Short Call | Sector rotation boosts realty; PVR flops, Bajaj Finance’s bumper Q3, Sobha in focus

Those who have softened their stance on the IT sector include JP Morgan.

Buy-on-dips continues to work like a charm. On Thursday, realty was the big beneficiary of the ‘rotation effect’ as money is rapidly moving out of one sector into another.

The focus now shifts to the IT services sector as heavyweights Infosys and TCS get ready to unveil their quarterly numbers. With the Fed signalling that the possibility of further hike is remote, and that it may actually start cutting rates, the outlook for the US economy, and by extension for Indian IT names has improved. Those who have softened their stance on the IT sector include JP Morgan. “We turn neutral on the sector as we see signs of growth bottoming out over the next few months which could support expanded sector multiples,” said the report by JP Morgan.

The stock features among top F&O losers, trading below its 50-DMA but above 200-DMA

Bull case: Content lineup for new year looks strong. F&B revenues have been driving topline. Offerings like drive-in theatres, luxury spaces, cricket match viewings can fetch better margins.

Bear case: Occupancy levels still below pre-Covid level. Covid and OTT releases have changed people's viewing habits, which could be difficult to overturn. FIIs have reduced stake.

The stock gained on Rs 47,000-crore investment in renewables, electricity distribution in Gujarat

Bull case: Power as a theme continues to do well. Cheaper than Tata Power

and JSW Energy on a trailing basis. Expects to commission 300MW each of solar and wind power by FY24 and FY25.

Bear case: The stock gapped up in yesterday's session and market usually fills all gaps, so a downtrend is possible. DII and FII stake has barely moved in the past four quarters. Operating margins inconsistent.

Market cheered the stock after the company issued a strong business update for Q3.

Bull case: The company has shown the ability to maintain growth rate even as its base gets bigger. Stock among the premium names in the sector.

Bear case: Valuations reasonable as expected of a top-tier company, but leaves little scope for a huge rerating in the near term. RBI is trying to temper the rapid growth in unsecured loans. Jio’s arrival has increased competitive.

The stock has fallen nearly 6 percent in the past five days.

Bull case: Improving growth in SAP digital, data, vendor consolidation and ramp-up of deal wins will boost revenue growth in the long term. Valuations attractive compared to peers.

Bear case: The company received a tax demand of Rs 206 crore from the GST department on Thursday. Also, in an uncertain environment for IT, investors may opt for companies with better earnings visibility even if it means paying a premium.

The stock has surged 16 percent on Wednesday. Foreign investor Dendana Investments Mauritius picked up 5.09 lakh shares at Rs 1269.57 apiece.

Bull case: Motilal Oswal has rated it among its top picks for 2024. The company is focusing on unlocking its land reserve, balance sheet is good shape as debt has reduced.

Bear case: Still slightly behind peers in terms of pre-sales growth, net debt reduction expected to be slower due to increased land and construction spends.