Dear Reader,
The Panorama newsletter is sent to Moneycontrol Pro subscribers on market days. It offers easy access to stories published on Moneycontrol Pro and gives a little extra by setting out a context or an event or trend that investors should keep track of.
The March quarter earnings season is shaping up to be a tough test of investor resilience in the face of expectations running ahead of earnings so far. Infosys’s shares are down by 10.7 percent as its domestic shares play catch-up with the fall in its ADR shares on Friday, as local markets were closed. Even a weekend of rumination was not enough to convince investors that things were not too bad for the company. Not surprisingly, software stocks are down in the dumps as investors turn wary of their prospects in the coming quarters. It’s not just software, however. Even HDFC Bank’s results appeared to have not met investor expectations, with its shares down by 1.9 percent at 12 pm.
In fact, HDFC Bank’s results were good as Neha Dave writes in today’s edition: “The largest private sector bank posted yet another strong and steady earnings performance in the fourth quarter of FY23. Net profit increased 20 percent year on year (YoY) in Q4 FY23 aided by healthy loan growth and lower provisions/credit cost even as operating expenses soared. Asset quality continued the uptrend, underscored by the decline in the non-performing asset (NPA) ratio and restructured loans.” Its valuations are reasonable too although the near-term stock movement is likely to be influenced by external events. The Street appears to be expecting more from its numbers, however.
Infosys and TCS both have a case of profitability being under the weather, writes R Sree Ram, as companies raced to build capabilities to cater to the post-pandemic spurt in demand, investing for growth. That was the right thing to do then, but the altered business landscape has suddenly made them look vulnerable on the costs front. They are indeed cutting costs but for a sustained improvement in margins, they need two factors to work in tandem. What are these? Do read to know.
Meanwhile, there is the question of what to do with the beaten-down Infosys stock now. When stocks are battered like this, two divergent views exist—one that says buy at lower levels and wait while another says don’t lunge to grab a falling knife. Here’s Madhuchanda Dey’s take on the subject.
IT stocks and HDFC Bank have soured the market mood at the start of the week. But a good piece of news is FIIs appear to have turned bullish on Indian equities. What factors are driving this change in sentiment? Is inflation no longer a cause for concern? Our columnist Ananya Roy analyses the data and context and writes that while the change in sentiment can’t be taken for granted, it should not be ignored either. Read here to know what investors must do.
At times like these, the wisdom of veteran stock pickers is what investors would be looking out for. S Naren, executive director and chief investment officer of ICICI Prudential AMC, has penned his views on the Indian markets, citing the time and price correction that has taken place in the past 18 months, the relative strength of the Indian economy but also the macroeconomic backdrop that will influence market direction. Their house view is to invest in equities in a staggered manner, the earnings outlook appears positive, given easing input cost pressures and they have a positive view on domestic cyclicals. Which sectors should you invest in? Which MF categories to invest in? What about debt investors? Read to know Naren’s views.
Investing insights from our research team
Is the sugar cycle turning favourable?
Delta Corp Q4 FY23: Final quarter weak, but full-year picture shows improvement
What else are we reading?
Chart of the Day: States put their shoulder to capex wheel
The Eastern Window: Is Bhutan warming up to China?
Justice denied, for the most part
Can K Annamalai change the narrative on corruption in Tamil Nadu?
Margins will fall, but to where? (republished from the FT)
Damaged Wheat Procurement: States to bear the burden of relaxed specifications
Can China contain its $8.3 billion fiscal crisis?
Prepare for AI to start writing its own dictionary
Lab meat sceptics, please just get out of the way
Technical Picks: Gold, TVS Motor, USD-INR, Axis Bank, Tech Mahindra and Welspun Corp (These are published every trading day before markets open and can be read on the app).
Ravi Ananthanarayanan Moneycontrol Pro
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
