India

• We challenge Mahindra & Mahindra (MM IN) ‘s narrative of strong demand and booking pipeline (140k+ open bookings, excl Scorpio N as of Q1 FY23) 
• There is a possibility of a monthly booking rate of 10.3k for XUV700 and 5K per month for Thar being overstated. 
• With increasing competition (MSIL + Toyota), cancellations will increase leading to even lower waiting periods and a reduced booking pipeline. 

• Sula Vineyards (1332009D IN) is looking to raise about US$175m in its upcoming India IPO. 
• Sula Vineyards (SV) distributes wines under a bouquet of brands. In addition to its flagship brand “Sula,” popular brands include “RASA,” “Dindori”, “The source,” “Satori”, “Madera” & “Dia”. 
• The firm has managed to stay profitable with margin expansion despite COVID-19. However, wine appears to remain a very small part of the Indian alcohol consumption market. 

• This is our first report on Mill City Ventures III and we look to provide a detailed account of the various industries that the company operates in and the key macro-economic factors.
• Given its current size, Mill City Ventures III is exempt from many of the regulatory restrictions that apply to other traditional lenders or institutional rivals.
• Overall, we believe that Mill City Ventures III has phenomenal growth prospects and is an excellent investment prospect.

• EbixCash (EC) is looking to raise around US$800m in its upcoming India IPO. The deal will be run by Motilal, Equirus, ISec, SBI Caps and Yes Securities.
• EC is a provider of digital products and services in the B2C, B2B and financial technology arena. Its has four primary business segments: Payment solutions, travel, financial technologies and BPO.
• In this note, we talk about the not-so-positive aspects of the deal

• This is our first report on F5 Inc, a well-known provider of multi-cloud security and application delivery that helps businesses connect to their customers.
• In the quarter, F5 saw a good demand as customers secured, scaled, and added their applications as demand for security fuel sales.
• Service providers have driven recent demand as secure 4G cores and customers scale and start to move 5G cores in production.

• This is our first report on Five9, a leading provider of cloud software for contact centers.
• The company’s core Virtual Contact Center (VCC) cloud platform has been a major revenue driver for them.
• Among key updates, Five9, along with Kyndryl, announced a partnership to offer its customers a cloud-enabled, personalized contact center experience.

• BYJU’S (1391510D IN), the world’s most valued online learning company, shocked the street with reported losses of USD576 mn on revenues of USD286 mn for the year ending March2021.
• Post-Pandemic return to school has reset growth trajectory for India’s blooming EdTech sector that thrived during COVID times attracting multi-billion dollar valuations.
• Industry wide layoffs and few shut downs have raised concerns on growth prospects for edTech players and sustainability of their boom period valuations. 

• Mankind Pharma Ltd (6596876Z IN) is looking to raise about US$1bn in its upcoming India IPO. The deal will be run by Kotak, Axis Capital, IIFL Securities, Jefferies and JPM. 
• Mankind Pharma (MK) is a pharmaceutical company engaged in developing, manufacturing and marketing a range of pharmaceutical formulations across various therapeutic areas, as well as several consumer healthcare products. 
• It is mainly focused on the domestic market. 18 of its brands were among the 300 highest selling brands in the Indian Pharmaceutical Market (IPM), according to IQVIA.

• Trimble Inc is a well-known player in the agri-tech space.
• The company has gone through its fair share of corporate restructuring with a series of acquisitions and divestments.
• On execution, Trimble continues to simplify its portfolio through actions like decreasing the number of product offerings and part numbers.

• EbixCash (EC) is looking to raise around US$800m in its upcoming India IPO. The deal will be run by Motilal, Equirus, ISec, SBI Caps and Yes Securities.
• EC is a provider of digital products and services in the B2C, B2B and financial technology arena. Its has four primary business segments: Payment solutions, travel, financial technologies and BPO.
• In this note, we talk about the positive aspects of the deal.

• Ajanta Pharma (AJP IN) has a well-diversified business model in terms of markets and therapies. The company’s largest revenue contributing segment, branded generics is seeing healthy double-digit revenue growth.
• Ajanta focuses on limited competition product in US. Going forward, the US business will see accelerated growth, driven by new launches. Ajanta plans to file 10–12 ANDAs during FY23.
• Ajanta has taken 1% price increase across all its market, which should drive margin improvement in coming quarters. The company has guided for EBITDA margin of 26–27% for FY23.

• Jubilant Foodworks (JUBI IN) is India’s largest food service company. In hindsight, CEO’s exit in March 2022 under a high inflationary environment was just “NOISE”.
• Industry drivers are favourable, JUBI’s renewed focus on growth, additional brands and a new CEO, all put JUBI back on track to deliver robust growth. 
• Currently trading at 68.5x NTM, JUBI is available at a 22% discount compared to it’s 3Y mean, considering the growth prospects discussed below, this discount is attractive.

• PayMate India Ltd (935383Z IN) is looking to raise approximately US$193m in its upcoming India IPO.  
• PayMate India is a business to business (B2B) payments and services provider that digitizes, automates and streamlines B2B payments in supply chains. 
• The firm remains unprofitable even on a gross profit level. Its cash burn also appears unsustainable as it has been financing its operations through equity raises. 

• Blue Jet Healthcare Ltd (BJHC IN) is looking to raise about US$300m in its upcoming India IPO. The deal will be run by Kotak, ICICI Securities and JP Morgan. 
• Blue Jet Healthcare (BJH) is a specialty pharmaceutical and healthcare ingredient and intermediate company, offering niche products targeted toward innovator pharmaceutical companies and multinational generic pharmaceutical companies. 
• It operates via a contract development and manufacturing organization (CDMO) model with specialized chemistry capabilities in contrast media intermediates and high-intensity sweeteners, including saccharin and its salts. 

• Biocon Ltd (BIOS IN) divested 5.4% stake in Syngene International Ltd (SYNG IN) and raised INR12.2B. The proceed will be used to finance Biocon’s acquisition of biologics business of Viatris.
• Biocon is still working on the equity-debt split of Viatris deal, and a final decision on the same will be announced soon.
• The strategic deal with Viatris will transform Biocon Biologics into a leading vertically integrated global biologics company, with one of the broadest and deepest commercialized biosimilars portfolio in the industry.

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.

• AAC Technologies Holdings
• Vedanta Resources

• Less than halfway through the review period, we see 6 stocks moving from MidCap to LargeCap and vice versa, and 7 stocks moving from SmallCap to MidCap and vice versa.
• There are a bunch of stocks that are close to the cutoff ranks and there will be more change as we move deeper into the review period.
• Over the last 6months, stocks expected to migrate upward have outperformed stocks that are expected to migrate downward. Given the large divergence, there will be a pullback at some point.

• Lupin Ltd (LPC IN) reported muted Q1FY23 performance, with revenue declining 15% y/y and 7% q/q to INR36 billion. Revenue from North America is down 24% y/y and 29% q/q.
• Price erosion in the U.S. coupled with shelf stock adjustment on the higher trade inventory are creating a dent to the quarterly numbers.
• We would like to see a sustainable revival in the company’s North America revenue performance and margin improvement, before taking any position in the stock.

• Matrimony.com (MATRIM IN) is a leading player with the highest market share in the Indian matchmaking market. 
• A close examination of the marketing expenses and subscriber additions reveals poor quality growth.
• Employee remuneration is perplexing and so is the decision that leads to a reduction in PP&E.

• Dr. Reddy’s Laboratories (DRRD IN) reported Q1FY23 results, with revenue growing 6% and 108% y/y, mainly driven by a 26% y/y growth in India business.
• Despite price erosion and increasing competition in some of the key products, North America revenue grew 2% y/y, driven by launch of new products and favorable forex rates.
• Bottom line got benefitted from one-off items including settlement income and non-core brand divestment proceeds. Net profit surged 108% y/y.

• Nvidia has been among the priciest semiconductor stocks for a while now.
• The company matched market expectations and delivered an earnings beat though the stock is still very expensive.
• We provide the stock of Nvidia with a ‘Hold’ rating with a revision in the target price.

• Throughout the second quarter, Lululemon’s momentum remained strong.
• The company’s total revenue accelerated by 29% compared to last year and 28% on a 3-year CAGR basis, helping the company surpass Wall Street expectations.
• It has been benefitting heavily from this launch as hiking has become increasingly popular among visitors since the pandemic.

• Marathon’s previous quarter was one of its best financial performances since transitioning to an independent E&P company.
• Despite these factors, the company delivered an all-around beat and continues to reward its shareholders with capital returns.
• In this report, we have carried out a fundamental analysis of the historical financial statements of the company.

• Gap saw a decline in its overall revenues in the past quarter but its results were still above analyst expectations.
• The company’s overall revenues of $3.86 billion were down 8% from the prior year or 7% when measured in constant currency but it did deliver an earnings beat.
• Further, they anticipate the near-term downturn in demand at Gap outlets, which they attribute to the persistent backlash from lower-income consumers.

• Ross Stores had quite a disappointing quarter where its revenues were well below Wall Street expectations.
• Comparable store sales were low in comparison to a strong increase in the second quarter of the last year.
• We provide the stock of Ross Stores with a ‘Hold’ rating with a revision in the market price.

• Global Health (Medanta) (GH IN) is looking to raise approximately US$270m in its upcoming India IPO.
• Global Health (GH) is a hospital network that operates under the Medanta brand. The firm currently has five hospitals in operation and one more planned for development.
• The company has managed to remain profitable throughout COVID-19 and even experienced margin expansion in FY22. However, its post-COVID growth might be short-lived given stiff competition amongst peers.

• InterGlobe Aviation Ltd (INDIGO IN)’s co-founder Rakesh Gangwal aims to raise around US$250m via selling 2.8% of the company.
• He had earlier stated his intention to pare down his stake after a long drawn, and very public battle, with the other co-founder Rahul Bhatia. 
• In this note, we will talk about the placement and run the deal through our ECM framework.

• Workday delivered another all-around beat, outperforming market expectations with respect to its operating indicators, highlighting the ongoing significance of digital transformation for finance and HR.
• Along with the significant expansion of their core HCM and financial apps, Q2 saw remarkable momentum throughout their broader spectrum of solutions.
• Customers create apps with Extend customized for their specific use cases, potentially eliminating the need for additional specialized development tools.

• Ulta Beauty performed well in this quarter and delivered an all-around beat.
• Based on point-of-sale statistics from the NPD Group, all key categories for the quarter exceeded its expectations, and they grew their market share in prestige beauty compared to the previous year.
• Haircare, their second-largest category, experienced double-digit growth for another quarter due to newness and excellent participation in their semi-annual Gorgeous Hair Event.

• Zydus Lifesciences Ltd (ZYDUSLIF IN) reported stable Q1FY23 results, with its U.S. business witnessing healthy rebound supported by volume share gain in base portfolio and new product launches.
• Excluding COVID-related products, generics portfolio, and divested products, India branded prescription business grew 9% y/y. India consumer wellness business rebounded with 18% y/y revenue growth.
• Zydus aims to grow across all our key businesses in FY23. Through cost control and improved efficiencies across the value chain, Zydus aspires to achieve 20%+ EBITDA margin for FY23.