In today’s briefing:
- NIFTY Bank Index: Impact of the Forecast Methodology Change
- Sarda Energy (SARDA IN): Power-Led Transition with Re-Rating Potential
- HDFC Bank Tactical View: Inflection Point or Just a Pause?
- Globus Spirits: Consumer Business Growth & Manufacturing Stability
- HDFC Bank (“HDFCB”): Steady Performance in Line with Expectation
- A Deep Dive into SEBI’s IndusInd Bank Insider Trading Order
- Synergy Green Industries Q4 FY25 Update: Capacity Expansion Fuels Strong FY25
- 2025 High Conviction Update: Aster DM(ASTERDM IN)-Occupancy to Recover; Margin Improvement Continues
- Bosch Limited: Shifting Gears Toward Intelligent and Sustainable Mobility
- ICICI Lombard (ICICIGI IN) Vs. SBI Life (SBILIFE IN): A Statistical Pair Trade Opportunity
NIFTY Bank Index: Impact of the Forecast Methodology Change
- To reduce index concentration and the risk of market volatility and market manipulation, SEBI has recommended changes to the eligibility criteria for derivatives on non-benchmark indices.
- The recommended changes will result in two inclusions to the NSE Nifty Bank Index (NSEBANK INDEX) along with large capping changes.
- The inclusions and capping changes will result in an estimated one-way turnover of 17.05% and in a round-trip trade of INR 76.2bn (US$893m) in September.
Sarda Energy (SARDA IN): Power-Led Transition with Re-Rating Potential
- Sarda’s near-term growth will be driven by the full-year contribution from SKS Power, boosting earnings visibility.
- The business mix is shifting structurally from steel to power, which now contributes over 60% of EBIT. Low leverage at <1x EV/EBITDA is a positive.
- The recent weakness in spot power prices is seen as temporary; at 15x FY27 EV/EBITDA, the stock offers strong upside.
HDFC Bank Tactical View: Inflection Point or Just a Pause?
- HDFC Bank (HDFCB IN) is navigating a mix of positive growth indicators and emerging regulatory challenges but average 12-month target is ₹2,194, with estimates ranging from ₹1,627 to ₹2,793.
- Consensus rating: predominantly “Buy” from major brokerages, including ICICI Securities and Motilal Oswal, citing strong loan growth and stable asset quality.
- The stock’s strong fundamentals and growth outlook remain intact, but momentum has stalled in recent weeks following the sharp rally we correctly anticipated from January 14, 2025.
Globus Spirits: Consumer Business Growth & Manufacturing Stability
- Globus Spirits continues its strategic pivot towards high-margin consumer business, with P&A revenue up 186% in FY25 and Regular & Others up 17%.
- The manufacturing segment’s margins are stabilising due to favourable government ethanol policies and raw material availability, enhancing overall profitability.
- This shift, coupled with significant investments in the key Uttar Pradesh market and near completion of major capex, positions the company for continued profitable growth, reinforcing a positive view.
HDFC Bank (“HDFCB”): Steady Performance in Line with Expectation
- In Q4FY25, deposits grew strong at 15.8% YoY. QoQ, average deposits grew by 3.1%. Time deposits led the growth while growth in CASA deposits was relatively muted.
- In line with its stated strategy, HDFCB’s loan book has been growing slower than that of deposits to bring down the credit-deposit ratio. Average AUM grew 7.3% YoY in Q4FY25.
- Credit-Deposit ratio is now at 96% vs 110% at merger. Going forward, the adjustment in credit-deposit ratio won’t be as steep, thus FY26 is expected to be a normalization year.
A Deep Dive into SEBI’s IndusInd Bank Insider Trading Order
- SEBI’s order against IndusInd Bank’s ex-CEO and others reveals a 15-month deliberate delay in disclosing critical accounting discrepancies.
- This exposes severe corporate governance failures, eroding investor trust due to alleged insider trading.
- SEBI fined the company with the INR 20Crs. to IndusInd officials as well as also barred the senior officials from dealing in security market.
Synergy Green Industries Q4 FY25 Update: Capacity Expansion Fuels Strong FY25
- Synergy Green reported robust FY25 performance with 11% revenue growth and 224bps EBITDA margin expansion, driven by direct exports and gearboxes.
- Strong execution and margin improvement underscore operational efficiency, while a significant INR 187 crore capex addresses capacity constraints, crucial for future growth.
- Performance validates the business model, but the delayed capex execution means FY26 growth will be heavily back-ended, requiring close monitoring of ramp-up.
2025 High Conviction Update: Aster DM(ASTERDM IN)-Occupancy to Recover; Margin Improvement Continues
- Aster DM Healthcare Ltd (ASTERDM IN) reported 4% revenue decline in Kerala due to festivities, lower international patient, and leadership transition. Ramadan impact caused 2.5–3.0% of the revenue hit.
- Going ahead, the company is eyeing for atleast mid-teens growth from Kerala cluster, with 7–8% will be with volumes and balance 7–8% will come from the ARPOB.
- Aster’s base business is on a stable growth path. Margin levers are intact. With QCIL merger synergies, the company aims for EBITDA margin of 23–24% in 3–4 years.
Bosch Limited: Shifting Gears Toward Intelligent and Sustainable Mobility
- Bosch Ltd (BOS IN) ‘s multiple technology innovations in mobility, consumer power goods and energy & building technology will drive future growth.
- FY25 PBT grew by 17% YoY driven by increased sales in the off-highway segment and mobility aftermarket business.
- Deserves a premium valuation for its commitment to innovation, digitalization, and sustainability. Trades at median historical valuation of 40x P/E on FY27e EPS.
ICICI Lombard (ICICIGI IN) Vs. SBI Life (SBILIFE IN): A Statistical Pair Trade Opportunity
- The ICICI Lombard (ICICIGI IN) vs. SBI Life (SBILIFE 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 discusses trade setup, statistical properties, factor exposure, and risk management strategies.
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