prices leading to slowdown in demand for certification services since its not viable as much for a consumer as it used to be.
• A leading jeweller in India reiterated that certification demand for diamonds is slowing down due to changing consumer preferences.
• The International Gemmological Institute, the leading certification agency, is now facing headwinds evident from earnings growth slowdown.

• AGS Transact Technologies (AGSTRA IN)‘ stock plunged 85% in six months due to loan defaults, delayed payments, and severe cash flow issues.
• The company is on the verge of insolvency as debt defaults, SLA breaches, and auditor concerns mount. Independent directors, executives, and key employees are resigning, signaling deep-rooted financial instability.
• The management’s revival plan, including selling subsidiaries and restructuring loans, may be too late. The cash management business is highly sensitive to disruptions, making recovery uncertain. 

• Kitex Garments (KTG IN) is the world’s second-largest manufacturer of ready-to-wear clothing for infants and children.
• KGL is expanding its manufacturing capabilities by establishing two new integrated units in Warangal and Sitarampur, Telangana which will increase capacity to 10.68L pieces per day.
• Kitex Garments is also planning to merge with Kitex Childrenswear Limited, which sell processed fabrics, rental agreements for factory premises, and special job work contracts for KGL.

• Travel Food Services Ltd (1450229D IN) is looking to raise about US$238m in its upcoming India IPO.
• Travel Food Services Limited (TFS) operates a network of travel quick service restaurants (Travel QSRs) and private lounges in airports.
• In this note, we talk about the company’s historical performance.

• PMEA Solar Tech Solutions Limited (0991151D IN) (PSTSL) is planning to raise about US$116m through its upcoming India IPO. 
• PSTSL specializes in manufacturing solar equipments, primarily focusing on module mounting assemblies and rolled products. Its other business includes manufacturing automotive components and other products.
• The company held an estimated market share of 9% of the overall domestic market for solar tracking and mounting products used in solar trackers, as per CRISIL Report.

• The demerger of three verticals will separate biopharma and profitable spirits from bio-based specialties and performance chemicals will be the catalyst for the company.
• The expansion in potable spirits, set for completion by March 2025, is expected to drive growth in this segment, alongside anticipated recovery in the core chemical business.
• The Potable spirits segment accounted for 45% of revenue but contributed 58% of EBITDA margins, benefiting from backward integration that drives higher margins.

• Learn about India’s worst accounting fraud, including Yes Bank, Satyam Computer, Kingfisher and others in this report.
• Misappropriation features prominently in these scandals, in addition to fraudulent reporting and corporate governance failure.
• Siphoning of funds from bank loans, in particular, has been a common feature of Indian corporate malfeasance.

• Crisil Ltd (CRISIL IN) and India Rating Downgrade AGS Transact Technologies (AGSTRA IN) to ‘D’ from “A/Stable’ post a default
• Rating agencies exist to anticipate events such as defaults and not react after being informed of a default
• Rating agencies ignored poor fundamentals of AGS Transact Technologies (AGSTRA IN) in 2QFY2025 results which clearly and publicly revealed deteriorating cash flows and a high-risk financial strategy

• Sell-Off continues with all four trading days this week registering losses.
• 1M Implied vols firmed on the sharp move lower but remain capped at 14 for the time being.
• March seasonality positive for Nifty which might help reverse the trend in the second half of the month.

• Our latest insight on the NIFTY Index (NIFTY INDEX) recognized the possibility of obstacles against a rally from the index’s lows.
• The index has fallen for another 2 weeks from there, now it is very oversold and a relief rally could begin this week or the next.
• Profit targets for this relief rally are in the 23100 area, but unfortunately the forecast is maximum 3 weeks up, not really a bullish pattern…

• Tractor volume continued to be strong in Feb’25.Favorable reservoir level,strong sowing for the Rabi season and government support are expected to drive good demand for tractors in the medium term.
• We summarize the sales volume published by listed players Mahindra & Mahindra (MM IN) and Escorts Kubota Limited (ESCORTS IN) in February 2025.
• Positive management commentary augurs well for uptick in tractor OEM stocks and related auto ancillary companies like GNA Axles Ltd (GNA IN) in medium term.

• Production up 3.18% YoY and imports up 19.42% in 2024  
• Production-Consumption gap 526,000 tons  
• Commerce Minister dodges floor price plea by smallholders

• Onesource Specialty Pharma (ONESOURC IN) has transitioned from a niche player to a multi-modality CDMO powerhouse through strategic restructuring, rapid revenue expansion, and aggressive capacity building.
• With a projected INR1,400 crore revenue in FY25 (INR173 crore in FY24) and shifting from MSA to CSA contracts, OS is stabilizing its revenue model, tapping into high-growth segments.
• By leveraging a first-mover advantage in GLP-1, regulatory strength, and a $100 million capex plan, OS is positioning itself to become a billion-dollar global CDMO leader within the next 3-4Yrs.

• Cantabil Retail India (CANT IN) is one of the few vertically integrated garment players and has a store count of 576 and retail space of 7.4 lakh sq.ft.
• The company has done well over the last five years to improve its financial position; it has grown its topline at a healthy rate while margins have improved significantly.
• But having said that, we have concerns with elevated inventory levels that have remained high historically for a garment player. Moreover, some capital advances and RPT should also be considered.

• Jio Financial Services (JIOFIN IN) has launched a robust digital ecosystem with its flagship JioFinance app, enhancing its tech-driven financial service offerings.
• The digital-first strategy minimizes legacy constraints, enabling personalized financial solutions that significantly boost efficiency and competitive advantage.
• This evolution redefines traditional banking, positioning JFSL as a versatile, technology-led powerhouse for sustainable growth in India’s financial sector.

• Premier Energies raised around US$337m after pricing the deal at the top end of the range in Sep 2024. Its IPO linked lockup is set to expire soon.
• Premier Energies is a manufacturer of solar photovoltaic (PV) cells, and solar modules. It also executes engineering, procurement, and construction (EPC) projects and provides follow-up operation and maintenance (O&M) services
• In this note, we will talk about the lockup dynamics and possible placement.

• UltraTech Cement, part of the Aditya Birla Group, is entering the 80,000+ crore wires & cables market with INR 1,800 crore investment, targeting a December 2026 plant launch in Gujarat.
• The sector is highly fragmented, with no dominant player exceeding 20% market share, creating an opportunity for UltraTech to disrupt with its financial strength, backward integration, and superior product quality.
• This move positions UltraTech as a diversified building materials leader, leveraging synergies with Hindalco to offer cost-efficient, high-quality electrical solutions, reshaping competition in the industry.

• Quick Commerce offers infinite TAM with rapid metro adoption, but requires endless investment in faster delivery times to remain competitive.
• Delivery partners bear the operational burden, working long hours for modest pay while tech stacks across competitors remain largely similar.
• Despite investor excitement, QC margins remain elusive due to high competition, homogeneous offerings, and limited pricing power compared to food delivery.

• The headline Indian mid cap indices are still expensive, despite a sharp decline since late September. However, when adjusted for growth, many fundamentally attractive mid-caps are cheap.
• We screen mid-caps with PEG<1.3x, consensus Buy recommendations and increasing consensus EPS estimates over the past six months. We choose well-covered stocks so that the consensus estimates are meaningful.
• Our basket of 20 contains six financial stocks, five materials, four industrials and three consumer discretionaries. Many pertain to the themes of renewable energy, data centers, healthcare, tourism and infrastructure.

• We compile our selection of small-cap companies based on our desired characteristics: insider buying, value, near term growth triggers and margin of safety.
• Out top picks are Sarla Performance Fibers Ltd (SRPL IN) , Quess Corp Ltd (QUESS IN) , and GNA Axles Ltd (GNA IN)
• Given the steep correction in small and mid-cap Indian stocks, all the mentioned companies have seen active insider buying in recent weeks.

• SeedWorks International Ltd (1441147D IN)  (SIL) is looking to raise about US$115m in its upcoming India IPO. The bookrunners for the deal are Equirus, DAM, SBI.
• SIL is a seed research and development organization engaged in the research, production, and marketing of hybrid seeds as well as open-pollinated variety (OPV) seeds for rice, wheat, and mustard.
• According to F&S Report, the company was the second fastest-growing Indian seed company in terms of revenues between FY21-24, with a CAGR of 11.98%.