Weekly Market Analysis: Dalal Street falls on rising inflation and crude prices; TCS, Infosys and Tata Motors in news

Dalal Street closed lower amid rising retail inflation in India, higher global crude oil prices and huge volatility in the market. Information technology and realty stocks were biggest laggards during the week. For the week, the Sensex declined 1.86% to close at 58,338.93. The Nifty 50 index dropped or 1.74% to end at 17,475.65. Brent Crude was trading at $111.7 per barrel and the US Crude rose to $106.95 a barrel. 

Broader markets mirrored benchmark indices. The BSE Midcap index fell 1.26% to 25,303.39. The BSE Smallcap index lost 0.82% to 29,521.60.

Top losers among Nifty sector indices were IT [-2.94%], Realty [-2.19%], Metal [-1.9%], Auto [-1.8%], PSU Bank [-1.51%].

FIIs sold for Rs 6,334.63 crore in the cash segment on a weekly basis, while DIIs bought Rs 1,794.36 crore.

Company News

Tata Consultancy Services (TCS): The IT major reported a net profit of Rs 9,926 crore in Q4FY22, up 7.4 per cent year on year and 1.6 per cent sequentially. Revenue for the quarter grew 14.3 per cent to Rs 50,591 crore in constant currency terms. TCS also reported its highest-ever order book of $11.3 billion in Q4FY22 and the full year order book stood at $34.6 billion.

Infosys Ltd: The IT major posted a net profit of Rs 5,686 crore for the quarter ended March 2022 as against a profit of Rs 5,076 crore reported in the same quarter last year. On a sequential basis, Infosys net profit declined by 2.11% as compared to Rs 5,809 crore in December quarter. The company registered 22.7% rise in its revenue to Rs 32,276 crore and estimated its revenue growth to be between 13% to 15% for financial year 2023. The company witnessed higher attrition, which jumped to 27.7% in Q4, up from 25.55 in Q3FY22. The company recruited 85,000 freshers in FY22 and plans to hire upwards of 50,000 in FY23.

Tata Motors: The company’s global wholesales in Q4FY22, including Jaguar Land Rover (JLR), stood at at 3,34,884, 2% higher as compared to Q4FY21. Global wholesales of all Tata Motors’ commercial vehicles and Tata Daewoo range in Q4 FY22 stood at 1,22, 147, higher by 12%, over Q4 FY21. Global wholesales of all passenger vehicles in Q4 FY22 stood at 2, 12,737, falling 4% as compared to Q4 FY22. Global wholesales for Jaguar Land Rover were at 89,148 vehicles.

ICICI Bank Ltd: The private sector bank and GIFT SEZ have signed a memorandum of understanding to promote GIFT SEZ to Indian as well as global businesses including IT / ITeS and financial services. Both organisations will promote GIFT SEZ among Indian and foreign MNCs as the preferred location for access to cross-border trade finance, according to a press release.

Adani Green Energy (AGEL): The company jumped 4.77% after the company said its total operational capacity increased by 56% YoY to 5,410 MW in Q4 of FY2022. AGEL said its sale of energy increased by 84% YoY at 2,971 million units in Q4 FY22 as against 1,614 million units in Q4 FY21. This was backed by robust performance in both solar and wind portfolios.

SpiceJet: The Supreme Court asked the low-cost airline to consider “giving some interest” to Kalanithi Maran and his Kal Airways for settling the dispute relating to a share-transfer issue. Senior advocate Mukul Rohatgi, appearing for the Spicejet, sought some time for either settling the dispute or arguing the matter.

TVS Motor Company: The company said its subsidiary Swiss E-Mobility Group (Holding) AG has acquired 100% shareholding in Alexand’Ro Edouard’O Passion Vélo Sàrl for 2.79 million Swiss Francs. The acquired company is primarily engaged in the sale of e-bikes as well as e-bike accessories across a range of premium e-bike brands such as TREK, Riese & Muller, Cannondale, Moustache and others.

Veranda Learning Solutions Ltd: The company had a mixed market debut on Monday, listing at a discount on NSE and a premium on BSE. The stock listed at Rs 157 apiece on the BSE, a premium of 14.6% to its IPO price of Rs 137. Meanwhile, the stock listed at Rs 125 on the NSE, a discount of 8.8%. At the end of the day, shares of the company closed at Rs 131.25 apiece in NSE and Rs 160.40 per share in BSE.

Economy News

India’s inflation based on Consumer Price Index (CPI) jumped to a 17-month high of 6.95% in March from 6.07% in February, according to government data. Consumer food price inflation rose to 7.68% in March as against 5.85% in February.

Factory output or the Index of Industrial Production (IIP) rose 1.7% in February 2022 compared to a revised estimate of 1.5% in January this year, the data published by the Ministry of Statistics and Programme Implementation (MoSPI).

India’s merchandise trade deficit for March 2022 widened to $18.51 billion as against $13.64 billion in March 2021 and $9.98 billion in March 2020, according to government data. Merchandise exports in March 2022 were $42.22 billion, as against $35.26 billion in March 2021, while imports in March 2022 were $60.74 billion, an increase of 24.21% over imports of $48.90 billion in the year-ago period.

Global Markets

Major Wall Street indices ended lower as earnings season kicked off. The big four US banks reported their results. The largest bank JPMorgan missed Wall Street’s estimates and weighed on financial stocks. Market participants estimated decline in earnings growth weighing on their sentiments. For the week, the Dow lost 0.8%, S&P 500 plunged 2.1%, and Nasdaq tanked 2.6%.

The US Labor Department said that headline inflation jumped 1.2% in March, bringing the year-over-year increase to 8.5%. The core inflation rate excluding food and energy prices rose only 0.3%, which was below consensus expectations of about 0.5%.

Japan’s stock markets rose during the week, with the Nikkei 225 index rising 0.69% and the broader Topix index was up 0.62%. Japan’s central bank’s governor said the country’s economy continued to recover despite surging commodity prices.

Japan’s producer price index, which measures the price of goods traded between companies, rose by 9.5% year on year in March 2022, after a 9.7% rise in February 2022.

In the Chinese market, stock indices fell as a surging coronavirus outbreak in Shanghai fuelled concerns about supply chain disruptions. The Shanghai Composite index fell 0.8%, and CSI 300 index, which tracks the largest listed companies in Shanghai and Shenzhen, declined 0.92%. Many auto manufacturers and electronic parts maker in the country suspended operations.

China’s producer price index surged 8.3% year-on-year, official data showed. Chinese consumer inflation also rose more than expected in March, with the consumer price index rising 1.5% year-on-year.