PremiumShare Market Today: Indian equities closed at record highs amid upbeat sentiment globally, fuelled by hopes that a softening in US inflation data will see US Fed pause its rate hikes. Global shares were largely higher, with France's CAC40 up 0.3%. The German DAX fell 0.1% and Britain's FTSE100 added 0.2%.
The coal ministry has set a target to gasify 100 million tonne of coal by financial year 2030. A comprehensive scheme amounting to ₹6,000 crore is under consideration to promote coal and lignite gasification projects for bothPublic sector undertakings and private players, the ministry has said.
Mint first wrote about the government’s plan for a ₹6,000 crore viability gap funding for coal gasification. (Read full story here)
Imports declined 17.48% to $53.1 billion in June from $64.35 bn a year ago, according to government data.
Trade deficit during April-June improved 7.9% to $57.6 billion.
China's BYD Co has submitted a $1 billion investment proposal to build electric cars and batteries in India in partnership with a local company, three people with direct knowledge of the plan told Reuters.
BYD and privately held Hyderabad-based Megha Engineering and Infrastructures have submitted a proposal to Indian regulators to form an EV joint venture, the people said, asking not to be named because the application is private.
Utkarsh Small Finance Bank IPO received strong investor interest, with issue being subscribed 42 times so far on the final day. Bids for 506.53 crore equity shares have been received against the issue size of 12.05 crore shares.
Wipro has upped its ante on checks and balances on contract hiring, a fallout of the hiring scam at Tata Consultancy Services (TCS).
"We are continuously looking at vendors. The process was stringent and we are making it more periodic and bringing in higher frequency of performance checks . More periodic rigor of managing any vendors," Saurabh Govil, chief human resources officer for Wipro told Mint.
Wipro will ensure that procurement and resource management group executives, who are key in getting contract staffing vendors on board, get shifted across teams and even locations every three to four years, Govil added.
Last month, Tata Consultancy Services sacked six employees after finding them guilty of accepting favours from certain staffing firms in the appointment of contractual workers.
# Wipro Ltd. reported Q1FY24 results, with a marginal miss on the revenue front and better-than-expected performance on PAT margin level.
# Revenue declined 1.5% QoQ / up 6.0% YoY in INR terms to Rs. 22,831 crores vs. market estimates of Rs. 22,993 crores. Revenue in CC terms declined 2.8% QoQ / up 1.1% YoY. The revenue decline in the quarter was seen in hi-tech vertical and financial services and largely impacted due to softer discretionary spending.
# EBIT fell 5.5% QoQ / up 12.1% YoY to Rs. 3,458 crores, while EBIT margin stood at 15.1%, down 63 bps QoQ and below market estimates of 15.7%.
# Net income stood at Rs. 2,886 crores (down 6.7% QoQ / up 12.8% YoY), while PAT margin came in at 12.6% vs. market estimates of 12.1%, due to higher other income which grew sharply by 37.2% YoY to Rs. 648 crores.
# Attrition in IT services stood at 17.3% in Q1FY24 compared to 23.0% in Q1FY23.
# Large deal TCV stood at USD 1.2 billion in Q1FY24 as against USD 1.1 billion in Q1FY23.
# The company is using generative AI for multiple things. To accelerate innovations in AI, the company has announced a $1 billion investment in AI.
# Management expects revenue from IT Services business for Q2FY24 to be in the range of -2.0% to +1.0%, in CC terms.
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Wipro posted tepid results, with revenue missing market estimates but focus on operational improvements and productivity enhancements kept bottom line on the growth trajectory. Globally, businesses have been reducing discretionary spending in response to a weak macro environment and was visible on the company’s revenue as well. Further, the company announced a USD 1 billion investment in AI in the next three years which shows that the company is focusing to advance its foundation in AI, data and analytics capabilities. The declining attrition and robust growth in deal bookings augur well for the company’s future but current macro headwinds and degrowth in revenue is a cause for worry. Going forward, we expect the management to work further on improving operational efficiencies against the backdrop of near-term uncertainties.
Food inflation at -1.24% in June vs -1.59% in May.
June quarter (Q1FY24) earnings has been somber for IT stocks so far, with large-caps Tata Consultancy Services and HCL Technologies reporting subdued numbers.
Peer Wipro Ltd was no exception, as a slowdown in discretionary technology spends by clients weighed on its revenue growth. Its IT services revenues fell 2.8% sequentially, in constant currency terms, coming in below analysts' estimates. The decline was across geographies, indicating broad-based impact. (Read full story here)
In his role as the CDO, Chandani will be responsible for overseeing the data and analytics strategy at Angel One. With Deepak’s onboarding, the company is better positioned to harness the benefits of a large data lake, through Artificial Intelligence, Machine Learning and Analytics.
Gold prices were firm on Friday, set to mark their biggest weekly gain since April, as markets scale back expectations of further US interest rate hikes, pulling down the dollar to its lowest in more than a year, agencies reported.
Spot gold was little changed at $1,959.81 per ounce, and up 1.9% for the week. U.S. gold futures were flat at $1,964.00.
Making gold less expensive for overseas investors, the dollar index touched its lowest level since April 2022.
Crude oil was set to mark its third straight week of gains, as prices rose Friday due to supply disruptions in Libya and Nigeria, and hopes of increase in demand after data showed that inflation in the US may be cooling, agencies reported.
Brent crude futures were up 5 cents at $81.41 per barrel, while US West Texas Intermediate rose 9 cents to $76.98.
On Thursday, a number of oil fields in Libya were shut down in a protest by a local tribe against a kidnapping of a former minister. Separately, Shell has suspended loadings of Nigeria's Forcados crude oil due to a potential leak at a terminal.
Protests in Libya alone could take away more than 250,000 barrels of oil per day from the market, according to a report by ANZ Research.
JBM Auto Limited and its subsidiaries (Company) have won orders for approximately 5,000 electric buses for supplying to various state transport undertakings of Gujarat, Haryana, Delhi, Telangana, Odisha, among others, and multiple Fortune 500 companies coupled with leading corporates of the country. Different applications such as city bus, staff bus, tarmac coach, etc. in both, 9 meters and 12 meters categories will be delivered for these orders.
With a healthy order book in place, the company is well placed to consolidate its position as an end-to-end electric-mobility solution provider with indigenously developed vehicle technology, battery technology and charging solutions.
Management retained full year margin guidance at 3.3% and called for a 7-8 bps sequential expansion in 2Q: The sequential guidance does not factor in any potential equity capital raise. Management expect yield on advances to expand to 9.27% in 2Q and cost of deposits to inch lower. Since incremental slippages were about ₹0.4bn, the incremental interest reversal would be about ₹0.1-0.15bn for the quarter.
Loan growth guidance for FY24 has been retained at 18-20% and deposits growth would match this outcome: Management stated that the worst of the rate war is behind us in the deposits market. Furthermore, NR deposits have started to pick up and the phenomenon of remittances not translating to deposits is starting to reverse.
Management acknowledged that the share of retail deposits has adjusted lower and would now be in the 85-88% range. For other banks, the share has stayed stable because they were at a lower base.
Overall asset quality remained under control while retail slippages rose sequentially due to the end of moratorium on restructured book: The annualised retail slippage ratio amounted to 1.92% for the quarter, up 25 bps QoQ. Of the roughly ₹2.5bn worth of retail slippages for the quarter, about 30% emerged from the restructured book. The moratorium for Covid-restructured accounts from 2021 ended in March 2023.
We maintain ‘Buy’ rating on FED with an unchanged price target of ₹175: We value the standalone bank at 1.2x FY25 P/BV for an FY24E/25E/26E RoE profile of 15.0%/15.1%/15.6%. We assign a value of ₹8.7 per share to the subsidiaries, based on SOTP.
Granules India on Friday said that the US Food & Drug Administration (US FDA) has approved its Abbreviated New Drug Application (ANDA), filed by Granules Pharmaceuticals, Inc (GPI)., a wholly owned foreign subsidiary of the company, for Acetaminophen and Ibuprofen Tablets, 250 mg/125 mg (OTC).
It is bioequivalent to the reference listed drug (RLD), Advil Dual Action with Acetaminophen Tablets, 250mg/125 mg (OTC), of GlaxoSmithKline Consumer Healthcare Holdings (US) LLC. This product will be launched through Granules Consumer Health (GCH) division.
Acetaminophen and Ibuprofen Tablets are used for temporary relief for minor aches and pains due to headache, toothache, backache, menstrual cramps, muscular aches, minor pain of arthritis.
Granules now has a total of 59 ANDA approvals from the US FDA (57 Final approvals and 2 tentative approvals).
The Advil Dual Action with Acetaminophen Tablets (OTC) brand and store brands had combined U.S. sales of approximately $70 million for the most recent twelve months based on IRI multi-outlet market data, the company said in a stock exchange filing.
Result Synopsis
HCL Technologies (HCLT) reported muted performance that was below expectation. Both, revenue growth and EBIT margin were below estimates; The Services segment (90% of revenue) was down 1.0% QoQ in cc terms. The Software segment was also down 3.1% QoQ in cc terms. The revenue growth was led by strong performance in BFSI vertical (up 5.1% QoQ in cc terms). There was sequential decline in EBIT margin (down 122 bps QoQ) led by decline in revenue and increase in SG&A. Employee attrition continues to moderate as LTM attrition was down 320 bps QoQ to 16.3%.
We believe that the long-term demand story remains intact led by IT transformation and cost optimization projects. However, the macroeconomic factors in the US and Europe remain concerning and that is reflected in clients being more watchful of the situation and consequently, that continues to impact near term revenue performance. The decline in employee attrition and improving employee pyramid should support margin in FY24. We estimate revenue CAGR of 10.4% over FY23‐25E with average EBIT margin of 19.1%. We maintain our ADD rating on the stock with revised target price of ₹1,228/share at 17.5x on FY25E EPS. The stock trades at PER of 18.3x/15.8x on FY24E/FY25E EPS.
The U.S. Federal Trade Commission has launched an investigation into ChatGPT creator OpenAI and whether the company violated consumer protection laws by scraping public data and publishing false information through its chatbot, agencies reported.
The FTC has sent OpenAI a 20-page letter requesting detailed information on its AI technology, products, customers, privacy safeguards and data security arrangements.
On the technical front, the 50 index gapped up 100 points on opening yesterday tracking global cues and marked a new life-high at 19567 as momentum persisted during the first half of the trading session. However, the index retreated from the high as selling pressure intensified in the second half. This was 5th rejection that the index faced from the intermediate supply zone from 19500-19525 failing to close higher, however the 5 DEMA continues to bolster immediate reliable support. The index is anticipated to attract bullish momentum provided the support of the average line currently trading at 19389 remains intact on a closing basis.
Supp: 19390-19320-19230
Res: 19435-19525-19600
Nifty50 scaled a new all-time high of 19567 but failed to sustain those levels. The benchmark index, however, closed higher for the day.
Key technical indicators are showing a reversal as multiple tops being are placed in range of 19,500-19560 levels over the past few days.
RSI has also reversed from higher levels and failed to cross the previous RSI peak of 78 despite the underlying index scaled an all-time high.
Bank Nifty
BANK NIFTY continued to underperform the broader markets with sharp profit booking in PSU bank index as it made a double top near 4500 levels.
The weekly candle has turned negative and the positive momentum will be above 45,000 levels only and lower top confirms further weakness.
On the downside support is placed near the 20 day SMA of 44,350 levels and can witness some bounce from the lower part of the range.
Highest call OI is at 45000 strike while on the downside the highest put OI is at 44,500 for the weekly expiry.
Wipro Ltd reported a dollar revenue decline of 2.1% in the June quarter, after Tata Consultancy Services (TCS) Ltd and HCL Technologies Ltd posted tepid numbers earlier, stoking growth concerns in India’s $245 billion IT services industry this fiscal year.
Worryingly, Wipro has forecast that its revenue could contract again in the September quarter. The country’s fourth-largest IT services firm estimates revenue could fall by 2% or improve by 1% in constant currency terms. Constant currency does not take into account exchange rate fluctuations.
Wipro’s revenue in the first quarter totalled $2.78 billion, a 2.1% sequential decline and only 0.81% better than the year-ago period. In constant currency terms, sequential growth fell by 2.8%. A Bloomberg survey of 20 analysts estimated profit to come in at $360.9 million on net sales of $2.78 billion. (Read more here)
Shares of Wipro, HCL Tech, JSW Energy, Delta Corp, Adani Green, among others, will be in focus today.
Bandhan Bank, CCL Products, Coromandel Engineering, Den Networks, GTPL Hathway, Just Dial, Kesoram Ind, Sastasundar Ventures, Tata Steel Long Products, Unichem Laboratories, Vandana Knitwear, and VST Industries are scheduled to announce their June quarter earnings today.
Asian stocks ticked higher amid a rebound in Chinese shares and bets that the Federal Reserve is approaching an interest-rate peak.
Shares rose in South Korea and Australia in early trade, while those in Japan were mixed. The gains extended the MSCI Asia Pacific Index’s weekly rally to above 4%. A measure of US-listed Chinese companies rose 2.6%, adding to the upbeat outlook as investors warm to signs of renewed efforts to bolster the economy.
Overnight, Wall Street stocks extended recent gains to end higher, with the Nasdaq rising more than 1% for a second straight day, as data showed the annual increase in US producer inflation was the smallest in nearly three years.
The Dow Jones Industrial Average rose 47.71 points to 34,395.14, the S&P 500 gained 37.88 points to 4,510.04 and the Nasdaq Composite added 219.61 points, or 1.58%, to 14,138.57.
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