Adani stocks continued to bleed on Monday despite a lengthy rebuttal released by the group. Globally, investors remain cautious ahead of Fed’s interest-rate decision and earnings from big-tech companies including Apple and Alphabet.
IT Index sheds a per cent in early trading with all stocks in red
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Tech Mahindra shares: Should you buy the IT stock post Q3 results?
“Tech Mahindra 3Q results were in line, with growth driven by communications and BPO. Company outlook matches with our sector stance of macro impact on demand, pullback in smaller deal flow, top clientele moderation and softness in BFSI/Hitech. We see possibility of similar cost aggression as seen in past instances of margin fall-off in FY17/FY20, where margins recovered through employee cuts/low or no wage hikes,” said Ambit Capital.
For now, Tech Mahindra stays a tactical play on margin recovery, available at reasonable valuations with implied USD revenue CAGR of 5.1% over FY22-32E. Clarity on management change and more disciplined execution required for structurally positive stance, the brokerage added which has maintained its Buy rating on Tech Mahindra shares with a target price of ₹1,190 apiece. (Read More)
Indices remains volatile with gaining at open but quickly moving to red; Sensex down 100 pts
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China’s Economic Activity Rebounds Sharply After Reopening
China’s manufacturing and services expanded for the first time in four months in January as the reopening from Covid Zero continued and the Lunar New Year holiday spurred travel and spending.
The manufacturing purchasing managers’ index rose to 50.1 from 47 in December, matching economists’ estimates, the National Bureau of Statistics said Tuesday. The non-manufacturing gauge — which measures activity in both the services and construction sectors — increased to 54.4 from 41.6, topping expectations for 52 in a Bloomberg survey of economists.
Numbers above 50 represent an expansion, while anything below indicates contraction.
January’s activity improvements are welcome news for the world economy, which is cooling and and will rely in part on China’s recovery in 2023 to offset other risks. The International Monetary Fund on Tuesday raised its global economic growth outlook to 2.9%, the first increase in a year, alongside an upgrade to China’s estimated expansion. It now expects Chinas economy to grow 5.2% in 2023. (Bloomberg)
FTSE Russell says monitoring information on Adani Group over Hindenburg report
Global index publisher FTSE Russell said on Tuesday it was aware of short-seller Hindenburg Research’s report on the Adani Group and associated securities and that it was monitoring the information. “Adani index constituents within the FTSE Russell indices will continue to remain eligible in accordance with the underlying index methodologies,” it said in a notice published on its website. (Read More)
Sensex gains at the preopen session; Adani Group, TechM, L&T in focus today
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Geojit Financial Services on today’s market: The Adani crisis which had impacted market sentiments will be pushed to the back burner if the FPO sails through via institutional investment
Dr V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services: The Budget tomorrow and the Fed decision on interest rates by evening tomorrow will have a big impact on markets. A positive, as we go into the Budget, is that instead of the usual pre-Budget rally on expectations, this time we had a market correction triggered by the Adani crisis. So, if there are no negative surprises in the Budget and the Fed commentary is not hawkish, there can be a post-Budget rally in the market. The Adani crisis which had impacted market sentiments will be pushed to the back burner if the FPO sails through via institutional investment. There has been an overreaction in banking stocks with Bank Nifty correcting sharply by 6.2% in the last 3 sessions. High-quality banking stocks present a good buying opportunity. Signals from the US indicate that Indian IT will do well in 2023.
Small-cap penny stock declares rights issue after giving 450% return in 3 years
Vikash Ecotech shares are one of those small-cap stocks on Dalal Street that have delivered whopping returns to its shareholders in the post-Covid market rebound. In these near three years, this penny stock has surged from around ₹0.60 apiece to ₹3.40 per share levels, delivering more than 450 per cent return to its positional shareholders. However, the money-making journey doesn’t end here only for long-term investors. The board of directors of the small-cap company has announced to raise ₹100 crore through the issuance of equity shares, other convertible securities, warrants, bonds, FPO, etc. The small-cap company also considered and approved rights issues worth not exceeding ₹50 crore. (Read More)
Reliance Securities Stock in Focus for Today: Wipro
STOCK IN FOCUS
Wipro (CMP 402): In view of the strong deal pipeline, management’s confidence on growth across verticals and attractive valuation, we have a BUY recommendation with a target price of Rs460, valuing the stock at a P/E multiple of 17x FY25E earnings.
Intraday Picks
TITAN (PREVIOUS CLOSE: 2,335) BUY
For today’s trade, long position can be initiated in the range of Rs2,320-
2,310 for the target of Rs2,390 with a strict stop loss of Rs2,275.
EICHERMOT (PREVIOUS CLOSE: 3,191) BUY
For today’s trade, long position can be initiated in the range of Rs3,155-
3,135 for the target of Rs3,295 with a strict stop loss of Rs3,085.
LTIM (PREVIOUS CLOSE: 4,449) BUY
For today’s trade, long position can be initiated in the range of Rs4,425-
4,405 for the target of Rs4,575 with a strict stop loss of Rs4,335.
M Jagannath and Tablesh Pandey recommended as new MDs of LIC by FSIB
The Financial Services Institution Bureau screened the biodata of six candidates on Monday for the positions of Managing Directors in Life Insurance Corporation of India(LIC) and has recommended the name of M Jagannath for the first vacancy of Managing Director in LIC of India and Tablesh Pandey for the second vacancy of Managing Director in LIC of India. However, the final appointment needs to be approved by the Appointments Committee Of Cabinet.
As of now, the LIC has four MDs and two of them are set to retire in the coming two months. The two directors of LIC who will retire include Raj Kumar and BC Patnaik. M Jagannath and Tablesh Pandey are most likely to fill the two positions after the two current MDs of LIC retire following the end of their term. (Read More)
Stocks to Watch: Adani Group, L&T, Tech Mahindra, Reliance Industries, REC, BPCL, KEC International, Vodafone Idea, Welspun India, and IIFL Finance
Coal India, Cholamandalam Investment, ACC, Dhanlaxmi Bank, IOC, Godrej Consumer Products, Jindal Steel and Power, IHC, PGCL, and Railtel will be among the stocks in focus as they declare their December quarter earnings today. (Read More)
IMF retains India’s GDP growth outlook for next fiscal at 6.1%
The International Monetary Fund (IMF) on Tuesday projected India to be the fastest-growing major economy in FY24, retaining the forecast at 6.1% in its latest World Economic Outlook, citing “resilient” domestic demand despite a challenging external environment. However, growth is expected to slow from 6.8%, estimated for FY23, according to the report, and then rebound to 6.8% in FY25.
The IMF report comes a day ahead of the Union budget FY24 on Wednesday, which is expected to help insulate India’s economy from global headwinds and geopolitical uncertainty while sticking to the path of fiscal consolidation. (Read More)
Twitter Makes First Interest Payment on Musk Buyout Debt
Twitter Inc. made its first interest payment on the $12.5 billion in debt that Elon Musk used to take the social media giant private last year.
The company paid a group of seven banks, led by Morgan Stanley, which became stuck with the debt after they were unable to sell it to outside investors.
Representatives for Morgan Stanley and Musk did not immediately respond to requests for comment.
The first coupon was expected to cost Twitter roughly $300 million, according to Bloomberg calculations and market participants not involved in the Twitter deal. The payment was due around Jan. 27, about three months after the transaction closed.
A lot is riding on these interest payments. Questions remain about Musk’s ability to turn around the social media giant, though the fact that he’s made good on the first chunk of interest expense stands to bolster confidence in his ability to avert a bankruptcy in the near term. (Bloomberg)
KEC International bags new orders worth ₹1,313 crore
Global infrastructure engineering, procurement, and construction (EPC) major KEC International on Monday said that it has secured new orders of ₹1,313 crore across its various businesses.
According to a statement from KEC, the business has secured orders for transmission and distribution projects in India, East Asia Pacific and SAARC. These are for 220 kV GIS substation for a refinery project in India, 500 kV transmission line in Thailand and another 132 kV transmission line and associated substations in Nepal.
The company also said its business has secured a large order for a 500 megawatt (mw) solar PV project in India.
Vimal Kejriwal, managing director and chief executive officer, KEC International, said, “In line with the government’s thrust on green hydrogen and renewables, such as solar, we are now refocusing on this business. With the substation order in T and D, we have now diversified our customer base to include nonutility clients, in addition to the current power utilities.” (ANI)
Tech Mahindra Q3 net down 5.3 pc despite revenue jump as profit margins narrow
Fifth-largest IT services company Tech Mahindra on Monday reported a 5.3 per cent dip in the December quarter net profit to ₹1,296.6 crore due to declining margins on higher workforce costs.
The company reported a nearly 20 per cent growth in total income to ₹13,735 crore as against ₹11,451 crore in the year-ago period.
It was a narrowing of the profit margins to 12 per cent from 14.8 per cent which impacted the bottom line the most.
Chief Financial Officer Rohit Anand attributed the margin impact to pressures on the supply side, wherein higher wages impacted profitability.
He also hinted that achieving the 14 per cent target for end of FY23 may be difficult, explaining that an increase in wages due to the overall industry scenario has hiked staff costs, there was an accounting impact due to recent acquisitions and large deals being a drag on profitability initially. (PTI)
Banks wary of giving new loans to Adani group even as RBI takes stock
Local lenders to the Adani group are wary of providing new loans to the group, at least in the near term, two senior bankers said, with one saying that officials from the Reserve Bank of India (RBI) last week requested data on the bank’s exposure to the conglomerate.
Bankers have become cautious of their involvement with the group after the US-based Hindenburg Research alleged stock manipulation and fraud by Adani Group companies. The Adani group has, in turn, called the allegation “a malicious combination of selective misinformation and concealed facts relating to baseless and discredited allegations to drive an ulterior motive”. (Read More)
Rupee gains 7 paise to close at 81.52 against US dollar as crude oil dips
The rupee rose by 7 paise to close at 81.52 against the US currency in a restricted trade on Monday, supported by a weak greenback in the overseas markets and a decline in crude oil prices.
At the interbank foreign exchange market, the local unit opened lower at 81.69 and touched a low of 81.72 against the US dollar in line with losses in the equity markets.
Later, it recovered ground and touched a high of 81.49 before settling at 81.52, showing gains of 7 paise over the previous close of 81.59 on Friday.
“The Indian rupee recouped opening loss after the dollar supply from the corporates following the month-end adjustment. Sentiment remained buoyant as traders waited for the Union budget for a directional trend,” said Dilip Parmar, Research Analyst, HDFC Securities.
The bias remains weak for USDINR as long as it trades below 82.20. In the near term, it is expected to trade between 82.20 to 80.90, Parmar added. (PTI)
Buy or sell: Vaishali Parekh recommends 3 stocks to buy today
Vaishali Parekh of Prabhudas Lilladher has recommended three day trading stocks, here we list out full details in regard to those intraday stocks for today:
1] Cochin Shipyard: Buy at ₹487, target ₹507, stop loss ₹480;
2] REC: Buy at ₹115.50, target ₹119, stop loss ₹114; and
3] Schneider Electric Infrastructure: Buy at ₹181, target ₹187, stop loss ₹177. (Read More)
L&T Q3 net profit rises 24% to ₹2,553 cr, revenue grows 17%
Larsen and Toubro Ltd’s consolidated net profit was up 24% from a year ago to ₹2,553 crore in the third quarter of 2022-23. Even after adjusting for one-offs, recurring net profit stood at ₹2,456 crore, growing 20% compared to a net profit of ₹2,055 crore in a year ago.
One-offs included an exceptional gain of ₹97 crore following the divestment of the mutual fund business which was however offset by onetime charges due to the remeasurement of the wholesale loan assets of the financial services segment.
With the conclusion of the sale of the mutual fund arm and a phased rundown of the wholesale loan book, its financial services business will continue to grow in line with the strategy of “retailization of the loan book”, said S. N. Subrahmanyan, chief executive officer and managing director, L&T Ltd. We reported strong all-round results for the quarter, he added. (Read More)
Adani conglomerate plans independent audit of group companies
The Adani Group plans to hire one of the “big six” global accounting firms to evaluate its corporate governance and audit practices following allegations of fraud by US short seller Hindenburg, two people with direct knowledge of the matter said.
The independent audit will be commissioned after the completion of the group’s flagship Adani Enterprises Ltd’s ₹20,000 crore follow-on public offering, and based on that, the legal options will be decided, the people said, requesting anonymity. (Read More)
Stocks fall on Monday and US yields climb as central bank hikes awaited
A gauge of global stocks retreated on Monday after six sessions of gains while U.S. Treasury yields rose ahead of central bank policy announcements and data that may shed light on whether progress has been made in bringing down inflation.
Investors widely expect the Federal Reserve will raise rates by 25 basis points (bps) on Wednesday, with announcements on Thursday from the Bank of England and European Central Bank (ECB), both of which are largely expected to hike by 50 bps.
“The market has had a big run and the trading is a bit more cautious heading into a week which likely will be an inflection point for the overall market,” said Keith Lerner, co-chief investment officer at Truist Advisory Services in Atlanta, Georgia.
On Wall Street, U.S. stocks slumped, with 10 of the 11 S&P sectors closing lower, while Johnson & Johnson lost 3.70% after a U.S. court rejected the company’s plan to offload into bankruptcy tens of thousands of lawsuits over its talc products.
The Dow Jones Industrial Average fell 260.99 points, or 0.77%, to 33,717.09, the S&P 500 lost 52.79 points, or 1.30%, to 4,017.77 and the Nasdaq Composite dropped 227.90 points, or 1.96%, to 11,393.81.
The rate increase expected at the Federal Open Market Committee’s Jan. 31-Feb. 1 meeting would bring the policy rate to the 4.5%-4.75% range. That’s two quarter-point rate hikes short of the level most Fed policymakers in December thought would be “sufficiently restrictive” to bring inflation under control. But futures currently expect rates to peak at about 4.9% in June before retreating to 4.5% by year-end. (Reuters)
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