In today’s briefing:
- SENSEX Index Rebalance: Trent, Bharat Electronics to Replace Nestle, IndusInd Bank
- Schloss Bangalore IPO – Growth Has Softened; Corporate Structure Reorganised
- Bajaj Finance (BAF IN) Vs. Kotak Mahindra Bank (KMB IN): A Relative Value Play
- CARE Ratings Q4 & FY25 Update: Strong Performance Driven by Ratings and Diversification Gains
- Borosil Renewables Q4 FY25 Update: Domestic Strength Shines Amidst Overseas Challenges
- IndusInd Bank: Auditors Caught Napping
- JSW Energy Q4 FY25 & FY25 Update: Powering Ahead with Landmark Capacity Expansion
- Business Breakdown: Precot Limited – A Strategic Weave of Yarn and Technical Textiles
SENSEX Index Rebalance: Trent, Bharat Electronics to Replace Nestle, IndusInd Bank
- In line with forecasts, Trent and Bharat Electronics will replace Nestle India and Indusind Bank in the S&P BSE SENSEX Index after the close of trading on 20 June.
- Passive funds are estimated to buy 3-4 days of ADV in the adds and sell 1-10 days of ADV in the deletes. That increase to 3.5-17 days of delivery volume.
- Indusind Bank (IIB IN) stock has dropped recently due to a large quarterly loss and allegations of fraud. The stock is also a potential deletion from the NIFTY Index.
Schloss Bangalore IPO – Growth Has Softened; Corporate Structure Reorganised
- Schloss Bangalore Ltd (SCHBL IN) is looking to raise about US$409m in its India IPO. The deal has been downsized from an earlier size of around US$600m.
- It is a luxury hospitality company which owns, operates, manages and develops luxury hotels and resorts under ‘The Leela’ brand, through direct ownership and hotel management agreements with third-party owners.
- We have looked at the company’s past performance in our previous notes. In this note, we talk about the RHP updates.
Bajaj Finance (BAF IN) Vs. Kotak Mahindra Bank (KMB IN): A Relative Value Play
- The Bajaj Finance Ltd (BAF IN) vs. Kotak Mahindra Bank (KMB IN) Price-Ratio has deviated more than two standard deviations from its one-year average, presenting a potential relative value opportunity.
- While one of the two companies displays higher revenue growth, the valuation might begin to become stretched. Fundamental key figures are provided to complement the statistical analysis.
- Trade setup, statistical properties, factor exposure, risk management strategies, and key events are discussed.
CARE Ratings Q4 & FY25 Update: Strong Performance Driven by Ratings and Diversification Gains
- CARE Ratings achieved its highest-ever standalone and consolidated income and profitability in FY25, significantly improving margins across the group.
- The results validate the effectiveness of the company’s quality-led growth strategy, operational efficiencies, and strategic investments in non-ratings and international businesses.
- The performance reinforces confidence in Care’s ability to outpace the industry and achieve its diversification targets, supported by strong execution and market positioning.
Borosil Renewables Q4 FY25 Update: Domestic Strength Shines Amidst Overseas Challenges
- Definitive anti-dumping duty (ADD) imposed on solar glass imports from China and Vietnam until December 2029; Standalone Indian operations showed significant improvement in Q4 and FY25.
- The ADD provides a stable pricing environment and growth catalyst for domestic solar glass manufacturing. Improved domestic performance underscores resilience despite international market volatility.
- Reinforces a positive outlook for the Indian business due to favorable regulatory support and robust demand. However, the German subsidiary’s performance remains a key monitorable.
IndusInd Bank: Auditors Caught Napping
- Indusind Bank (IIB IN) released their Q4 and FY25 results, which highlighted further episodes of bizarre accounting plays.
- The cumulative impact of material accounting adjustments was INR 26 bn, enough to engulf profits by 50% for the year.
- Noting the same, management and auditors, which were left blindfolded, suggested a possible fraud committed against the bank.
JSW Energy Q4 FY25 & FY25 Update: Powering Ahead with Landmark Capacity Expansion
- FY25 was a landmark year for JSW Energy Ltd (JSW IN), crossing 10 GW operational capacity, driven by record wind additions and strategic acquisitions of KSK Mahanadi and O2 Power.
- The aggressive inorganic and organic expansion, coupled with a strong focus on energy storage, positions JSW Energy as a diversified player in India’s evolving power landscape, balancing baseload and renewables.
- The disciplined capital allocation, robust project pipeline, and strong execution capabilities, despite high leverage, reinforce confidence in achieving the ambitious ’30 by 30′ target and long-term value creation.
Business Breakdown: Precot Limited – A Strategic Weave of Yarn and Technical Textiles
- Precot (PRTM IN) has shifted focus from its spinning division to the high-margin Technical Textiles, with EBITDA margins in this rising to 33% in 1HFY25 from 26% in FY24.
- This shift towards TT has transformed Precot’s revenue mix, improving profitability and reducing reliance on the cyclical spinning business. However, the company faces customer concentration risk in the TT segment.
- With the TT segment now driving 76% of total EBITDA in 1HFY25, Precot’s growth strategy is clearly focused on margin expansion, making it a resilient player in the textile sector.
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