Morning Alerts
Q3 earnings season kicks off: TCS revenue rises 19%, net profit up 11%
For a traditionally weak Q3 quarter, India’s largest IT services and technology firm Tata Consultancy Services (TCS) managed to report a strong performance, even as the impact of a challenging global macroeconomic environment was evident on deal flows. For Q3FY23, TCS reported 11 per cent year-on-year (YoY) growth in net profit, which stood at Rs 10,846 crore. Revenue for the quarter came in at Rs 58,229 crore, up 19.1 per cent YoY in reported terms and 13.5 per cent YoY in constant currency terms. Sequentially, revenue was up 5.2 per cent. Though TCS beat the Bloomberg estimate on revenue (Rs 57,207 crore), the company could not meet the net profit expectation (Rs 11,064 crore).
India’s fuel demand hits 9-month high in Dec due to uptick in PV sales
India’s fuel demand reached a nine-month high in December, helped by strong industrial activity and a rise in gasoline consumption due to an uptick in passenger vehicle sales. Consumption of fuel, a proxy for oil demand, was about 4% higher than the previous month, and rose 3.1% year-on-year to 19.60 million tonnes in December, data from Indian oil ministry’s Petroleum Planning and Analysis Cell (PPAC) showed on Monday. “Demand in India, the third largest consumer, was growing the fastest among major economies in 2022,” said UBS analyst Giovanni Staunovo, and that “solid economic growth should see Indian demand expanding also at a solid pace this year.”
India overtakes Japan to take third spot among largest vehicle markets
India has overtaken Japan to become the third largest vehicle market in 2022 after China and the US, selling more than 4.25 million vehicles riding on pent- up demand and enhanced production by carmakers. According to the Society of Indian Automotive Manufacturers (SIAM), 4.13 million vehicles — including passenger and commercial — were sold in the country between January and November 2022. SIAM releases quarterly data on commercial vehicles, and thus numbers for the October-December quarter are awaited for the segment. Also, original equipment makers (OEMs) like Tata Motors (TML) have shifted to quarterly reporting of both wholesale and retail sales numbers. So Tata Motors data is awaited. However, as the country’s largest passenger car player, Maruti Suzuki India, has reported its December domestic sales figures (113,535 units, excluding sales to other OEMs), the overall sales in India have crossed the 4.25-million mark.
Commodity play
Gold – Rs 56053/10gm, Silver – Rs 68575/kg, Brcrude – Rs 6044/barrel, Degumsyoil – Rs 1296/10kg, Copper – Rs 749/kg.
Corporate News
HDFC Capital achieves $376-mn initial close for scheme 2 of H-CARE 3.
NCLT rejects Torrent’s plea to halt RCap’s CoC voting for second auction.
PVR aims to operate 1,000 screens by FY24-end, invest Rs 300 cr: JMD.
SGX Nifty indicates negative start to Indian markets trading at 18120 levels down by 0.29% or 52.5 points. Dow Jones also ended yesterday`s session in red down by 0.34% at close.
Sector in focus – Banks, IT, Chemicals & Automobiles.
Corporate Action
KFin Technologies will make its debut on the BSE and NSE on December 29. The issue price has been fixed at Rs 366 per share.
Dividend
11-Jan-23
WELENT: Special Dividend – Rs. – 7.50
16-Jan-23
TCS: Interim Dividend – Rs. – 75.00
Buyback
Softsol India: Ex-Date: 13-Jan-23
Bonus
KPI Green Energy: Bonus Issue 1:1; Ex-Date: 18-Jan-23
Stock Split
Rajnish Wellness: Stock Split From Rs. 2/- to Rs. 1/-; Ex-Date: 10-Jan-23
Vishnu Chemicals: Stock Split From Rs. 10/- to Rs. 2/-; Ex-Date: 13-Jan-23
Deep Diamond India: Stock Split From Rs. 10/- to Rs. 1/-; Ex-Date: 20-Jan-23
Rights Issue
Jet Freight Logistics: Ex-Date: 11-Jan-23
Pacific Industries: Ex-Date: 11-Jan-23
Indowind Energy: Ex-Date: 13-Jan-23
Anjani Portland Cement: Open: 30-Dec-22; Close: 19-Jan-23
Indowind Energy: Open: 27-Jan-23; Close: 10-Feb-23
Amalgamation
JMC Projects (India): Ex-Date: 11-Jan-23
Stocks in Action
HCL Technologies: HCL Technologies is structured around three categories of service offerings including IT and Business Services (ITBS), Engineering and R&D Services (ERS), and Products & Platforms (P&P). Globally, IT spending is concentrated on cloud. By 2025, 51% of enterprise IT budgets are forecasted to be cloud related, surpassing non-cloud spending. The shift in the role of cloud is driven by evolving consumer expectations, global connectivity, digitization, and data, all of which are changing the way enterprises compete and behave. To help organizations thrive and meet market demands in this constantly shifting environment, HCL Tech works with the world’s leading technology providers to address complex operational and business challenges. In Q3FY23, HCL Tech is expected to report healthy revenue and net profit growth which could be ahead of peers. Margins are expected to improve on the back of rupee depreciation and lower attrition rate. Positive on HCL Technologies given the compelling valuation and expectation of healthy revenue and profit growth in Q3FY23.
Deepak Fertilisers and Petrochemicals: Deepak Fertilisers and Petrochemicals is among the India’s leading manufacturers of industrial chemicals and fertilisers. With a strong presence in Technical Ammonium Nitrate (mining chemicals), Industrial Chemicals and Crop Nutrition (fertilisers), the Company supports critical sectors of the economy such as infrastructure, mining, chemicals, pharmaceutical and agriculture. It is leading manufacturer and marketer of Iso Propyl Alcohol (IPA) in India and largest manufacturer of Nitric Acid in South East Asia. The Company is developing specialised grades of Nitric acid and IPA to meet specific requirements to cater needs of the industry/consumer. The company reported robust performance in Q2FY23 with revenue growth of 55% and PAT grew by 3x on YoY basis. The Company has signed a binding 20-year agreement with Aarti Industries for the supply and offtake of nitric acid valued at Rs 8,000 crore. Positive on Deepak Fertilizer and Petrochemical given the strong set of Q2FY23 numbers and healthy order book.
