Good performances by most information technology (IT) companies in the September quarter and improved forecasts notwithstanding, with the exception of Infosys, stocks of IT biggies such as TCS, Wipro and HCL Technologies have fallen three to nine per cent since Infosys announced its earnings on October 11.
Banking stocks, including top ones like State Bank of India, ICICI Bank, HDFC Bank, Bank of Baroda and Bank of India, among others, have fallen sharply in the last one month.
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Q1 results indicate more pain ahead, as slowdown has spread to more sectors, pricing power has come down and rising interest cost is eating into profits.
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While cost pressures could partly offset the expected gains, given the currency hedging by companies the gains will not accrue immediately.
Interview with CMD, Motilal Oswal Financial Services
Given the strong prospects in the business, analysts expect the company to clock healthy growth of 15-20 per cent, going ahead.
Demand low, regulatory issues seen as bigger hindrances.
Sales growth slows but expenditure control, lower interest burden save the day.
Earnings and financial condition of only a few companies influencing sentiment.
The Indian capital markets have seen far-reaching changes in the last 20 years. Take, for instance, the quantum of wealth created. Total market capitalisation has shot up from Rs 68,870 crore (the value of 1,191 companies listed on the Bombay Stock Exchange or BSE) in 1991 to Rs 59,84,875 crore (the value of over 4,000 companies listed on the BSE as on August 29, 2011).
Good growth prospects and reasonable valuations will help select mid-caps deliver superior returns, say experts.
Analysts believe there could be some pressure on banks' margins in the interim.
While TCS and HCL Tech remain the favourites of most analysts, the latter believe there could be more pain left for Infosys' stock.
While most analysts had valued Reliance Capital's stake in Reliance Life Insurance at Rs. 285 per share, or about Rs. 7,000 crore, this deal values it at Rs. 468 per share of Reliance Capital, which is a huge premium.
Aggregate figures for a sample of 43 companies (excluding oil & gas PSUs as well as those in the banking, telecom and software sectors) in the BSE 100 index suggest that operating profit margins (OPMs) were down by 63 basis points (bps) year-on-year in the December quarter and that there appears to be no major causes for concern.
While iGate leaps into the $1-billion club, the combined entity will have a larger offering, better pricing power and scope to improve margins. Nasdaq-listed software firm iGate's acquisition of Patni Computer Systems was received positively by the market. On a day when the Sensex was down 2.4 per cent, the Patni scrip closed 0.8 per cent higher at Rs 463.85.
There are four nodes and each of these, like Dronagiri, is also formally termed an SEZ, all part of the NMSEZ.
Rising competition and costs are likely to keep profitability of brokerage firms under pressure, leading to consolidation.
Restated numbers are better than the Street's expectations.
The two arms of L&TFH are L&T Finance, with its retail, micro-finance and corporate loan portfolio, and L&T Infrastructure Finance.
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