Tale of the Tape 

Good evening everyone. Have a great weekend!

The “buy the dip” gang was in full action today as Nifty and Sensex roared back from their opening weakness to close at the day’s high. PS - we still ended in the red on a weekly basis but atleast it wasn’t so bad. Midcaps (+0.3%) and Smallcaps (flat) traded mixed but continued to outperform on the weekly and monthly timeframes. The advance-decline ratio was split evenly. Check out the Stocktwits Sentiment Meter:

IT (-1.5%) and FMCG (-0.5%) stocks saw profit booking. On the other hand, Banks and NBFCs single handedly drove the markets higher; +1.5% each.

Infosys (-4.5%) was an eye soar after its disappointing Q2 results. Axis Bank (+6%) was the top gainers on Nifty. More details below.

Waaree Energies IPO opens for subscription on Monday. Check out our analysis below to help you decide whether to apply or not?

Gas distribution companies dropped like flies on reports of lower gas allocation under the new mechanism. Check out their charts below.

Manappuram Finance (-14%) was the top loser on NSE500 after the Reserve Bank of India banned its subsidiary Asirvad Finance from issuing new loans.

Results reaction. Wipro rose +4% on better than expected Q2 results. Zee Entertainment (+4%) posted a 70% YoY jump in Net Profit.

LTIMindtree (-6%) was under pressure on weak results and brokerage downgrades. PS- Citi has a “Sell” rating on the stock and sees a further -5% correction from current levels.

Zomato cracked -4% after the company said it will consider raising funds. PS - the company already has Rs 10,000 cr in cash.

Mazagon Dock Shipbuilders rallied +7% intraday. The company will consider the proposal of a dividend and stock split at its board meet on Oct 22.

Here are the closing prints:

Earnings
Earnings Roundup

Infosys cracked -4% on disappointing Q2 results. The firm’s top line growth was slightly higher than Street estimates, with ALL verticals except retail growing QoQ. FYI - the key BFSI segment also posted its best growth in seven quarters.

On the flipside though, margins were flat and missed expectations, which in turn meant the bottomline was a miss. Also, total contract value of its new deals fell -42% QoQ and -69% YoY to $2.4 billion. That’s rough.

Yes, Infosys did raise its full year-revenue growth forecast to 3.75% -4.5% vs 3%-4%. But, this also missed estimates, with analysts forecasting a 4%-5% growth.

Here is its Q1 report card:

• Revenue: $4.89 billion; +3.1% QoQ in CC terms (vs Est: 3%)

• EBIT Margin: 21.1% vs 21.1% last quarter

• PAT: Rs 6,506 cr; +5% YoY (vs Est: Rs 6,806 cr)

Big Picture: A decent Q2 show, but nothing to write home about. There’s been a clear pick-up in client spending, but we’re still FAR away from where we used to be. The problem for the stock is that IT firms have seen a decent run in the last few months. Rallying further from current levels requires more encouraging signs. 

Infosys is +21% YTD.

Axis Bank (+6%) was the top Nifty gainer on solid Q2 results. Deposit growth of +14% YoY beat out a bump in advances (+11% YoY), which is good news. Strong credit demand across verticals boosted core lending income. Its asset quality also improved, which is a big W after the scare we got in Q1.

Its net margins did decline to 3.99% vs 4.11% last year, although this was due to a one-time tax gain. FYI - this one-off also boosted the bottomline, which would look a little more modest otherwise.

Here is its Q1 report card:

• Net Interest Income: Rs 12,234 cr; +9% YoY

• PAT: Rs 6,918 cr; +18% YoY (vs Est: Rs 6,527 cr)

• Gross NPA: 1.44% vs 1.73% last year

• Net NPA: 0.34% vs 0.36% last year

Big Picture: Overall, a satisfactory Q2, with big positives including a reduction in bad loans + deposit growth. Today’s stock movement is mostly because Axis has underperformed for most of 2024. We’ll need to wait a few more quarters before declaring everything is completely OK, which is why most experts are divided.

Axis Bank is +9% YTD.

Stocktwits Specials
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