Financials

Report by CHA-AM Advisors

David Scott sees global banks as still offering substantial value, with China the standout deep-value opportunity. Chinese banks trade at distressed-looking valuations despite resilient loan growth, profitability and well-covered dividends; David argues they are “too cheap to ignore”, with buybacks also looking increasingly likely given the large discounts to book value. China Merchants Bank is his preferred name given superior fundamentals and a valuation now around peer levels. By contrast, he expects Indian banks such as HDFC and Kotak to continue underperforming as intense competition for deposits, staff and lending compresses margins and efficiency. He remains positive on Banorte (a cheap play on Mexico’s growth) and Lion Finance (which is up another 155% since he last recommended it), while highlighting Commercial International Bank as a new Egyptian idea.

Consumer Discretionary

Report by India Independent Insight

Iii’s latest Beyond the Street report flags a more cautious read-through from M&M EV dealership checks. The XUV400, XEV 9e and BE 6 all carry discounts of ₹1-3 lakh, with ready delivery available on every model. The XEV 9e, listed at ₹34.49 lakh, is available at ₹31.75 lakh, a 7.94% discount, while state incentives take the effective discount to c.15% before negotiation. This more than reverses management’s 2.7% mid-July price hike. Ready availability is also notable given commentary around lost July production days, a supplier fire and plans to double monthly EV output by end-FY27. Iii concludes immediate delivery and heavy discounting point to demand, not supply, as the binding constraint for M&M’s EV portfolio, raising margin risk if discounting persists as capacity scales.

Consumer Discretionary

Report by India Independent Insight

M&M’s decision to pre-announce GST benefits - branding itself as a “consumer-first” OEM - may be less about patriotism and more about inventory management. Dealer checks reveal heavy discounting, even on new models like the Thar Roxx, despite expectations for strong festive demand. Wholesale dispatches have trended down since May, with August volumes (~40k) significantly lower than even last year’s levels. Discounts are valid only until Sep 21st, ahead of GST 2.0 implementation, suggesting M&M is flushing dealer stock to enable a push into Oct’s festive peak. While this strategy could boost near-term volumes, it raises margin risk and potential disruption to the EV transition.

Financials

Report by Galliano's Financials Research

Victor Galliano favours four longs and one short as his conviction calls for the year ahead. 1) Bank Mandiri (Indonesia) continues to generate improving returns and has strong capital ratios, credit quality and liquidity metrics. 2) KB Financial (South Korea) is a deep value pick. 3) China Merchants Bank is a contrarian pick, which looks well positioned to confront concerns re. Chinese NPLs and also on very attractive valuations. 4) Banco do Brasil screens well re. valuations and returns; its growth potential also looks particularly appealing. 5) Victor’s key sell is Kotak Mahindra Bank (India) as it is richly valued, exposed to low prospective earnings growth and has low credit quality coverage.

Financials

Report by India Independent Insight

The Pradhan Mantri Awas Yojana (PMAY) has provided opportunities for low-income individuals to own homes in urban areas through the Credit Linked Subsidy Scheme. The scheme has benefited both home borrowers and real estate developers, as the government bears a substantial subsidy burden. The affordable housing market is thriving, especially in Tier 2 and Tier 3 locations, attracting a surge of finance companies. However, there are risks associated with above-average growth and credit decisions. Attrition rates are high and employee behaviour can impact loan disbursal. The market could be at a cyclical peak.

Companies covered include Aptus Value Housing, Aavas Financiers, Home First Finance, Capri Global, Mahindra Finance, AU Small Finance Bank, IIFL, Piramal Enterprises and Five-Star Business Finance.

Financials

Report by Hemindra Hazari

The backdoor entry of Uday Kotak into the board of directors of KMB after he steps down as the CEO at the end of the year should be recognised for what it is, namely, a method of exercising control over the bank without being saddled with executive responsibilities. This decision also reflects poorly on the board of directors for not taking CEO succession seriously for two decades. When a prominent entity in the financial system has a history of disdain towards the regulators and finds loopholes to permit the founder to exercise control, stakeholders should be concerned.