BSE Power index rose nearly 2 percent led by the Adani Green, Adani Power, NTPC
IT stocks likely to remain under pressure amid global headwinds: Analysts
While the country’s largest software exporter TCS reported a 5.2 percent rise in June quarter net profit on July 8, kicking off the latest earnings cycle, IT shares have been sliding, with the BSE…
Nifty Information Technology index fell over 3 percent dragged by the TCS, Coforge, L&T Infotech:
Prabhudas Lilladher View on TCS
We cut EPS by 4.2 percent/2.1 percent due to (1) margin cuts of 100bps/20bps for FY23/24 given (a) sharp decline in Q1 margins, (b) headwinds of onsite wage inflation, and travel costs likely to persist, and (2) cut in FY24 revenue, as we believe demand will normalize amidst worsening macro especially in Europe.
We continue to value TCS on 28x FY24 EPS and arrive at target price of Rs 3,607 (earlier Rs 3,683).
The company is currently trading at 28.8x/25.4x on FY23/24 EPS of 113.3/128.8 with revenue/EPS CAGR of 8.7 percent/10.9 percent over FY22-24E. Maintain ‘Accumulate’.
Anand James – Chief Market Strategist at Geojit Financial Services:
We had gone into last Monday, with 16200 for the week as the base case scenario followed by a turn lower, and 17000 for the medium term as the optimistic scenario. With Friday’s opening burst meeting rejection trades at the 60d SMA of 16280,the strength of uptrend would be put to test today, and favoured view expects a turn lower or a consolidation.
A push above 16235 early in the day, would encourage up moves to aim for 16340 during the day, but sustainability is doubted.
Inability to float above 16195 will expose 16150, Friday’s strong support, as well as 16115, the downside marker for the present up move, with 15940 seen as catchment area, in the event of major downsides.
TCS after Q1 Earnings | What should investors do: Buy, sell or hold the stock?
The constant currency (cc) revenue growth was at 15.5 percent year-on-year (YoY).
V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services:
There are many significant data points which will influence equity markets in the short run. The US jobs data showed 372000 job creation in June, indicating a strong economy and an increasing possibility of the Fed successfully engineering a soft landing of the US economy.
The sharp decline in prices of commodities, particularly of crude, metals, wheat and edible oil augurs well for inflation management in India. This means, RBI can afford to go a bit slow on hiking interest rates in India. This positive trend is likely to keep the domestic equity market resilient. The selling exhaustion from FIIs last week is another positive for markets for the short-term.
The market texture reflects a change in investment strategy from sell on rallies in June to buy on dips in July. Segments like capital goods, autos and high-quality financials indicate strength.
Gainers and Losers on the BSE Sensex in the early trade:
Market Opens: Indian indices opened lower amid mixed global cues on July 11 with Nifty below 16200.
At 09:16 IST, the Sensex was down 269.57 points or 0.49% at 54212.27, and the Nifty was down 83.10 points or 0.51% at 16137.50. About 950 shares have advanced, 927 shares declined, and 127 shares are unchanged.
Bharti Airtel, TCS, Tech Mahindra, Wipro and HCL Tech were among major losers on the Nifty, while gainers were NTPC, ONGC, Power Grid Corp, Axis Bank and Tata Consumer Products.
Indian rupee opened marginally higher at 79.22 per dollar on against previous close of 79.25.
Tata Motors hikes prices of its passenger vehicles. Details here
“The company has taken extensive measures to absorb significant portion of the increased input costs,” Tata Motors said.
Indian markets are likely to open on a negative note today on the back of weak global cues as concerns persisted about hikes in interest rates and their impact on economic growth.
US markets ended mixed amid release of macroeconomic data.