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Informist, Friday, Jul. 11, 2025

By Anjana Therese Antony

MUMBAI – Short bets were added to the options chain of information technology player HCL Technologies ahead of its June quarter earnings Monday. The company's results are expected to be underwhelming because of weakness in its IT services business, pressure on margins, and persisting macroeconomic uncertainty stemming from US tariffs, various broking firms said. With near-term headwinds likely to persist, analysts believe Indian IT stocks will continue to fall further. This was evident from the fall of IT stocks Friday after the earnings of industry giant Tata Consultancy Services, which said clients continue to delay decisions on discretionary spends.

The company's consolidated net profit is likely to fall 1.7% sequentially to INR 42.35 billion, while the revenue is expected to increase just 0.3% to INR 303.28 billion, according to the average of estimates from 14 broking firms. From a year ago, this would mean a 0.5% fall in the bottom line and 8% growth in the top line. The company is widely expected to retain its revenue growth guidance of 2-5% for the financial year 2025-26 (Apr-Mar).

Kotak Institutional Equities expects HCL Technologies to report healthy total contract value in the range of $2 billion-$2.5 billion. "HCLT management highlighted the strong pipeline and likely closures of large deals in 1QFY26 (Apr-Jun)," it said in its earnings preview.

The weak results of Tata Consultancy Services, couple with broking firms' cautious views after the earnings, pulled TCS shares down and had a ripple effect on other IT peers Friday. Shares of HCL Technologies closed 1.5% lower at INR 1,638.30 on the National Stock Exchange, extending losses for the fifth consecutive session.

In the options chain of HCL Technologies, the highest addition of open interest was at INR 1,700 call and INR 1,460 put strikes. The maximum open interest concentration is at INR 1,720 call and INR 1,600 put contracts. Premiums on INR 1,640-INR 1,780 call options expiring Jul. 31 fell 33-44% and those on INR 1,620-INR 1,500 put strikes increased 35-37%. They also added short positions to the futures contracts of HCL Technologies. The July series closed almost 2% lower at INR 1,620 and open interest rose nearly 4% to 16.43 million. A similar trend was seen in the August series, with open interest rising around 15% to more than 605,000.

The fall in IT stocks Friday primarily led to the sharp decline of the Nifty 50 which closed 0.8% lower at 25149.85 points, down for the third consecutive session. The near-term support for the 50-stock index is seen at 25100-25000 points and resistance at 25220-25400 points. Derivatives analysts said the bias is likely to remain bullish if the index manages to remain above its psychologically important level of 25000 points in the near term. The index has fallen 1.2% in the past seven days, but gained 10% in 90 days.

Just like the IT sector, equity market investors are also cautious about the persistent uncertainty over US tariffs. With the outcome of trade talks between India and the US getting delayed, there are worries about what is on the cards for India. However, there are also hopes that India will be affected the least by tariffs and foreign investors are favouring the domestic market over the US due to rising challenges to the growth of the world's largest economy. In the upcoming trading sessions, the June quarter earnings will offer cues to market participants, along with developments in the global markets. 

--Nifty 50 Jul closed at 25208.00, down 213.90 points; 58.15-point premium to the spot index

--Nifty 50 Aug closed at 25310.00, down 222.20 points; 160.15-point premium to the spot index

--Nifty 50 Sep closed at 25470.00, down 218.00 points; 320.15-point premium to the spot index

Glenmark Pharmaceuticals, Tata Consultancy Services, Infosys, BSE, Hindustan Unilever, Tata Elxsi, Reliance Industries, Bharti Airtel, HDFC Bank, ICICI Bank, State Bank of India, Bharat Electronics, One 97 Communications, Multi Commodity Exchange of India, and Bosch were the most active underlying stocks Friday.  End

Edited by Rajeev Pai

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