Latest news with #Ambit
Mint
21-05-2025
- Automotive
- Mint
Ambit turns neutral on auto sector; favors Endurance, Samvardhana Motherson; cuts Bharat Forge, Sona BLW
Auto ancillary stocks, once favoured for their promising structural tailwinds, have now entered a phase of valuation correction and performance reassessment. According to Ambit, while the auto ancillary (Anc) sector offers multiple growth levers, it continues to lag original equipment manufacturers (OEMs) on key financial metrics such as cash flow generation and return on capital employed (RoCE). In its latest report, Ambit noted that auto ancillaries are benefitting from a broad set of growth drivers including rising content per vehicle, international expansion, premiumization, and India's cost advantage. The sector is also witnessing structural tailwinds from evolving emission and safety regulations, increased localization, and diversification into non-auto segments such as industrial and electrical components. 'Auto Ancs have multiple growth avenues, including content increase, entry into new products/markets, and leveraging M&A. Premiumization, regulatory changes and EV adoption are driving higher component demand,' Ambit said. It added that tech synergies and offshoring opportunities further enhance the sector's long-term prospects. However, Ambit underlined that auto component manufacturers have not fundamentally outperformed OEMs in terms of revenue, EBITDA, or PAT growth. Ancillaries also have higher capex intensity and weaker working capital cycles, resulting in lower free cash flow (FCFF) and elevated debt levels. 'Scope to improve profitability, terms of trade or RoCE appears limited,' the report said. Despite long-term growth visibility, fundamental challenges continue to restrict earnings quality. 'While Ancs may see faster growth ahead, their structurally weaker balance sheets and limited room for operating leverage make them financially vulnerable,' Ambit observed. Ambit identified three key external risks for the ancillary segment — tariff pressures under USMCA, European Union demand weakness, and intensifying Chinese competition. These are particularly critical as many Indian ancillaries are heavily reliant on exports to North America and Europe. The brokerage also pointed to the risk of EV-led disruption, especially for component makers with higher exposure to internal combustion engine (ICE) parts. That said, Ambit believes these challenges may pave the way for new opportunities, such as EV-specific component exports and offshoring to India from stressed European vendors, albeit with longer gestation periods. Ambit noted that Domestic Institutional Investors (DIIs) have continued to maintain an overweight position on auto ancillaries, attracted by higher growth potential and rerating-led gains. This positioning had paid off until early 2024. However, post the recent correction—primarily triggered by tariff risks—the valuation gap between ancillaries and OEMs has significantly narrowed. In contrast, Foreign Institutional Investors (FIIs) have largely stayed underweight on auto ancillaries, preferring the relatively more stable and cash-generating OEMs, Ambit said. Ambit's relative evaluation framework assesses six auto ancillary stocks based on business fundamentals, financial strength, and valuation metrics. Based on this, the brokerage recommended a 'BUY' on Endurance Technologies (ENDU), Motherson Sumi (MOTHERSO), and Samvardhana Motherson International (MSUMI). It downgraded Bharat Forge (BHFC), Sona BLW Precision Forgings (SONACOMS), and Happy Forgings (HAPPYFOR) to 'SELL'. 'Our pecking order in Auto Ancs is ENDU (BUY) > MOTHERSO (BUY) > MSUMI (BUY) > HAPPYFOR (SELL) > SONACOMS (SELL) > BHFC (SELL),' Ambit said. Within the overall auto space, Ambit continues to recommend reducing the overweight allocation that many institutional investors currently maintain, suggesting a neutral stance going forward. Among all auto stocks, Ambit's top three BUYs are Mahindra & Mahindra (MM), followed by Endurance (ENDU) and Motherson (MOTHERSO). It also added Tata Motors (TTMT) to its preferred picks.
Mint
02-05-2025
- Business
- Mint
Primary markets see a slow start to 2025 amid increased volatility
NEW DELHI : After cruising through primary markets in 2024, Indian companies are taking it slow in 2025 to ride out increased volatility. In the three months ended 31 March, funds raised by listed firms via qualified institutional placements (QIPs) fell by nearly three-fourths sequentially and by almost a fourth year-on-year (y-o-y) to ₹ 14,048 crore, showed data from market research platform Prime Database. Companies had raised ₹ 49,479 crore in the December quarter and ₹ 18,357 crore in the corresponding quarter of 2024 via QIPs. The number of issuers, too, has nearly halved. Only eleven companies carried out QIPs in the first quarter of 2025, compared to 28 companies in the fourth quarter and 21 in the first quarter of 2024. Read more: Cash in equity funds are at a 6-year high. What are fund managers waiting for? In the whole 2024, as of 28 December, companies had raised ₹ 1,37,560 crore via 95 QIPs, compared to ₹ 54,350 crore from 45 issues a year earlier. Other primary market routes, such as rights issues, saw fundraising worth ₹ 1,881 crore in the year's first three months. There were no follow-on public offers (FPOs) during this period. A QIP is when a listed company raises capital by issuing shares only to qualified institutional buyers. A rights issue is when a company offers existing shareholders the right to buy additional shares at a discount in proportion to their holdings. The primary reason for the slowdown is that promoters are reluctant to dilute stakes during the bear market, according to experts. To be sure, when markets correct, a company has to issue more shares to raise the desired amount, i.e., less money for selling more stakes. 'Companies prefer to raise funds at valuations where dilution will be minimal, but the current market volatility has made it difficult," said V. Prashant Rao, director at Anand Rathi Advisors Ltd. 'With market corrections, companies will have to raise funds at lower valuations, so they often delay until there's more stability and predictability to the markets," he added. The Nifty 50 surged 18.8% from 1 January 2024 to 26 September 2024 before it started correcting. As of 30 April, it was down 5.72% from the 26 September peak. Overall, it rose 8.8% in 2024 and has fallen 0.53% in the March quarter of 2025. In volatile markets, investors prioritise protecting existing portfolios over exploring new opportunities like an initial public offering (IPO) or a QIP, said Vikas Khattar, managing director and co-head of investment banking and head of equity capital markets at Ambit. If investors believe in the long-term potential of their holdings, they may double down rather than invest in new IPOs or QIPs, which require evaluating both the business model and the pricing, said a banker on the condition of anonymity. For perspective, the number of public issues fell by almost a fourth y-o-y to 63, in the March quarter, showed an 9 April EY report. However, these companies raised $2.8 billion together—up 12% y-o-y. Read more: Shareholding moves in Q4: Retail investors chased beaten down stocks Hexaware Technologies Ltd had the biggest IPO in the quarter, raising $1 billion in February. India accounted for 22%—the most—of the total IPOs globally in the first three months of 2025. In terms of amount raised, the US topped the list with a 33% share, while India was in fourth place with a 10% share. A total of 91 companies went public and raised ₹ 1.5 trillion in 2024, according to Prime Database data. Investment bankers believe that QIPs will pick up once the equity markets stabilise. Meanwhile, the QIP activity will likely remain subdued in the June quarter. 'A few issues may happen, but broader activity is expected only post this quarter, hopefully when conditions improve," said Rao. Given the uncertainty induced by US President Donald Trump's resolve to hike tariffs, companies are recalibrating their positions in the new trade order, and so are investors, said Bhavesh Shah, managing director, head of investment banking, Equirus Capital. Fundraising activity will resume once there is clarity and the markets regain some balance. In addition to the banking, financial services, and insurance sector, healthcare and domestic consumption stories could be the themes around which fundraising could be centred, he added. Read more: PepsiCo bottler Varun Beverages opts to expand reach as competitors in soft-drinks market engage in price war
Hans India
23-04-2025
- Business
- Hans India
Swiggy gets 1st 'sell' rating since listing from Ambit Capital
New Delhi: Swiggy Limited has received its first 'sell' rating since it was listed in November 2024, with analysts raising concerns about its falling position in both food delivery and quick commerce services. According to a new report by Ambit Capital, Swiggy has lost the early lead it once had in these sectors and now ranks second in food delivery and third in quick commerce. Ambit Capital began its coverage of Swiggy with a cautious view, setting a target price of Rs 310 per share. This suggests a potential drop of over 20 per cent from the company's last traded price. In the food delivery segment, Swiggy is now trailing behind competitor Zomato, which has a larger reach, more users, and higher order volumes, the report said. Although the pace at which Swiggy is losing market share has slowed, Ambit expects its share to settle at around 42 per cent in the long run, it added. Swiggy's quick commerce service, Instamart, is also facing difficulties. Once the largest player in the segment, Instamart has now fallen behind both Blinkit and Zepto. Ambit points out that Instamart's addressable market is limited to just 30 to 50 cities. It also criticised Swiggy's strategy of depending too much on advertising revenue and underestimating the competition. The report says Instamart needs significant investment to catch up with rivals in several areas -- such as product variety, store efficiency, customer acquisition, and advertising reach. Although JPMorgan recently noted that Swiggy is increasing its store count and is slowly catching up with Zepto, Ambit remains more cautious. One major reason for Instamart's decline is its late response to the industry trend of 10-15 minute deliveries. While competitors Blinkit and Zepto focused on faster delivery speeds early on, Swiggy initially stuck with a 30-minute delivery model. It also struggled with a smaller product range and slower marketing efforts. Swiggy now faces tough competition on all fronts, the report noted.
Khaleej Times
10-04-2025
- Business
- Khaleej Times
Indian wealth firm targets Middle East with DIFC hub
Ambit Global Private Client (Ambit GPC), a leader in bespoke financial solutions, has made a foray into the Middle East with a new office in the Dubai International Financial Centre (DIFC). The move follows Ambit's strategic acquisition of Dubai-based Moonrock Investments Ltd in November 2024, signalling the Indian wealth management powerhouse's ambition to go global. The new entity, Ambit Global Private Client (Mena) Limited, merges Ambit's institutional-grade expertise with Moonrock's regional clout, aiming to serve ultra-high-net-worth (UHNW) individuals and family offices across the region. Ambit GPC, a subsidiary of Mumbai-based Ambit Private Limited, already manages over $9 billion in assets under management and advice (AUM&A) for more than 1,000 of India's wealthiest families. Ambit's entry into Dubai taps into the Middle East's financial pulse, leveraging DIFC's status as a global hub. The expansion reflects a broader trend of Indian financial firms eyeing global growth amid India's economic surge. By blending Ambit's sophisticated advisory with Moonrock's local know-how, the firm is poised to attract non-resident Indians, foreign nationals, and regional family offices, the company said. 'Our foray into the Middle East marks a pivotal step in transforming Ambit into an international wealth management brand,' said Ashok Wadhwa, group CEO of Ambit. 'As Indian wealth goes global, we're here to deliver seamless, world-class solutions—wherever our clients are.' The acquisition of Moonrock, regulated by the Dubai Financial Services Authority (DFSA), brings Ambit's acclaimed research, discretionary portfolio management strategies, and innovative direct deal offerings to a new market. It also caters to a growing appetite among Indian residents for offshore investments and the Indian diaspora's interest in tapping India's booming markets. 'DIFC aligns with our vision of empowering clients to think and act globally,' said Amrita Farmahan, CEO of Ambit GPC. 'Our platform bridges Indian and international markets with unique perspectives, and we're thrilled to build lasting relationships here.' Leading the Dubai charge are Digvijay Singh, a 20-year veteran of private banking with stints in India and Dubai, and Shanti Kaliappan, a wealth management expert and former senior executive officer at Moonrock. Their team will offer tailored solutions across asset classes, staying true to Ambit's mantra: 'Wisdom is the ultimate wealth.'
Arabian Business
10-04-2025
- Business
- Arabian Business
India-based Ambit Global Private Client expands footprint into Dubai
Ambit, a leading India-based financial advisory for ultra-high-net-worth individuals (UHNWIs) and Family Offices, announced its expansion into the UAE with the opening of the Ambit Global Private Client (Ambit GPC) office in Dubai. The newly UAE unit, located in Dubai International Financial Centre (DIFC), is a 100 per cent-owned arm of Ambit GPC, the company said. Ambit GPC, with over $9 billion of overall assets under management and advice (AUM&A), provides institutional-quality research and discretionary PMS strategies, innovative 'Direct Deal' vertical and holistic wealth management services. The new entity, Ambit Global Private Client (MENA) Limited, is the result of a strategic acquisition of Moonrock Investments Ltd by Ambit. Moonrock, a Dubai Financial Services Authority (DFSA) regulated and DIFC-registered wealth management firm, was acquired by Ambit in November 2024. This acquisition combines Ambit's expertise in wealth management with Moonrock's strong local presence and proven capabilities, delivering mutual benefits by creating a platform that caters to a diverse clientele, including non-resident Indians (NRIs), foreign nationals and Family Offices, the company said in a media release. Ashok Wadhwa, Group CEO, Ambit, said the foray into the Middle East is a significant step in Ambit's transformation into an international wealth management brand. 'India's economic growth presents a significant opportunity and we are positioning ourselves to offer the necessary expertise and platform to navigate both sides. As Indian wealth becomes increasingly global, we are committed to providing our clients with seamless access to world-class financial solutions, wherever they are,' he said. Amrita Farmahan, CEO, Ambit Global Private Client, said the company's UAE expansion move is a recognition of the growing demand from resident Indians to invest offshore, and equally the strong interest from the Indian diaspora and international investors to access the Indian markets. 'At Ambit GPC, our integrated wealth management platform seamlessly bridges Indian and International markets, providing clients with our unique perspectives,' she said.
