In today’s briefing:
- AMFI Stock Reclassification Preview (Jun 2025): Active Flows Lead to Passive Flows
- Relative Value Roundup: Opportunities and Performance Recap of Pair Trades in Asia-Pacific
- RPSG Ventures: BPO Business Doing Well | Holding Company Discount at 82%
- Event Driven: ABFRL~ Value Unlocking Through Strategic Demerger
- Edelweiss: Last 3Y Have Seen Tremendous Shift, Next 2Y Should Be Even Better
- HDB Financial Services: Float Cap Expansion Sets Stage for Global Index Inclusion
- Nesco: Weak Q4FY25 Due to Underwhelming Performance in BEC
- Nuvama: FY25 Ends To Be a Breakout Year
- RPPL: Strong Q4FY25 | Next 2Y Look Promising
AMFI Stock Reclassification Preview (Jun 2025): Active Flows Lead to Passive Flows
- We forecast 10 stocks moving from MidCap to LargeCap, 11 stocks moving from LargeCap to MidCap, 10 stocks from SmallCap to MidCap, and 13 stocks from MidCap to SmallCap.
- From the new listings, 1 stock is expected to be added to Large cap, 2 stocks are expected to be added to Mid Cap, and multiple stocks to Small Cap.
- There are multiple stocks among the AMFI changes that will be changes for global indices, NIFTY Index, NSE Nifty Next 50 Index and/or Nifty Midcap 150 Index in September.
Relative Value Roundup: Opportunities and Performance Recap of Pair Trades in Asia-Pacific
- Context: This Insight follows up on previously highlighted relative value opportunities, using a statistical methodology based on mean-reversion to identify opportunities in paired securities.
- Highlight: Three pair trade opportunities across three markets and two sectors persist.
- Why read: Statistical analysis offers a unique perspective on relative value. Gain insights into actionable statistical pair trade opportunities and monitor performance of previously highlighted pairs.
RPSG Ventures: BPO Business Doing Well | Holding Company Discount at 82%
- RPSG Ventures reported a strong Q4FY25 led by the BPO business that has been growing well. BPO revenues grew 3%+ QoQ and 30%+ YoY. EBIT margin has sustained at 11%+.
- The FMCG business after posting INR 550cr+ annualized revenue run-rate for the past few quarters saw a dip in Q4FY25 with annualized revenue at INR 520cr.
- The Sports segment reported similar revenue YoY at INR 135cr+, led by part revenue recognition from IPL 2025 that began at end of March, similar to that in 2024.
Event Driven: ABFRL~ Value Unlocking Through Strategic Demerger
- Aditya Birla Fashion and Retail Ltd (ABFRL IN) demerged its business into two focussed entities, ABLBL(Stable Business) and ABFRL(High growth Business).
- The separation aligns capital with business maturity isolating cash-generating lifestyle brands from high-growth, capital-hungry verticals like ethnic, luxury, and digital-first.
- The two entities are targeting a combined INR 30,000 Cr in revenue and 3x cash profit by FY30 through unlocking sharper execution, better capital efficiency, and distinct investor appeal.
Edelweiss: Last 3Y Have Seen Tremendous Shift, Next 2Y Should Be Even Better
- Edelweiss has executed well over the past three years led by its pivot towards fee-based model. Its asset management businesses have grown rapidly, contributing significantly to the fee income.
- The credit businesses are still struggling in terms of growth, but they have been pivoted successfully towards the co-lending model and the next couple of years could see significant growth.
- The insurance businesses are also on track to breakeven over the next couple of years in line with the management’s prior guidance.
HDB Financial Services: Float Cap Expansion Sets Stage for Global Index Inclusion
- The free float is estimated to gradually increase from ~15% up to 30% over six months due to the lock-up expiries of Anchor Investors and pre-IPO Shareholders.
- HDB Financial Services is forecasted to be added to Global All-World in December 2025 following the lock-up expiry of the Anchor Investors.
- HDB Financial Services has a chance of inclusion in Global Standard in February 2026 following the lock-up expiry of pre-IPO shareholders which can increase free float up to 30%.
Nesco: Weak Q4FY25 Due to Underwhelming Performance in BEC
- Nesco reported a weak Q4FY25 led by weak performance in the exhibition segment (“BEC”). Revenue in the BEC segment was down -25% YoY and -30% QoQ.
- On the other hand, the IT Parks segment performed strong. IT Parks segment’s Q4FY25 revenue grew 2% QoQ and 15%+ YoY, led by improved occupancy and rise in rental rates.
- Typically, the Foods business is linked to the BEC business. However, in Q4FY25, despite weak BEC revenues, the Foods business did well led by the catering business.
Nuvama: FY25 Ends To Be a Breakout Year
- Nuvama Wealth Management (“Nuvama”) has consistently outperformed expectations throughout FY25 and Q4FY25 was no exception. In particular, the Asset Services sub-segment has been the outlier.
- The Wealth Management and Asset Management segments continued to perform steadily providing resilience to the platform, despite cyclicality. They saw net inflows despite challenging market conditions during 2HFY25.
- Due to market volatility, certain pockets of the investment bank and institutional equities sub-segments saw somewhat muted performance, however, Nuvama fared much better relative to its peers.
RPPL: Strong Q4FY25 | Next 2Y Look Promising
- Rajshree Polypack (“RPPL”) reported excellent Q4FY25 led by strong growth in injection molding and exports revenue. Exports quarterly revenue grew to INR 20cr vs INR 10cr+ run-rate earlier.
- Injection molding segment has grown well. It clocked INR 15cr+ in revenue in Q4FY25 vs INR 8cr YoY. For FY25, revenue from injection molding more than doubled to INR 40cr+.
- Led by growing mix of high-value segments like injection molding, barrier packaging and exports in Q4FY25, EBITDA margin improved to 13.7% vs 13.5% YoY and 12.5% QoQ.
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