In today’s briefing:
- SBI US$3bn QIP – No Surprises – Not the World’s Best Kept Secret
- The Beat Ideas: Jubilant Pharmova – Turning Capex Into Catalysts for Long-Term Value
- TCS – Fighting on All Fronts: Gen AI, Competition & Macro Uncertainty. Underperformance Ahead
- HDFC Bank (HDFCB IN) Outlook: Any Rally From Here May End Quickly
- Zee Entertainment: A Forensic Perspective
- Oswal Pumps Ltd- IPO to the Rescue
- ICICI Pru AMC Pre-IPO Tearsheet
- The Beat Ideas: P N Gadgil Jewellers- Betting Big on High-Margin Lightweight Jewellery
SBI US$3bn QIP – No Surprises – Not the World’s Best Kept Secret
- State Bank Of India (SBIN IN) plans to raise around US$3bn via a QIP. The deal is very well flagged and we wrote on it last week.
- Although the stock has been running up a bit going into the deal and the previous deal didn’t do well.
- In this note, we will talk about the placement and run the deal through our ECM framework.
The Beat Ideas: Jubilant Pharmova – Turning Capex Into Catalysts for Long-Term Value
- Jubilant Pharmova is investing over USD 285 million to expand its PET radiopharmacy sites, CDMO Sterile Injectables, and CRDMO capacity (FTEs from 1,000 to 4,000 by FY27).
- These segments, contributing over 80% of FY25 EBITDA, are positioned for faster growth and margin expansion, with Line 3 in Spokane expected to reach peak utilization in 3 years.
- A pivot towards higher-margin businesses with targeted RoCE above 20% enhances confidence in achieving Vision 2030 goals of doubling revenue and reaching 23–25% EBITDA margins.
TCS – Fighting on All Fronts: Gen AI, Competition & Macro Uncertainty. Underperformance Ahead
- Broad-based Weakness:Tata Consultancy Svcs (TCS IN) ‘s revenue declined 3.1% YoY in CC; domestic business fell sharply due to BSNL, while international demand remained soft across key verticals.
- GenAI Pivot Amid Margin Pressure: TCS is shifting from GenAI pilots to scaled deployments, investing heavily in AI skilling, while margins face pressure from underutilization and delayed deal ramps.
- Outlook Cautious Despite TCV Growth: TCV rose 13.2% YoY to $9.4 Bn, but mega deals are missing; execution delays and macro concerns cloud near-term visibility.
HDFC Bank (HDFCB IN) Outlook: Any Rally From Here May End Quickly
- HDFC Bank (HDFCB IN) has been rallying strongly since early January 2025, a rally we predicted back then. After 2 weeks down, the stock this week is rising.
- However, according to our model the current uptrend pattern does not lead to long-lasting rallies, but rather to new, short-term corrections.
- The time horizon for this rally is 1-2 weeks, when this trend pattern is encountered, so we could expect the stock to rally briefly and then pull back again.
Zee Entertainment: A Forensic Perspective
- Shareholders recently rejected Zee’s promoter-led capital infusion, limiting the founding family’s stake increase and influence.
- The failed fundraise underscores persistent questions about financial transparency and management’s past conduct. This decision further impacts market perception and investor confidence.
- This insight covers the whole story from the beginning of the allegations to the current status of the allegations and fundraising.
Oswal Pumps Ltd- IPO to the Rescue
- Oswal Pumps (1019841D IN) came out with an IPO in June to raise fresh equity of INR 8.9 bn and offer for sale of 8.1 mn shares.
- They are among the few fully integrated Turnkey Solar Pumping System providers in India, manufacturing solar pumps, modules, controllers, and offering complete installation services for agricultural applications.
- Forensic takeaways include misstatement of cash flow, absence of details on the order book, possible margin and growth concerns and certain violations of regulations and regular delay in filing dues.
ICICI Pru AMC Pre-IPO Tearsheet
- ICICI Prudential AMC (570643Z IN) (IPru AMC) is looking to raise about US$1bn in its upcoming India IPO. The deal will be run by a consortium of banks.
- IPru AMC is an asset management company involved in managing mutual funds, providing portfolio management services, managing alternative investment funds, and providing advisory services to offshore clients.
- The IPO is entirely an offer for sale by one of the promoters, Prudential Corporation Holdings Limited.
The Beat Ideas: P N Gadgil Jewellers- Betting Big on High-Margin Lightweight Jewellery
- P N Gadgil Jewellers (1742652D IN) is a 190-year-old legacy brand evolving into a modern retail powerhouse with 55 stores, innovative formats, and nationwide expansion plans.
- Key growth drivers include 20–25 planned new stores in FY26, a 41.6% YoY jump in studded jewellery share, and a complete exit from INR 700 crore bullion sales.
- With 5-year PAT CAGR of 52% and a PEG ratio of 0.71, PNGJL stands out among peers as a high-growth, efficiently valued player in organized jewellery retail.
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