India: Axis Bank Ltd, Avenue Supermarts Ltd, UPL Ltd, INR 5Y, VRL Logistics Ltd and more

• Toxity in Axis Bank’s work culture confirmed by Ravi Narayanan – Group Executive, retail liabilities and branches
• Senior executive at town hall meeting allegedly stated “employees should fight, abuse and complain amongst them [sic] for business, this is the attitude what [sic] I like”
• Strategy of abuse so far has failed but with board’s endorsement, more of the same is being implemented which may have adverse impact on performance 

Consensus (continues to) believe that DMart is a linear and secular growth story. We disagree. This analyst’s >20 years Consumer experience suggests that in India, nuances matter more. We disagree with consensus’ over-enthusiasm of BAAP. SELL. Watch-out for DMart (and modern retail) potentially getting disrupted like how India skipped wireline penetration and jumped directly to wireless.

• UPL, incorporated in 1969, is a global player in the agro-chemicals industry with strong presence in off-patent market of US and Europe
• UPL is a direct proxy for increase in demand for food crops due to rising commodity prices, high population growth and high demand for bio-fuel
• The recent acquisition of Arysta, will further increase UPL’s global scale and make it the 5th largest agrochemical player globally

• With rates in India vulnerable to a further correction in the US, I recommend paying India 5y vs receiving Mexico 5y rate in a beta-neutral ratio.
• Real rates in India are the lowest among major emerging countries, which along with rising inflation expectations and strong growth should pressure the RBI to raise rates soon.
• Mexico is appealing as a receiver against paying in India because the central bank is further along in its monetary tightening cycle as is evident from the high real rates.

• The management is optimistic on VRLL’s growth prospects over the next couple of years. A shift towards the organized sector would result in robust business opportunities 
• In the near term, stabilization of fuel prices and improved volumes will benefit this sector. 
• We expect VRLL to clock a revenue/EBITDA/PAT CAGR of ~19%/19%/45% over FY21- 24E. We reiterate our Buy rating, with a TP of INR540/share (35x FY24E EPS)