FIND

India Commercial Vehicle sector on a strong growth path

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Low base likely to push growth further in coming months

The Commercial Vehicle (CV) sector, which is considered to be the barometer of an economy, recorded a surge of 19.9% in unit sales during FY18. The remarkable feature of this growth has been recovery post GST implementation (Image 1). Overall sales of CVs increased by 34% and 31% respectively in Q4CY17 and Q1CY18 after a decline of 9% in Q2CY17.

India CV qtr sales growth rate[Image 1: India CV quarterly unit sales and y-o-y change]

At the same time, the 12-month moving sum of CV sales witnessed sharp northwards movement post July-17 (Image 2). We assign this surge to fleet owners’ bulk buying post GST implementation. Moreover, this trend is expected to continue in coming months given improved macro-conditions at ground level, huge pent-up demand, the higher average age of the fleet and lower comparable (Q2CY17 was down 9% y-o-y).

India CV Sales Trend 12-Month Moving Sum[Image 2: India CV unit sales 12-month moving sum] Read the rest of this entry »

Consistent delay in PF payment is a lead for deterioration in financials: FiND study

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Publically available data from Employees’ Provident Fund Organization (EPFO) is an important piece of information that can be consumed in risk assessment of corporate borrowers. In our view, deep-dive analytics on EPFO data can offer unique insights into the company’s functioning.

Through analysis of EPFO data, the banks can find out whether the companies in their loan portfolio are depositing employees’ provident fund (PF) on time or not; and whether there is any significant drop in the PF amount deposited by the company. At the same time, lenders can also identify companies which are downsizing the workforce.   

FiND Credit Risk Early Warning System (EWS) consists of 25+ business rules that analyze the EPFO data for the companies every month. One of the key business rules is a delay in PF payment for a given month. In our view, a delay in PF payment may imply liquidity crunch for the company and hence it is a red flag for the banks. 

Our hypothesis is that red flags related to PF payment can act as a leading indicator to the deterioration in the company’s financial performance. To test this hypothesis, we back-tested our engine on EPFO data for three months (Jan-17, Feb-17, and Mar-17) on the below-mentioned business rule:

Delay in monthly payment of PF by more than 10 days for more than 50 employees

From our EPFO data universe of 1,250+ companies, FiND EWS identified 35 companies who have delayed PF payment for all 3 months.

Then, we checked if there is any deterioration in the financial performance (captured by FiND Financial Risk score) for these companies post-March 2017 quarter. 

We found that: 86% of companies (30/35) witnessed a deterioration in Financial Risk score in the subsequent quarters.

We highlight 10 such companies below:
PF shortlisted cos
[Image 1: Financial Risk Score for 10 Companies with PF red flags]
Read the rest of this entry »

Japan Airlines delivers industry-beating on-time performance; Air India consistently lags on punctuality

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The on-time performance (OTP) is one of the most important performance indicators for airlines. It shows how frequently the airline has managed to operate flights within the declared scheduled time.

OTP is a measure of service quality/ punctuality. The higher OTP can help airlines to meet its customer expectations. At the same time, improvement in customer service can also boost airline’s profitability.

Over the past 24-months, OTP for Japan Airlines has consistently outperformed the industry average. On the other hand, OTP for state-run Air India has consistently remained below the industry average in the last 24-months except April 2017.

ONTIME PERFORMANCE

Heckyl’s alternative data platform FiND collects and organizes macro, micro, and financial data to provide unique insights into aviation sector.

To know more about FiND, email us at find@heckyl.com

Track clinical trials in FiND Calendar to spot new opportunities in pharma sector

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With a clear focus on reduction of the information arbitrage, Heckyl has built an alternative data platform FiND which collects and organizes macro, micro, and financial data to provide unique insights into pharmaceutical sector.

In our view, trading opportunities can be spotted in the stock market by discovery and analysis of vast amount of alternative data available on the web. One such data set is clinical trial study results for pharmaceutical companies.

Clinical trials are research studies that explore whether a drug or device is safe and effective for humans. The pharmaceutical products go through three phases of clinical trials followed by a regulatory approval process. After completing all three phases and the approval process, the company can start monetizing the drug or device.

The drugmakers report the progress of ongoing clinical trials for each phase from time to time. The result of late study trials (phase 2 and 3) can provide the best idea about a drug’s chances of approval. A favorable result of late study trials can be seen as positive by the market and vice-versa.

To help traders/ investors, we have introduced Calendar which tracks release dates for clinical trial, drug approval, patent expiry, operating stats and industry events.

We present a case study on Clearside Biomedical, Inc., a late-stage biopharmaceutical company developing drug therapies to treat back-of-the-eye diseases.

On Mar. 5, 2018, Clearside announced positive topline results from its pivotal Phase 3 clinical trial of suprachoroidal CLS-TA in patients with macular edema associated with non-infectious uveitis (Image 1).

Clearside calendar news
(Image 1: News screen for Clearside) Read the rest of this entry »

Insight from FiND: Did you MISS the recent opportunity to short Facebook?

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FiND, an alternative data platform, analyses news + data from thousands of sources (including social media) in real time. We have a clear focus on reduction of the information arbitrage by “discovery and analysis” of the news flow in real time. Our proprietary Sentiment Engine analyzes news by applying NLP and various business rules to capture underlying sentiment (positive/ negative/ neutral) accurately.

Earlier this week, the shares of Facebook were beaten down at the Wall Street due to a privacy failure by the social media giant. It’s surfaced that Cambridge Analytica improperly used the data of 50 million Facebook users to manipulate voters in US Presidential Election 2016.

News reports highlighting concerns over privacy of FB users’ data and misuse of social network platform have been making the rounds across mainstream media for months now. The negative media coverage highlighting these concerns gathered momentum during this month. However, the stock corrected sharply only after the media reported the misuse of FB users data by Cambridge Analytica. We highlight some of the news items captured by FiND below:

FB NEWS FLOW
[Image 1: Company News Screen for FB]
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Geneva Motor Show 2018: EVs steal the show; Volkswagen, Tata Motors lead product launch news coverage

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Geneva Motor Show 2018 turned to be one of the most successful shows in recent years. Now that it has come to an end, we at Heckyl believe that success of the OEMs in showcasing new products/launches can be measured by the amount of media coverage they have received.  

One clear message, visible from the attention given by Press and the OEMs, was that Electric Vehicles are arriving earlier than expected. See below our Buzzwords compilation for passenger vehicle industry from last one month’s new flow (Image 1).

Industry
[Image 1: Buzzwords for Auto Industry]

At OEMs level, auto behemoth Volkswagen is back in the news for all the good reasons. A surprise inclusion in the list was that of Tata Motors whose news coverage came close 4th, almost in line with Toyota Motor but ahead of i-series manufacture BMW. We believe that this jump in news for Tata Motors can be attributed to the launch of Jaguar’s all-electric I-PACE at Geneva.

This assumption is further strengthened by the fact that in Product launch category (yes, you can search and analyze news by categories in FiND, Heckyl’s News and Data Terminal!), Tata Motors jumped to the second position in last one month’s news coverage (Image 2). 

SHARE OF VOICE - TOP AUTO MAKERS
[Image 2: Share of Voice] Read the rest of this entry »

Drop in promoter holding is a lead for deterioration in financials: FiND study

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Promoter ownership data is an important piece of information that can be consumed in risk assessment of corporate borrowers. This is because steep fall in promoter ownership could mean low confidence of promoters in their own company. Moreover, promoter equity dilution may also invite a change in management.

Our hypothesis is that promoter ownership related red flags such as a significant drop in promoter shareholding can act as a leading indicator to the deterioration in the company’s financial performance.

To test this hypothesis, we back-tested business rule output derived from FiND Credit Risk Early Warning System for all listed companies. Our back-testing has shown 298 promoter ownership related red flags for 232 companies for the March 2016 quarter.

As a next step, we have checked if there is any deterioration in the company’s performance captured by our Financial Risk score for these 232 companies over the last 2 years.

We found that: 85% of companies witnessed a deterioration in Financial Risk score in the subsequent quarters.

Ownership data study stats Read the rest of this entry »