Tale of the Tape 

Good evening everyone. It was a pretty boring day in the markets!

Nifty and Sensex ended flat after a range-bound trading session. The broader markets were hit by selling pressure though, with Midcaps (-0.6%) and Smallcaps (-0.3%) ending in the red. PS - a India-US trade deal seems unlikely by the August 1 deadline, which is kinda worrying.. It was also a wave of red across sectors with PSU Banks (-1.6%) and Real Estate (-1%) leading the sell-off.

In today’s issue, we cover Eternal’s encouraging results, the IT sector’s Q1 report card, trending charts and more.

Check out the NSE500 heatmap:

Market
Is the worst behind for IT stocks?

The IT sector has had a pretty weak Q1! Going into it, we knew the picture wasn’t gonna be pretty. With most large-cap players reporting low, single-digit growth for FY25, experts hoped FY26 would be better. But with Trump’s trade war, let’s be real, things aren't looking great. 

Here are the takeaways for the sector:

1) Topline fall: Most players -- TCS, Wipro, Tech Mahindra, L&T Tech -- reported negative revenue growth in constant currency terms. FYI - this is happening in what is traditionally the strongest quarter so it’s doubly concerning. There are two factors at play. First, US & European clients are downsizing existing projects. And two, past deal wins aren’t translating to revenue due to delays in execution.

2) Holding the margin line: Most companies either maintained margins or saw a slight bump. That’s good news, but the only problem is that it isn’t coming from more lucrative contracts. It’s coming from strict cost control measures, which isn’t sustainable. 

3) Deal wins: Almost everyone saw solid contract growth! Wipro killed it here (+24% YoY in TCV), with TCS (+13% YoY) not too far behind. Will this actually result in higher revenue streams? Your guess is as good as ours.

4) Special shoutouts: HCL was a stinker. Its topline was flat and it reported a tough -10% YoY profit drop as margins shrank. The company cut its FY26 EBIT guidance, but upped its revenue guidance to +3% to +5%. Does anyone believe it though? The stock is down a whopping -21% YTD, worse than the Nifty IT Index, so that should give you a clue. On the flipside, LTI Mindtree Q1 beat estimates with topline growth of +2% QoQ. It still isn’t great, but it definitely stands out in these rough times!

Big Picture: US and Europe are seeing MASSIVE uncertainty. Nobody knows when it will clear up. While we’re still waiting on Infosys, Coforge and Persistent, go into FY26 with low expectations and you won’t be disappointed.

Stocktwits Specials
What Next For Ola Electric?

Ola Electric has been in the news for all the wrong reasons lately. The stock is down -70% from its all-time high but is the worst behind us or is there more pain in store? Find out as we break down the company’s pros & cons, fundamentals and technicals in our latest video.