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Informist, Thursday, Oct. 9, 2025

 

By Gopika Balasubramanium

 

MUMBAI – Technical analysts are bullish on the domestic benchmark indices but expect them to remain in a range. Information technology stocks will be in focus Friday as they take cues from the September quarter financial results of Tata Consultancy Services. Movement in these stocks is likely to also decide the direction of the headline indices, as IT companies have nearly 10% weightage in the Nifty 50, the largest after financial stocks.

 

The bottom line of Tata Consultancy Services for the September quarter fell more sharply than expected on account of "restructuring expenses" of around INR 11 billion. The decline in the IT bellwether's bottom line also followed wage hikes in September and came amid uncertainty about US policies, especially regarding tariffs, trade, and visas. The company released its earnings after market hours.

 

The IT behemoth's consolidated net profit fell over 5% on quarter to INR 120.75 billion, lower than analysts' expectations of nearly INR 126 billion. However, its revenue from operations rose nearly 4% sequentially to INR 657.99 billion, higher than the INR 651.44 billion expected. Its total contract value for the September quarter was $10.0 billion, slightly better than $9.4 billion in the June quarter but lower than $12.2 billion in the March quarter.

 

The company's shares closed at INR 3,061.70 on the National Stock Exchange, up 1.1%, ahead of the earnings. For any sustainable gains, TCS needs to close above INR 3,200, Vipin Kumar, assistant vice-president of derivatives and technical at Globe Capital Market, said. Kumar sees TCS facing immediate resistance at INR 3,150-INR 3,200 and finding support at INR 2,850. Meanwhile, he sees the Nifty IT encountering resistance at 36200-36500 points and finding immediate support at 34500 points.

 

Thursday, the Nifty 50 closed at 25181.80 points, up 135.65 points or 0.5%. Only eight Nifty 50 constituents closed in the red. The BSE Sensex closed at 82172.10 points, up 398.44 points or 0.5%. All the sectoral indices and the broader market indices also closed in positive territory.

 

Globe Capital's Kumar said traders are "cautiously bullish" on the markets. The sentiment was balanced by put writing during Thursday's session. "We continue to uphold our cautiously bullish stance on Nifty (50) index till it is holding above 24900 spot levels on closing basis," he added. If the 50-stock index manages to close above 25250 points, the next move would be towards 25400 points in the near term, Kumar said. "Going forward, market direction will hinge on earnings announcements and commentary from managements, especially in consumption and financial segments," Vikram Kasat, head, advisory, for equities, capital markets, derivatives at PL Capital, said in a note. "We expect the near-term trend to stay range-bound with a positive bias, supported by resilient domestic macro fundamentals," he added. 

 

Fundamental analysts see the earnings for the September quarter being slightly better than for the June quarter. However, they see banking and financial services companies dragging down the overall earnings of Indian corporations. "Weak BFSI (banking, financial services, and insurance) performance can be attributed to muted loan growth, margin compression, weak core fee income, lower treasury gains, and elevated credit costs in both private and SoE (state-owned enterprise) banks," JM Financial said in a strategy report dated Wednesday. 

 

Most analysts are bullish on consumer-driven sectors such as automobiles, consumer staples and durables, cement, internet, hotels, and real estate. They expect earnings of companies in these sectors to improve significantly in the second half of the financial year 2025-26 (Apr-Mar), primarily because they are seen benefiting from measures such as the income-tax cuts announced in the Budget for FY26, interest-rate cuts, increasing liquidity in the banking system, and goods and services tax reduction. However, some say the GST cut will not be able to offset the damage caused by US tariffs.

 

However, during the September quarter, sales of fast-moving consumer goods companies were affected as distributors deferred purchases in anticipation of a GST rate cut on several daily-use products, according to the quarterly updates from these companies. This is likely to have hit the earnings of FMCG companies, which were already struggling because of poor volume growth.

 

Analysts are also positive on the September quarter earnings of metal companies. Steel companies are expected to benefit from continued strong demand in the domestic market, aided by the government's focus on infrastructure and the safeguard duty restricting cheaper imports, Prabhudas Lilladher said in a sector report. "Despite weak pricing in Q2FY26 (Jul-Sept), we expect Tata Steel and JSW Steel to deliver strong EBITDA (earnings before interest, tax, interest, depreciation, and amortisation) growth aided by robust 9-10% YoY (year-on-year) volume growth and narrowing of losses (in) Europe," the broking firm said.  End

 

Edited by Rajeev Pai

 

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