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Informist, Wednesday, Oct. 16, 2024

By Alina Geogy

MUMBAI – Benchmark indices are expected to fall for the third consecutive session Thursday. Several companies have posted weaker-than-expected Jul-Sept earnings so far and analysts expect this trend to continue, thereby weighing on investor sentiment. Shares of Bajaj Auto will be in focus after the automaker's earnings for the September quarter missed analyst's estimates slightly.

Bajaj Auto reported strong on-year growth in both net profit and revenue but failed to meet analysts' expectations. The company's performance was driven by an increase in overall sales volume in Jul-Sept, a richer product mix, and a higher average selling price. Market participants will assess commentary by the management at Bajaj Auto's conference call later in the day.

Investors will also eye quarterly earnings by four Nifty 50 companies Thursday--Axis Bank, Infosys, Wipro, and Nestle India. All these stocks closed lower Wednesday. Major private sector lender Axis Bank is expected to show some improvement in its earnings for Jul-Sept on the back of a rise in income and lower provisions.

Infosys is expected to post strong sequential earnings growth for Jul-Sept, aided by deal ramp-ups, higher revenue from third-party software, and improved performance of key segments. Infosys is also being expected to raise its revenue growth guidance in constant currency terms for 2024-25 (Apr-Mar). On the other hand, sectoral peer Wipro is expected to report muted financial performance for the quarter due to weakness in communications, manufacturing, and energy and utilities verticals, and muted discretionary spending.

Fast-moving consumer goods giant Nestle India may also post weak earnings for the September quarter. Inflationary pressure on certain key raw materials and moderate volume growth in some product segments are expected to weigh on the company's financials.

Analysts are of the view that companies will improve their financial performance from Oct-Dec onwards. With the festive season approaching, consumer spending is expected to rise, benefiting retail and consumer goods, Vikram Kasat, head of advisory at PL Capital, Prabhudas Lilladher, said in a note. Festive demand and strong earnings could boost market sentiment in the weeks ahead, he said.

The Nifty 50 may see further weakness, potentially testing the 24700 point level if it falls below 24900 points, said Rajesh Bhosale, equity technical analyst at Angel One. On the upside, resistance is seen around 25100 points, followed by the 25250 level, he said, adding that only a move beyond this range might spark some bullish momentum on the hourly charts. It is also crucial to monitor global factors closely, as they could influence market direction ahead of the weekly expiry of derivatives contracts, he said.  

Shares of Rail Vikas Nigam may gain Thursday after the company said it emerged as the lowest bidder for the INR 2.70 billion metro station project from Maharashtra Metro Rail Corp. Shares of Bikaji Foods International will also be eyed after the company said its wholly owned subsidiary Bikaji Foods Retail will invest INR 1.31 billion over the next two years to acquire a 53.02% stake in Hazelnut Factory Food Products, a cafe-cum-artisanal sweets brand.

Hyundai Motor India's INR 278.70 bln initial public offering, which has seen a slow response from investors so far, will close Thursday. The company's public issue was undersubscribed at 42% as on the second day as investors cumulatively bid for 41.73 million shares of the allocated portion of 99.77 million shares on offer. End

Edited by Deepshikha Bhardwaj

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