Daily Brief India: Onesource Specialty Pharma, Punjab National Bank, HealthCare Global Enterprises, HDFC Limited, PTC India Financial Services, Shivalik Rasayan, Tata Capital Limited, IDBI Bank Ltd, Tata Motors ADR and more

• OneSource Specialty Pharma has approved a Composite Scheme of Arrangement to acquire Steriscience’s EuropeanCDMO and Brooks Steriscience’s Indian anti-infective assets.
• The transaction adds approximately $107 million in projected FY27 revenue, significantly diversifying the portfolio, reducing single-site risk, raising the consolidated FY28 revenue outlook to over $500 million.
• While the acquisition multiples appear steep for subscale assets, if management successfully delivers on ambitious growth targets, the transaction could position OneSource among the most competitive players in CDMO landspace.

• Punjab National Bank (PNB) is demonstrating a significant financial turnaround, marked by robust growth in net income and revenue over the past three years. This is supported by a strategic focus on improving asset quality and diversifying its lending portfolio.
• As the second-largest public sector bank in India, PNB benefits from extensive government backing and a vast branch network, providing a stable, low-cost deposit base. The bank is leveraging this position to push for digital transformation and expand into high-growth sectors like renewable energy and infrastructure.
• Key challenges remain, including managing historical non-performing assets (NPAs), navigating intense competition from private sector banks and fintech companies, and mitigating cybersecurity risks. Sustained execution of its strategic initiatives will be crucial for long-term value creation.

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• In line with our thesis, HCG has been scaling up well led by rapid growth in emerging centers. Established centers are also growing at a steady pace.  
• With scale, profitability is normalizing. Over the next two years, we project the EBITDA to grow at 25% CAGR led by margin expansion and volume growth.
• Utilization on like to like basis came in at 76% in Q1FY26 vs 69% in FY25. ARPOB has been steady at around INR 45000.

• On July 1, 2023, HDFC Limited, India’s largest mortgage lender, merged with HDFC Bank, the country’s largest private sector bank, in a historic $40 billion deal. This primer analyzes the pre-merger entity, HDFC Limited, and its integration into HDFC Bank.
• The merger creates a financial services behemoth with a combined asset base of around ₹18 trillion, positioning it to capitalize on India’s burgeoning housing finance market. The home loan business is a central pillar of the merged entity’s growth strategy.
• Significant cross-selling opportunities exist, as a large portion of HDFC Limited‘s customers did not bank with HDFC Bank, and vice versa. The integration aims to leverage HDFC Bank’s extensive distribution network and lower cost of funds to enhance the mortgage business.

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• PTC India Financial Services (PTCIF IN) faced a mass exit of Independent directors recently.
• The IDs flagged compromising independence and constrained in upholding the highest standards of corporate governance as their reasons.
• This once again brings back the governance issues under limelight, a situation the company is already familiar with.

• Shivalik Rasayan, once focused on agrochemicals, has entered pharmaceuticals by acquiring Medicamen Biotech and securing USFDA approval for its new API plant at Dahej-II in 2024.
• The company is transforming into a diversified chemicals and pharma player. Investments in R&D, larger agrochemical capacity, and regulated pharma access open pathways for higher-margin and sustainable growth.
• Despite past issues of underutilized plants, high costs, and delays, recent approvals and new facilities position Shivalik Rasayan for steadier performance and long-term growth if execution remains strong.

• Our earlier insight Tata Capital IPO – Jinxed by Tata Motors Finance describes how post merger with Tata Motor finance,  the finance metrics of the company changed.
• In this insight we discuss about updates from Q1FY26 results and key observations on the same.
• This also discusses about the IPO valuation, peer comparison and our view.

• IDBI Bank has demonstrated a significant financial turnaround, marked by robust profit growth and a substantial reduction in non-performing assets (NPAs). This improvement has been heavily supported by capital infusions from the Government of India and Life Insurance Corporation of India (LIC).
• The impending privatization, with the government and LIC set to divest a 60.72% stake, stands as the most critical forward-looking catalyst. This strategic sale is expected to enhance operational efficiency, improve governance, and unlock value for shareholders.
• Despite the positive financial trajectory, the bank’s stock has underperformed its peers. Concerns remain regarding the sustainability of performance post-privatization and corporate governance issues, highlighted by disproportionate increases in executive remuneration.

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• In today’s Morning Views publication we comment on developments of the following high yield issuers: Tata Motors, JSW Steel
• UST yields were little changed on Friday, following the release of robust August consumption data in the US, while the core PCE price index was broadly stable. The yield on the 2Y UST declined 1 bp to 3.64%, while the yield on the 10Y UST was stable at 4.18%. Equities recovered from a three-day slide. The S&P 500 rose 0.6% to 6,644, while the Nasdaq climbed 0.4% to 22,484.
• In the US, August personal spending accelerated slightly to 0.6% y-o-y (0.5% e / 0.5% p), while personal income came in marginally above estimates at 0.4% (0.3% e / 0.4% p).