More Stories

Informist, Friday, Oct. 18, 2024

By Anjana Therese Antony

MUMBAI – Slightly bearish bets were placed in the derivatives chain of Tech Mahindra ahead of the company's quarterly results due Saturday. The Pune-based information technology company is likely to report a slowdown in earnings growth owing to muted deal wins, persistent weakness in its core communications segment and in discretionary spending, various broking firms said in their previews. However, cost-efficiency measures may push margins higher sequentially.

Tech Mahindra is expected to post 15.3% sequential growth in consolidated net profit to INR 9.82 billion and a 1.4% rise in revenue to INR 131.90 billion, according to an average of estimates from 17 broking firms. The communications vertical, which contributed to around 33% of the company's revenue in Apr-Jun, has been posting a fall sequentially in its top line for the past five quarters and is expected to do likewise in Jul-Sept.

The company's shares closed 0.7% lower at INR 1,687.90 on the National Stock Exchange Friday, 8% lower than the record high of INR 1,838 they hit on Dec. 30, 2021. Premiums on INR 1,680-1,840 call options expiring Oct. 31 fell 4-17% and those on INR 1,680-1,580 put contracts rose 19-40%. The maximum open interest addition was at INR 1,700 call and INR 1,680 put options. The October futures contract of Tech Mahindra also closed marginally lower and open interest increased 5.2% to 13.422 million. 

Meanwhile, the overall equity market is likely to be volatile in the near term, though it snapped a three-day losing run Friday. The Nifty 50 closed 0.4% higher at 24854.05 points and the BSE Sensex ended 0.3% higher at 81224.75 points. The near-term support for the 50-stock index is pegged at 24800-24700 points and resistance at 24950-25150 points, according to a technical and derivatives analyst at a top domestic broking firm.

Analysts said expensive valuations, outflow of foreign funds to other emerging markets such as China, the bearish approach of foreign investors, and a likely slowdown in earnings growth of Indian companies may continue to drag the market lower. They also see traders adding more short positions if the market rises in the near term.

Premiums on 24850-25100 call options expiring next week rose 3-20% and those on the remaining strikes declined. On the puts side, premiums across contracts tumbled. The highest open interest addition was at 25400-point call and 24000-point put options.

Analysts also said foreign institutional investors have been adding to their short positions. They have also been net sellers in the domestic market for 15 consecutive sessions, offloading equities worth INR 912.22 billion.

--Nifty 50 Oct closed at 24965.55, up 121.75 points; 111.50-point premium to spot index

--Nifty 50 Nov closed at 25100.00, up 114.95 points; 245.95-point premium to spot index

--Nifty 50 Dec closed at 25255.00, up 117.70 points; 400.95-point premium to spot index

HDFC Bank, Infosys, Axis Bank, Reliance Industries, Wipro, ICICI Bank, Polycab India, State Bank of India, Bajaj Auto, Tech Mahindra, Kotak Mahindra Bank, Tata Motors, Mahindra & Mahindra, Dixon Technologies, and ITC were the most-actively traded contracts.  End

Edited by Rajeev Pai

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

Informist Media Tel +91 (22) 6985-4000

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2024. All rights reserved.