TCS trades at 52-week low ahead of Q3 earnings

Country's largest IT firm, Tata Consultancy Services (TCS) traded on a 52-week low of Rs. 2313, ahead of FY16 Q3 earnings on Tuesday.

Country's largest IT firm, Tata Consultancy Services (TCS) traded on a 52-week low of Rs. 2313, ahead of FY16 Q3 earnings on Tuesday. Analysts are not expecting blockbuster results for the top IT firm.

TCS slumped down 2.05%  from its previous closing of Rs. 2363 on the BSE.

The scrip opened at Rs. 2367.95 and has touched a high and low of Rs. 2367.95 and Rs. 2313 respectively. So far 1063524(NSE+BSE) shares were traded on the counter. The current market cap of the company is Rs. 462840.81 crore.

The BSE group 'A' stock of face value Rs. 1 has touched a 52 week high of Rs. 2810 on 04-Mar-2015. The promoters holding in the company stood at 73.86 % while Institutions and Non-Institutions held 21.62 % and 4.52 % respectively. The stock is currently trading above its 200 DMA.

Federal Bank Q3 net profit at Rs 162.7 crore; Gross NPA stands at 3.15%

Total Income has decreased from Rs. 2090 crore for the quarter ended December 31, 2014 to Rs. 2086.1 crore for the quarter ended December 31, 2015.

Federal Bank has reported results for the quarter ended December 31, 2015:

The Bank has posted a net profit of Rs. 163 crore for the quarter ended December 31, 2015 as compared to Rs. 265 crore for the quarter ended December 31, 2014. Total Income has decreased from Rs. 2090 crore for the quarter ended December 31, 2014 to Rs. 2086.1 crore for the quarter ended December 31, 2015.

The bank reported Gross NPA stands at 3.15% vs 2.9% QoQ.

IndusInd Bank Q3 net profit rises 30% to Rs. 581 crore

The Bank has posted rise of 29.9% in its net profit of Rs. 581 crore for the quarter ended December 31, 2015 as compared to Rs. 447.2 crore for the quarter ended December 31, 2014.

IndusInd Bank Ltd  has reported results for the quarter ended December 31, 2015:

The Bank has posted rise of 29.9% in its net profit of Rs. 581 crore for the quarter ended December 31, 2015 as compared to Rs. 447.2 crore for the quarter ended December 31, 2014.

The bank's total income has increased by 7.54% at Rs. 3,766.7 crore for the quarter against Rs. 3,086 crore in the corresponding quarter of the previous year. 

IndusInd Bank Ltd is currently trading at Rs. 919.25, down by Rs. 18.35 or 1.96% from its previous closing of Rs. 937.6 on the BSE.

The scrip opened at Rs. 937 and has touched a high and low of Rs. 942 and Rs. 915.05 respectively. So far 1129788(NSE+BSE) shares were traded on the counter. The current market cap of the company is Rs. 55660.53 crore.

The BSE group 'A' stock of face value Rs. 10 has touched a 52 week high of Rs. 988.5 on 31-Jul-2015 and a 52 week low of Rs. 784.45 on 12-Jun-2015. Last one week high and low of the scrip stood at Rs. 952 and Rs. 922 respectively.

The promoters holding in the company stood at 14.98 % while Institutions and Non-Institutions held 53.8 % and 20.3 % respectively.

The stock is currently trading above its 50 DMA.

TCS Q3 earnings: 5 things to look out for

Tata Consultancy Services (TCS) will release its financial results for the quarter ending December 2015 on Tuesday, January 12. Here are 5 things to look out for in the IT company's result.

Tata Consultancy Services (TCS) will release its financial results for the quarter ending December 2015 on Tuesday, January 12. Here are 5 things to look out for:

Revenue Growth and Operating Margin: TCS' revenue growth had been a disappointment during the last quarter, as it failed to meet analysts' expectations. However, the operating margin in Q2 improved by 78 basis points sequentially to 27.1%. IIFL estimates a 2.2% revenue growth in Q3 quarter-on-quarter.

Chennai floods impact: Incessant Chennai floods impacted the routine operations of the company for almost a week. It had to shut down its offices for more than three days and had to initiate the Business Continuity Plan in order to keep up with the critical operations. This resulted in the company issuing pre-results warning for the quarter ending December 2015. As per earlier estimates, IIFL had seen overall revenue of TCS to be impacted by 1 percent due to the Chennai floods.

Diligenta and decline in BFSI clients: At the Q2 earnings conference, N Chandrasekaran expressed concern over its Japan and Diligenta business stressing that Diligenta may decline further. Moreover the company’s inability get more business from big banks, as clients in banking, insurance and financial services is a matter to watch out for in this quarter.

Digital Space and Acquisitions: The company earlier said that it has built and deployed a new Learning Platform to enable Digital training for 100,000 employees for FY16. In the first quarter of this financial year, the company generated about 12.5% of revenue from client spending in the digital space. Last month, TCS signed close to $4 billion deal with Dell Inc for Perot Systems. Digital Space is expected to uplift TCS’s numbers in the last quarter.

Attrition Rate: The attrition rate (LTM) was at 16.2% including BPS. The company expects the attrition rate to come down in Q3.

RBI increases provisions for ‘yet to fail’ CDR accounts

The loan recasts of several firms failed this year with the involved amount for the first eight months of FY16 estimated at Rs. 22,303 crore.

Reserve Bank of India has asked lenders to increase provisioning for accounts that may not have yet failed corporate debt restructuring (CDR), according to reports.

Report says that the loan recasts of several firms  failed this year with the involved amount for the first eight months of FY16 estimated at Rs. 22,303 crore.

Earlier, RBI governor Raghuram Rajan stated that he would like to see banks clean up their books by March 2017.

L&T Construction wins orders worth Rs.1,247 crore

The construction arm of Larsen & Turbo has won orders worth Rs. 1247 crores in the Building & Factories and Power Transmission & Distribution Business.

Larsen & Toubro Ltd is currently trading at Rs. 1197.45, up by Rs. 22.65 or 1.93% from its previous closing of Rs. 1174.8 on the BSE.

The construction arm of Larsen & Turbo has won orders worth Rs. 1247 crores in the Building & Factories and Power Transmission & Distribution Business.

The scrip opened at Rs. 1185 and has touched a high and low of Rs. 1199.95 and Rs. 1185 respectively. So far 710380(NSE+BSE) shares were traded on the counter. The current market cap of the company is Rs. 109399.11 crore.

The BSE group 'A' stock of face value Rs. 2 has touched a 52 week high of Rs. 1892.95 on 04-Mar-2015 and a 52 week low of Rs. 1145.5 on 11-Jan-2016. Last one week high and low of the scrip stood at Rs. 1269 and Rs. 1145.5 respectively.

The promoters holding in the company stood at 0 % while Institutions and Non-Institutions held 55.28 % and 42.36 % respectively.

The stock is currently trading above its 200 DMA.

Rupee opens 2 paise lower at 66.79/$

On macroeconomic front, Chinese inflation numbers came in line with estimates. CPI numbers for December came out at +1.6%, while PPI fell at an annual rate of 5.9%.

Indian Rupee opened lower at 66.83/$, lower by 2 paise in early trade on Tuesday as against the previous close of 66.81/$. Indian rupee moved lower against the greenback, influenced by safe haven demand for the greenback. Turmoil in Chinese equities also took a toll on the emerging market currencies. Comment by Chinese Premier Li has aggravated the bearish sentiment.

On macroeconomic front, Chinese inflation numbers came in line with estimates. CPI numbers for December came out at +1.6%, while PPI fell at an annual rate of 5.9%. Market focus will be now accentuated on slew of Chinese macro numbers releasing on 18th and 19th of January.

On Monday, the Indian currency ended at 66.81, weaker by 18 paise from its previous close of 66.63 on Friday. The currency touched a high and low of 66.92 and 67.07 respectively. The Reserve Bank of India’s (RBI) reference rate for the dollar stood at 66.78 and for Euro stood at 72.92 on January 11, 2016. While, the RBI’s reference rate for the Yen stood at 56.93, the reference rate for the Great Britain Pound (GBP) stood at 97.0570.

Q3 FY16 Preview for IT: Traditionally a weak quarter

Weakness in revenue growth would get reflected in operating margins for most players as operational levers such as utilization, SG&A leverage and offshore shift would be elusive for extraction.

The third quarter of a fiscal year has traditionally been a weak period for India IT companies characterized by lesser number of working days and furloughs at the client’s end. This time around some many companies would face additional growth headwinds on account of general weakness in the energy and telecom verticals and client specific setbacks. A couple of large companies have also alarmed about growth being impacted materially due to the Chennai floods which temporarily disrupted execution from the centers located there. The further strengthening of dollar against other functional currencies would lower reported sequential revenue growth by 40-70bps.
 
We broadly see large IT companies under our coverage to report qoq dollar revenue growth in the range of 1-2% in constant currency terms with HCL Tech and Tech Mahindra delivering near the upper end. Amongst the mid-sized players, we estimate Cyient to deliver a strong growth of 4-5% qoq while Mindtree would report a muted 1% qoq growth as seen in the preceding years. In line with its latest commentary, Infosys would deliver a tepid growth of 1.4% qoq in CC terms during Q3 FY16 due to seasonality and lower spending by top clients. TCS has already published that disruption at its Chennai facility (one of its largest delivery locations with over 65,000 employees) is likely to have a material impact on revenues of the quarter. For Wipro, apart from impact of this event (22,000 employees in Chennai), persistent weakness in Energy vertical (15% of revenues) would be a headwind pushing growth delivery towards the lower end of guidance (0.5-2.5%). Tech M may also report a moderated growth in Q3 FY16 on the back of consolidation within customers which has driven slowdown in decision making.
 
Weakness in revenue growth would get reflected in operating margins for most players as operational levers such as utilization, SG&A leverage and offshore shift would be elusive for extraction. Despite the likely 30-40bps benefit from the depreciation of rupee, we expect 20-60bps qoq reduction in operating margin for our coverage companies barring Tech Mahindra (25 bps expansion), Persistent (20 bps expansion) and Cyient (40 bps expansion).  
 
We continue to maintain a Neutral view on the sector as the investment risk-reward currently is in balance. Large caps are fairly priced at 13-17x FY17 P/E for an estimated modest earnings CAGR of 8-12% over FY15-17. However, significant rupee depreciation could be a positive earnings catalyst in the near-to-medium term. Our preferred picks in the sector are HCL Tech, Infosys and Mindtree.

Railways in talks with NBCC to modernise 2 stations

The Railways is already working on modernising a few stations such as Brijawasan and Anand Vihar in Delhi and Habibganj in Bhopal, according to Sinha.

The Railways is in talks with National Buildings Construction Corporation Ltd. (NBCC) to redevelop two stations — Gomtinagar in Lucknow and Bhubaneswar in Odisha, the Minister of State for Railways, Manoj Sinha, said on Monday.

It will be a turnkey project, but the size of the deal, among other details, is yet to be worked out, he told a business daily.

Both projects are part of the Railways’ plans to modernise as many as 400 stations.

The Railways is already working on modernising a few stations such as Brijawasan and Anand Vihar in Delhi and Habibganj in Bhopal, according to Sinha.

The Bhubaneswar station is being redeveloped with NBCC, Sinha said. 

Anoop Kumar Mittal, CMD of NBCC, told the financial newspaper that talks were still on with the Railways for Lucknow and Bhunameswar stations.

“It will most likely be a turnkey project. The size of the project has not been worked out yet as Detailed Project Report (DPR) will be prepared after preliminary discussions are over,” he said.

NBCC is also in talks with the Railways to modernise other stations, Mittal said.

“The Railways wants to modernise 400 stations and NBCC is one company that has the required experience with respect to redevelopment projects,” Mittal said.

Adani to boost Udupi Power capacity to 2,800 MW

UPCL had signed power PPA with Karnataka to sell 90% of generated power while the balance 10% was to be sold to Punjab.

Adani Power is set to expand the capacity of Udupi Power Corporation (UPCL) to 2,800 MW from the present 1,200 MW at an estimated investment of Rs. 11,500 crore, reports a financial newspaper.

The company plans to set up two more units of 800 MW each near Udupi to raise capacity, according to the daily.

It may be recalled that Adani acquired UPCL from Lanco Infratech early last year at an enterprise valuation of INR 6,300 crore.

“We have just received the approval from the State High Level Clearance Committee (SHLCC) of Karnataka government for our proposal. We will be signing a MoU with the state government very soon. We still require many other approvals including one from the ministry of environment,” UPCL ED Kishore Alva told the newspaper.

He said that the company would be funding the project through a mix of debt and equity, yet to be decided.

“The debt to equity ratio will be decided once we sign a power purchase agreement (PPA) with the state government,” Alva said.

For the first phase of the project, UPCL had borrowed 76% of the project cost of INR 5,800 crore from a consortium of bankers, led by Power Finance Corporation (PFC).

Currently, UPCL is generating 1,200 MW thermal power using imported coal at Nandikur near Udupi in Karnataka and the entire power is supplied to electricity companies in the state.

UPCL had signed power PPA with Karnataka to sell 90% of generated power while the balance 10% was to be sold to Punjab.

Results for the day:TCS, IndusInd Bank among others

The results which are expected today are Tata Consultancy Services, IndusInd Bank, DCB Bank, Federal Bank.

The results which are expected today are Tata Consultancy Services, IndusInd Bank, DCB Bank, Federal Bank, Focus Industrial Resources, Mahavir Industries, Upsurge Investment & Finance and VMV Holidays.

Tata Consultancy Services Ltd ended at Rs. 2363, down by Rs. 34.25 or 1.43% from its previous closing of Rs. 2397.25 on the BSE. The scrip opened at Rs. 2396.45 and touched a high and low of Rs. 2396.45 and Rs. 2349.9 respectively. A total of 1497897(NSE+BSE) shares were traded on the counter. The current market cap of the company is Rs. 462840.81 crore.

IndusInd Bank Ltd ended at Rs. 937.6, down by Rs. 9.65 or 1.02% from its previous closing of Rs. 947.25 on the BSE. The scrip opened at Rs. 932 and touched a high and low of Rs. 942.15 and Rs. 929 respectively. A total of 1249476(NSE+BSE) shares were traded on the counter. The current market cap of the company is Rs. 55660.53 crore.

TCS, Tata Motors, IDFC Bank among 16 Stocks in focus today

Check out the companies which will be in focus during trade today based on recent and latest news developments.

Tata Consultancy Services: The IT company will announced its Q3 results today. IIFL estimates the net revenue of the company to be Rs. 27,766 for Q3 FY16, a 13.3 % growth y-o-y and a 2.2 % growth on q-o-q basis. The EBIDTA margin is expected at 28.6 bps, a 0.2 % change on both y-o-y and q-o-q basis. The Q3 Net Profit is expected to be at Rs. 6139.7, registering a growth of 12.8 % on the y-o-y basis while 1.4 % growth on the quarterly basis.

IDFC Bank: The Bank has acquired 10% stake in ASA International India Microfinance for about Rs. 8.5 crore, according to reports. ASA International India is a division of Dhaka-headquartered ASA, which operates in over 12 countries.

Tata Motors: Tata Motors, part of conglomerate Tata Group, declared its sales volumes for the month of December 2015. The Group, which owns brands like Jaguar and Land Rover, witnessed Global sales at 91,762 units, a growth of 7% YoY. Cumulative wholesales for the fiscal were at 7,54,307 units, a surge of 6% YoY.


Omax Autos: Omax Autos has sold its remaining 51% stake in its subsidiary Company Gmax Auto Ltd.

PI Industries Limited: PI Industries Limited has commenced the Commercial Production at its 3rd Unit located at Sterling SEZ facility, Jambusar in State of Gujarat w.e.f. January 11, 2016.

Indian Bank: Indian Bank has announced that pursuant to the Bank's Strategic Plan discussed by its Board on October 26, 2015, the Bank is proposing to seek the approval of its Board in the ensuing Board Meeting to be held on January 19, 2016 to permit the Bank to raise Basel III compliant Tier II Bonds for Rs. 1100 crore in one or more tranches in the current or subsequent years based on the requirement.

Aurobindo Pharma: The pharma company has received approval from the US Food and Drug Administration (FDA) to manufacture and market generic Norethindrone Acetate tablets in the American market.

Bharti Airtel Limited: Bharti Airtel Limited announced the commercial launch of its high speed 4G services (also called LTE) in Hosur.

Vivimed Labs: Vivimed Labs Ltd has announced that the Board of Directors of the Company at its meeting held on January 11, 2016, approved the sub division proposal of Company's Equity Shares from the existing face value of Rs. 10/- per Equity Share to Rs. 2/- per Equity Share subject to the approval of Company's shareholders, which is proposed to be obtained through Postal Ballot & E-Voting.

Aurobindo Pharma: The pharma company has received final approval from the US Food & Drug Administration (USFDA) to manufacture and market Norethindrone Acetate Tablets USP, 5mg.

Bharat Heavy Electricals Limited: The company has achieved one more significant milestone in the capacity addition programme of the country by successfully commissioning a 520 MW coal-based thermal generating unit in Andhra Pradesh.

Tata Steel: The company registered Hot Metal and Crude Steel production of 2.69 million tonnes (up by 13.1% y-o-y) and 2.55 million tonnes (up by 11.3% y-o-y) respectively for Q3 FY’16. Saleable Steel production was higher by 13.1% y-o-y (to 2.51 million tonnes), and Sales increased by 10.3% yo-y to 2.35 million tonnes in Q3 FY’16.

Suzlon Energy: The company has signed a binding term sheet and received advance payment for execution of 197.40 MW from a renewable energy Independent Power Producer.

Reliance Power: The company said electricity regulator CERC (Central Electricity Regulatory Commission) has approved an increase of 9 paise per unit, or 7 per cent, in tariff over its 25-year power purchase agreement for the 3,960 MW Sasan ultra mega power project (UMPP) that translates into a compensation of over Rs 300 crore per annum.

NIIT Technologies: The company has entered into an over Rs 226 crore pact with UK communications regulator Ofcom for providing information and communications technology (ICT) services.

Gayatri Projects Ltd: The company is considering the corporate restructure of its road assets, which may mean hiving of its roads business as a separate entity.

Sensex, Nifty to open on a weak note

Crude oil fell 6% but Dow and S&P managed to break a three-day losing streak recovering from last week's brutal rout. On the other hand, the Nasdaq closed modestly lower, falling for the eighth consecutive session.

The Nifty’s inability to conquer previous peak of 7979 led to a sharp reversal with the sliding index now on the verge of violating previous support of 7540. Investors are feeling uneasy with the sinking feeling. With uncertainty and chaos in global markets, a fall below 7540 on closing basis would result in a breakdown from a descending triangle pattern on the long term charts. For index to reverse current predicament, pullback from lows has to sustain above 7750 for consecutive days. If global cues support later in the day, it could well happen.

The opening is set to be weak at start. Results will be in focus as TCS announces its numbers. TCS has already published that disruption at its Chennai facility (one of its largest delivery locations with over 65,000 employees) is likely to have a material impact on revenues of the quarter. The third quarter of a fiscal year has traditionally been a weak period for India IT companies characterized by lesser number of working days and furloughs at the client’s end.

Crude oil fell 6% but Dow and S&P managed to break a three-day losing streak recovering from last week's brutal rout. On the other hand, the Nasdaq closed modestly lower, falling for the eighth consecutive session.

Moody's Investors Service expects India (Baa3 positive) to remain among the world's fastest growing major economies in 2016, but believes market trends this year will depend on whether inflation remains under control and corporate profits revive.