TCS to consider share buyback along with Q2 results, board meeting on Oct 11

Tata Consultancy Services (TCS) is set to consider a share buyback, with the company's board meeting scheduled for October 11, 2023, to discuss this decision, according to a statement by the company. TCS shares saw an increase of nearly 1 percent, closing at Rs 3,621.25 on the NSE ahead of the buyback announcement.

As of June 2023, TCS held a cash balance of Rs 15,622 crore and had no outstanding debt. TCS conducted its last share buyback in 2022, amounting to Rs 18,000 crore. This buyback consisted of 4 crore shares priced at Rs 4,500 per share, with a face value of Re 1 per share.

Earlier this year, two other prominent IT companies, Infosys and Wipro, also completed share buybacks. In February 2023, Infosys concluded its buyback by repurchasing 6.04 crore of its shares for Rs 9,300 crore. In June, Wipro announced its largest-ever share buyback worth Rs 12,000 crore.

The TCS board will discuss the share buyback proposal on the same day that the company is expected to announce its Q2FY24 financial results. Analysts anticipate TCS to report sequential growth in profit after tax (PAT) and revenue. Furthermore, it is expected to outperform other tier-1 peers in terms of margin performance. TCS's announcement of several significant cost take-out deals is likely to result in robust total contract value (TCV) bookings for the company.

In the previous quarter, TCS reported a nearly 17 percent year-on-year (YoY) increase in consolidated net profit, reaching Rs 11,074 crore. Its consolidated revenue also grew by nearly 13 percent YoY to Rs 59,381 crore.

Please note that the views and investment tips expressed in this article are those of the author and do not necessarily reflect the opinions of Moneycontrol.com. It is advisable to consult certified experts before making any investment decisions.

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GQG Partners Invests Rs 1,527 Crore in IDFC First Bank; HDFC Mutual Fund Acquires 1.41% Stake in Five Star Business Finance

On September 1, GQG Partners, an asset management firm headquartered in Fort Lauderdale, acquired a 2.6 percent equity stake in IDFC First Bank, a private sector financial institution, through open market transactions.

Rajiv Jain's GQG Partners secured this stake in the bank using two funds. The GQG Partners Emerging Markets Equity Fund purchased 6.38 crore equity shares, while the Goldman Sachs Trust II-Goldman Sachs GQG Partners International Opportunities Fund bought 10.77 crore shares, based on bulk deals data from the BSE.

These shares, constituting 2.6 percent of the total paid-up equity of the private lender, were acquired at an average price of Rs 89 per share, resulting in a total investment of Rs 1,527.26 crore.

In the same transaction, Cloverdell Investment, owned by the global private equity firm Warburg Pincus, divested 27.87 crore shares, equivalent to a 4.2 percent shareholding in the bank, at the same average price. The stake sale by Cloverdell amounted to Rs 2,480.34 crore.

As of June 2023, Cloverdell held a 7.12 percent stake, representing 47.17 crore shares, in IDFC First Bank. Despite the stock settling with a modest 0.11 percent gain at Rs 93.44 on the BSE on Friday, it has exhibited an upward trajectory, posting gains in 18 out of the last 20 weeks and achieving a remarkable 73 percent increase during that period.

In a separate development, Five-Star Business Finance attracted attention on Friday as its stock declined by 5.89 percent to Rs 727.80 following a significant stake sale by foreign investors.

Foreign investors, including Norwest Venture Partners X - Mauritius, Matrix Partners India Investment Holdings II LLC, and TPG Asia VII SF Pte Ltd, collectively divested 2.55 crore shares, equivalent to 8.75 percent of the total paid-up equity, of the mortgage lender. The stake sale amounted to Rs 1,862.86 crore.

HDFC Mutual Fund was among the buyers of these shares, with HTCL - HDFC Mid - Cap Opportunities Fund acquiring 41.19 lakh shares in Five-Star Business at an average price of Rs 730 per share, totaling Rs 300.7 crore.

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Navigating Market Highs: A Guide to Avoiding 10 Common Pitfalls

Amidst the fervor of soaring markets, it's crucial to balance optimism with patience, risk awareness, and avoiding greed. As the collective belief in "This time it's different" gains momentum, staying grounded becomes paramount. In this euphoric atmosphere, news anchors sport "Nifty - 21000" shirts, and Nasdaq teeters on the brink of a historic high. However, maintaining a measured perspective is essential, especially for those who've experienced the ebbs and flows of the market.

With over three decades in the market, I've weathered booms, busts, scams, and crises. As a fund manager, clients often question my cautious approach during market peaks. My response offers two clear options: retrieve your funds or practice patience. Despite pressure to deploy capital aggressively, my investment philosophy remains steadfast.

While I personally remain fully invested (leveraged at 120 percent), a sense of trepidation lingers. Socrates' wisdom, "Fools are always confident, and the wise are always in doubt," resonates, reminding me to balance bullish hopes with prudent caution. This blend of optimism and realism has contributed to our portfolios outperforming with stability over the long term.

Here are the 10 key lessons I've cultivated over the years to shape my investment approach:

1. Be Bullish, Not Foolish: 
Long-term market progress is rooted in innovation, technology, and opportunities. Embrace a perma-bull stance like Rakesh Jhunjhunwala's, but be wary of becoming a pawn to market narratives during euphoric peaks.

2. Breakout Stock Traps:
Be cautious of breakouts driven by hype. While fundamentals drive long-term success, short-term spikes are often manipulated by insiders. Beware of stocks pushed into the spotlight for gains.

3. Estimate Skepticism
Challenge analyst estimates, as they often miss the mark. Focus on valuation, free cash flow, and management intent for sound investment choices.

4. Interpreting Data
Market reactions to data can be counterintuitive. Trust accurate data over convenient interpretations; time will unveil the truth.

5. Future Value Evaluation
Evaluate future promises carefully. Investment decisions should be anchored in valuation, cash flow, and management vision, rather than ephemeral narratives.

6. Overcoming FOMO
Resist the impulse to buy into trending stocks fueled by FOMO. Patience yields better entry points, even for established giants like HDFC or Bajaj.

7. Avoiding Recency Bias
Remember past market trends, like the rise and fall of Pentafour Software and DSQ. Past performance doesn't dictate future outcomes.

8. Herd Mentality Warnings
Beware of crowded trades driven by influencers. Overcrowded sectors often lead to disappointing results, akin to the DotCom bubble or housing crisis.

9. Prioritizing Quality
Avoid favoring penny stocks over established players. Respectable, fairly priced stocks offer better odds than risky alternatives.

10. Objective Evaluation
Avoid emotional attachment to stocks or promoters. Remain rational, even if a stock has performed well in the past.

Bonus: Value Over Price
Invest in quality over low-priced stocks. Focus on substance, not shortcuts, to build a solid portfolio.

By mastering these principles, you'll navigate market waves with confidence and compound wealth wisely. Remember, compounding is indeed the eighth wonder. (Opinions expressed are my own and not reflective of this publication.

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Nifty at 20,000 by December? This Elliot Wave analyst believes so

After a disconnect earlier in the year, Indian markets have started aligning with global markets and are expected to move up, founder of India Charts, a financial services firm, Rohit Srivastava has said, adding he expects the Nifty to hit 20,000 by December end."The US and European markets started to recover from January but Indian markets were disconnected due to the Adani-Hindenburg fiasco. That is now behind us and markets are starting to move up," Srivastava told Moneycontrol on June 2.

He was referring to a report by American short-seller Hindenburg Research in late January that accused the Adani group of stock manipulation and other irregularities. The Indian conglomerate denied the charges but the report triggered a rout in group companies' shares, which have since stabilized. The benchmark Nifty50 has recovered more than 9 percent from the March lows to 18,534 now. The Sensex has gained close to 8.5 percent during the period.

"In March, we also had the highest-ever short position build-up by foreign institutional investors. Most of those positions have been covered now. So my sense is that markets bottomed out in March," Srivastava, who specializes in  Elliot Wave analysis, said. Nifty earnings per share (EPS) for the March quarter came in at Rs 233, 5-6 percent higher than the street's estimates. It was up 14 percent sequentially and 13 percent year-on-year.

Banking & financial services, autos, and metals space performed better than expected, while the rest of the sectors were broadly in line."Be it economic growth or earnings growth, we have done better than most parts of the world," said Srivastava. India's Q4 GDP surprised on the upside at 6.1 percent against an estimate of 5 percent. As India aligns with markets globally, the Nifty could hit 20,000 by December-end and the Nifty Bank scale the coveted 50,000 mark, he said.

"It was a one-and-a-half-year-long consolidation phase, which I would call a clean-up phase. From March onwards, we are seeing pretty strong breath. So this should be a continued bull run for the rest of 2023," he said. On June 2, Indian equity benchmarks closed in the green, with the Sensex up 118 points at 62,547 and the Nifty gaining 46 points to close at 18,534.

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Top 10 Factors that affect the Stock Market on Monday

Bulls kept charging the markets throughout the truncated week that ended April 7, pushing the benchmark indices to sustain their rally. A host of reasons such as higher-than-expected PMI manufacturing data, monthly auto sales numbers, provisional Q4FY23 numbers from banks and NBFCs, FII inflow, and the RBI's surprise pause in interest rate hike with upward revision in growth forecast to 6.5 percent from 6.4 percent aided the surge.

The BSE Sensex climbed 841 points or 1.4 percent to 59,833, and the Nifty50 rose 239 points or 1.4 percent to 17,599, supported by banking and financial services, auto, pharma, and infrastructure stocks.

The broader markets also traded higher with the Nifty Midcap 100 and Smallcap 100 indices gaining 1 percent and 2 percent.

After yet another encouraging week, the momentum is expected to continue along with some volatility in the holiday-shortened week beginning April 10 with focus on corporate earnings, inflation data, global news flows, and FOMC minutes, experts said. 

1) Corporate Earnings

The corporate earnings season for the March FY23 quarter will be kicked off by index heavyweights Infosys on April 13, Tata Consultancy Services on April 12, and HDFC Bank on April 15.

2) CPI Inflation

The consumer price inflation, which measures the change in prices of a basket of goods and services, is likely to drop below the 6 percent mark in March on April 12, with moderation in food inflation, against 6.4 percent in the previous month, while core inflation is likely to be sticky around 5.9-6 percent.

3) US Inflation and FOMC Minutes

On the global front, investors will look for cues from US inflation numbers and FOMC minutes scheduled to be released on April 12. Overall, the inflation is expected to moderate further to around 5.3 percent in March against 6 percent in the previous month, while the core inflation is likely to be steady at around 5.5 percent, as per the forecast available on Trading Economics.

4) Global Economic Data Points

5) FII Flow

The consistent FII inflow due to the falling US dollar index and bond yields also aided the markets and experts believe the flow is expected to continue given the hope that Federal Reserve may consider a pause in interest rate hike cycle sooner than later.

6) Oil Prices

Crude oil prices reached to a month's high, with international benchmark Brent crude futures rising to over $85 a barrel, from $79.77 on a week-on-week basis and WTI crude climbing from $75.67 to $80.46 a barrel in the same period, after a surprise OPEC+ output cuts and more-than-expected draw in US oil stocks. But the gains were capped towards the end of week after the weak US economic data raised fears over demand outlook.

7) Technical View

The Nifty has formed bullish candlestick pattern on the weekly scale, with making higher top higher bottom for second consecutive week, and the momentum indicator RSI (relative strength index) giving a nice positive crossover. Also the index climbed back above the 50-week EMA (exponential moving average - 17,426), which is another positive sign.

8) F&O Cues

The weekly Option data indicated that the 17,600 is expected to be a crucial level for the next direction of Nifty50, where we have seen maximum Call as well as Put open interest. Further, the index may find strong resistance around 17,600-17,800 area, whereas 17,500 is expected to be near-term support followed by crucial support at 17,000 levels.

9) India VIX

The volatility cooled down considerably in the last couple of weeks, with the India VIX fell by 8.8 percent for the passing week to 11.79, the lowest weekly closing level since July 2021, from 12.93 levels last week.

10) Corporate Action

Schaeffler India, Britannia Industries, Varun Beverages, Visaka Industries, Edelweiss Financial Services, and Goodluck India will trade ex-dividend, while Emami will turn ex-buyback in the coming week.

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Bank Nifty closes above 43,339 for the first time, next hurdle 42,750

The Bank Nifty opened lower at 42,959, which was also the day's low. After some volatile moves, the index closed 33 points higher at 43,053. The banking index formed a small-bodied bullish candle on daily frame with a bigger upper shadow. It has to hold above 42,750 to make an up move towards 43,339 and 43,500, whereas supports are placed at 42,750 and 42,500 levels, Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services said.

The Nifty hit another high to close above 18,600 for the first time on November 29, extending the uptrend to the sixth consecutive session supported by positive global cues and buying in FMCG, metal and pharma stocks.

The broader market, however, saw profit booking, with the Nifty midcap 50, midcap 100 and smallcap 100 indices declining half a percent each. On the options front, the maximum Call open interest was at 19,000 strike followed by 20,000 strike, with Call writing at 18,800 strike then 18,700 strike. The maximum Put open interest was seen at 18,000 strike followed by 17,000 strike, with Put writing at 18,600 strike then 18,500 strike.

After opening flat at 18,552, which was also the day's low, the index traded higher for the rest of the day. It hit a new high of 18,678 and closed 55 points higher than the previous day at 18,618. The index has formed a bullish candle on the daily charts, making higher highs for the fifth straight session.

"The market is consistently holding higher high and higher low formation which is broadly positive. Hence the support has now shifted to 18,550 from 18,450," Shrikant Chouhan, Head of Equity Research ( Retail) at Kotak Securities said.
As long as the index trades above 18,550, the uptrend will continue. The market can move to 18,750-18,800, the expert said.

The data indicates that in near term, the Nifty may trade in range of 18,400 to 18,800. India VIX was up by 0.36 percent to 13.62 levels, but overall it has been cooling off for the last nine weeks and supporting the bulls.

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5 factors that will keep traders busy

After taking a breather in the previous week, the market resumed its uptrend and ended the week at a record closing high with a 1 percent gain on November 25, following an up-move in global counterparts amid rising hope that the Federal Reserve may slow down the pace of rate hikes in the upcoming policy meetings. The declining oil prices, buying by FIIs, and falling US bond yields, too, lifted the sentiment.

The BSE Sensex rallied more than 600 points to 62,294 and the Nifty50 jumped over 200 points to 18,513, while the broader markets were also in action after recent consolidation, with the Nifty Midcap 100 and Smallcap 100 indices gaining more than 2 percent each. Auto, banks, technology, infrastructure, and oil and gas stocks supported the market, whereas power and realty stocks were under pressure.

In the coming week, too, the momentum along with consolidation is expected to sustain, with the Nifty likely hitting its intraday record high of 18,604, with focus on monthly auto sales numbers and second quarter GDP data on the domestic front, and global cues, experts said. The Bank Nifty as well as the BSE Sensex reclaimed their previous tops.

"Going ahead, the lack of strong fundamental triggers will limit the upside, keeping the market volatile in the short term. The Fed Chair's speech, scheduled for the next week, and the release of other significant macroeconomic data will influence the market's future trajectory," Vinod Nair, Head of Research at Geojit Financial services, said.

1) Quarterly GDP Numbers
The quarterly economic growth rate scheduled to be released on coming Wednesday is the key factor to watch out for next week. Most experts expect the economy to grow more than 6 percent in the September FY23 ended quarter (Q2CY22), lower compared to a growth rate of 13.5 percent recorded in the previous quarter (on a low base due to Covid-led lockdown in Q1FY22), supported by pent-up demand and economic activity normalization.

2) November Auto Sales
Monthly auto sales numbers scheduled to be released in the latter part of next week will also be watched. Commercial vehicle demand momentum is expected to continue in November, while the passenger vehicle sales are likely to be supported by improving semiconductor supply, experts said, but the sustainability of demand for two-wheeler post-festive season is a key to watch.

3) Oil Prices
The correction in oil prices was one of the reasons for strengthening market sentiment last week as it raises hope for ease in inflation and fiscal deficit concerns along with improving margin pressure for corporates. Also, the RBI may heave a sigh of relief as the rate hike pace may be slowed down, experts said.

4) Global Economic Data Points
Investors will closely watch the second estimates for the third quarter (CY22) US GDP, US unemployment rate for November, and monthly manufacturing PMI data due next week.

5) FII Flow
Healthy buying by foreign investors in November seems to have raised the confidence of the market. Experts largely feel the flow is expected to continue in the coming weeks with the fall in the US dollar index, and bond yields and given that India is the fastest-growing economy in the world.

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