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Nifty and Sensex jumped +0.8% each led by strong gains for IT stocks. Meanwhile, Midcaps were flat, while SmallCaps (+0.2%) poster minor gains. The advance-decline ratio was in Favour of bears (3:2).
It was a mixed-bag kinda day for sectors. IT (+4.5%) was the top winner, while oil & gas (+0.6%) and FMCG (0.4%) saw more modest gains. Meanwhile, Real Estate (-1.5%) and PSU banks (-0.5%) witnessed selling pressure.
TCS (+7%) rocketed to the moon after investors went nuts over its q1 results.
Oil India gained +8% after Morgan Stanley upgraded its target price to Rs. 663 p/sh; +11% upside after today's rally. ABB India (3%) fell after UBS downgraded the stock to 'neutral' citing expensive valuations.
After reports said it would invest $1.2 billion in its vizhinjam port in Kerala, Adani port was in focus.
Zee Entertainment rallied +7% intraday after it said its board would consider raising funds on July 16.
Cyient gained +4% after it announced an expansion of its semiconductor biz with a new subsidiary.
TCS QI RESULT ANALYSIS
TCS kicked off the earning season in style, rallying +7% to end as the top nifty gainer. While its Q1 results were solid, we may need to wait for a quarter or two more before declaring FY25 the year of recovery.
First the positives, the company's Q1 topline beat street estimates, while the bottom line was inline. FY1 - profit growth was strong, adjusted for the salary hikes in Q1. Most importantly, all major markets & key verticals returned to growth on a sequential basis. Finally, TCS also reported a positive net headcount addition of 5452 for Q1. This reverses a decline that we have seen for three quarters in a row!
There are the negatives, on YOY basis, the North American market still shrank -1.1%, and the BFSI segment declined -0.9%. These are TCS's two key engines: which means that while the company may have bottomed out, we still aren't near its golden era! on top of this, the order pipeline doesn't look great. Order wins for Q1 came in at $8.3 billion, a big drop from $13.2 billion recorded in Q4FY24 (& $10.2 billion YoY). Finally, the management seems super cautious and unsure whether Q1 topline growth is sustainable.
Here are its key Q1 stats:
- Revenue: $7.5 billion, +2.2% QoQ in CC Terms
- Net Profit: Rs. 12040 cr, +8.7% YoY (vs Est: Rs 11989 cr)
Big picture: TCS's Q1 results were good but not +7% kinda-great. Markets are just happy that they didn't miss estimates. Additionally, hopes of a rate cut later this year + A1-driven growth and efficiency boost are key positives. Jefferies has upgraded its target price to Rs. 4615, p/sh (+14% from current levelsA1-driven).
| NIFTY | 24503 | +0.8% |
| SENSEX | 80519 | +0.8% |
| BANK NIFTY | 52270 | Fla |
