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Informist, Friday, Oct. 11, 2024

By Anjana Therese Antony

MUMBAI – Ahead of its Jul-Sept earnings on Monday, there were upside bets placed in the derivatives chain of HCL Technologies. Though the company is expected to post muted earnings, analysts expect the company to retain its revenue growth guidance of 3.0-5.0% for 2024-25 (Apr-Mar). Though information technology companies are not expecting a major improvement in the demand scenario, they had said things may get better in FY26.

For the September quarter, the Noida-based company's consolidated net profit is seen falling over 5% on quarter to INR 40.3 billion, while revenue may rise nearly 2% to INR 286 billion, according to the average of estimates by 17 brokerage houses. IDBI Capital Markets & Securities expect the company's operating margin to expand 71 basis points from the previous quarter to 17.8% due to operational efficiency. 

On Jul. 15, shares of the company had risen 5% after the company reported a higher-than-expected earnings. The surge in the stock price was also backed by bullish views from various broking firms. Friday, shares of HCL Technologies closed 1.7% higher at INR 1,839.65 on the National Stock Exchange. 

In the options chain of HCL Technologies, premiums on INR 1,900-2,000 call options expiring Oct. 31 rose more than 25% and those on INR 1,840-1,740 declined over 36%. The maximum addition of open interest was at INR 1,900 call and INR 1,700 put contracts. 

Meanwhile, the overall equity market is likely to be volatile next week, with earnings season expected to set the undertone for the short term. Other than HCL Technologies, Reliance Industries will also release its earnings Monday. Analysts expect the market to see muted gains or losses in the absence of major triggers and investors may closely track developments in global markets to make investment decisions in the stock market. Expensive valuations and slowdown in earnings growth in the September quarter are expected to drag the market lower in the short term, analysts said. 

Friday, the Nifty 50 closed 0.1% lower at 24964.25 points and the BSE Sensex ended 0.3% lower at 81381.36 points. The near-term support for the 50-stock index is seen at 24900-24800 points and resistance at 25100-25150 points. Both indices have declined around 5% each from their record highs hit on Sept. 27. 

Premiums on out-of-the-money calls expiring Thursday declined over 50% and those on puts close to the current level rose over 20%. The highest open interest addition was at 27000-point call and 25000-point put options. The October futures contract of the Nifty 50 also mirrored the slight weakness in the market and closed 0.3% lower and open interest declined 1.4% to 13.82 million. 

--Nifty 50 Oct closed at 25048.00, down 69.90 points; 83.75-point premium to spot index

--Nifty 50 Nov closed at 25194.95, down 71.35 points; 230.70-point premium to spot index

--Nifty 50 Dec closed at 25340.00, down 82.05 points; 375.75-point premium to spot index

Tata Consultancy Services, HDFC Bank, Infosys, Reliance Industries, ICICI Bank, Kotak Mahindra Bank, State Bank of India, ITC, HCL Technologies, Trent, Exide Industries, Cummins India, Divi's Laboratories, Tata Steel, Adani Enterprises, Axis Bank, and Persistent Systems were the most actively traded contracts.  End

Edited by Akul Nishant Akhoury

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