TCS to consider share buyback along with Q2 results, board meeting on Oct 11

Tata Consultancy Services (TCS) is set to consider a share buyback as part of its upcoming board meeting on October 11, 2023. The decision was announced by the company in a statement. Prior to this buyback announcement, TCS shares closed nearly 1 percent higher at Rs 3,621.25 on the National Stock Exchange (NSE).

As of June 2023, TCS maintained a healthy cash balance of Rs 15,622 crore and had no outstanding debt. In 2022, TCS conducted its last share buyback, which amounted to Rs 18,000 crore. This buyback involved 4 crore shares priced at Rs 4,500 each, with a face value of Re 1 per share.

Earlier in the year, two other major IT companies, Infosys and Wipro, also completed share buyback programs. Infosys concluded its buyback in February 2023, acquiring 6.04 crore of its shares for Rs 9,300 crore. In June, Wipro announced its largest-ever share buyback worth Rs 12,000 crore.

The TCS board will deliberate on the share buyback proposal on the same day the company is scheduled to announce its Q2FY24 financial results. Analysts anticipate sequential growth in TCS's profit after tax (PAT) and revenue. The company is expected to outperform its peers in terms of margin performance, primarily due to cost reduction initiatives. TCS has also secured several large cost take-out deals, likely resulting in robust total contract value (TCV) bookings.

In the previous quarter, TCS reported a nearly 17 percent year-on-year (YoY) increase in consolidated net profit, reaching Rs 11,074 crore, while its consolidated revenue saw a nearly 13 percent YoY rise, reaching Rs 59,381 crore.

Please note that the views and investment tips expressed in this article are those of the author and do not necessarily reflect the opinions of Moneycontrol.com. It's advisable to consult with certified experts before making any investment decisions.

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GQG Partners Invests Rs 1,527 Crore in IDFC First Bank; HDFC Mutual Fund Acquires 1.41% Stake in Five Star Business Finance

On September 1, GQG Partners, an asset management firm headquartered in Fort Lauderdale, acquired a 2.6 percent equity stake in IDFC First Bank, a private sector financial institution, through open market transactions.

Rajiv Jain's GQG Partners secured this stake in the bank using two funds. The GQG Partners Emerging Markets Equity Fund purchased 6.38 crore equity shares, while the Goldman Sachs Trust II-Goldman Sachs GQG Partners International Opportunities Fund bought 10.77 crore shares, based on bulk deals data from the BSE.

These shares, constituting 2.6 percent of the total paid-up equity of the private lender, were acquired at an average price of Rs 89 per share, resulting in a total investment of Rs 1,527.26 crore.

In the same transaction, Cloverdell Investment, owned by the global private equity firm Warburg Pincus, divested 27.87 crore shares, equivalent to a 4.2 percent shareholding in the bank, at the same average price. The stake sale by Cloverdell amounted to Rs 2,480.34 crore.

As of June 2023, Cloverdell held a 7.12 percent stake, representing 47.17 crore shares, in IDFC First Bank. Despite the stock settling with a modest 0.11 percent gain at Rs 93.44 on the BSE on Friday, it has exhibited an upward trajectory, posting gains in 18 out of the last 20 weeks and achieving a remarkable 73 percent increase during that period.

In a separate development, Five-Star Business Finance attracted attention on Friday as its stock declined by 5.89 percent to Rs 727.80 following a significant stake sale by foreign investors.

Foreign investors, including Norwest Venture Partners X - Mauritius, Matrix Partners India Investment Holdings II LLC, and TPG Asia VII SF Pte Ltd, collectively divested 2.55 crore shares, equivalent to 8.75 percent of the total paid-up equity, of the mortgage lender. The stake sale amounted to Rs 1,862.86 crore.

HDFC Mutual Fund was among the buyers of these shares, with HTCL - HDFC Mid - Cap Opportunities Fund acquiring 41.19 lakh shares in Five-Star Business at an average price of Rs 730 per share, totaling Rs 300.7 crore.

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Navigating Market Highs: A Guide to Avoiding 10 Common Pitfalls

Amidst the fervor of soaring markets, it's crucial to balance optimism with patience, risk awareness, and avoiding greed. As the collective belief in "This time it's different" gains momentum, staying grounded becomes paramount. In this euphoric atmosphere, news anchors sport "Nifty - 21000" shirts, and Nasdaq teeters on the brink of a historic high. However, maintaining a measured perspective is essential, especially for those who've experienced the ebbs and flows of the market.

With over three decades in the market, I've weathered booms, busts, scams, and crises. As a fund manager, clients often question my cautious approach during market peaks. My response offers two clear options: retrieve your funds or practice patience. Despite pressure to deploy capital aggressively, my investment philosophy remains steadfast.

While I personally remain fully invested (leveraged at 120 percent), a sense of trepidation lingers. Socrates' wisdom, "Fools are always confident, and the wise are always in doubt," resonates, reminding me to balance bullish hopes with prudent caution. This blend of optimism and realism has contributed to our portfolios outperforming with stability over the long term.

Here are the 10 key lessons I've cultivated over the years to shape my investment approach:

1. Be Bullish, Not Foolish: 
Long-term market progress is rooted in innovation, technology, and opportunities. Embrace a perma-bull stance like Rakesh Jhunjhunwala's, but be wary of becoming a pawn to market narratives during euphoric peaks.

2. Breakout Stock Traps:
Be cautious of breakouts driven by hype. While fundamentals drive long-term success, short-term spikes are often manipulated by insiders. Beware of stocks pushed into the spotlight for gains.

3. Estimate Skepticism
Challenge analyst estimates, as they often miss the mark. Focus on valuation, free cash flow, and management intent for sound investment choices.

4. Interpreting Data
Market reactions to data can be counterintuitive. Trust accurate data over convenient interpretations; time will unveil the truth.

5. Future Value Evaluation
Evaluate future promises carefully. Investment decisions should be anchored in valuation, cash flow, and management vision, rather than ephemeral narratives.

6. Overcoming FOMO
Resist the impulse to buy into trending stocks fueled by FOMO. Patience yields better entry points, even for established giants like HDFC or Bajaj.

7. Avoiding Recency Bias
Remember past market trends, like the rise and fall of Pentafour Software and DSQ. Past performance doesn't dictate future outcomes.

8. Herd Mentality Warnings
Beware of crowded trades driven by influencers. Overcrowded sectors often lead to disappointing results, akin to the DotCom bubble or housing crisis.

9. Prioritizing Quality
Avoid favoring penny stocks over established players. Respectable, fairly priced stocks offer better odds than risky alternatives.

10. Objective Evaluation
Avoid emotional attachment to stocks or promoters. Remain rational, even if a stock has performed well in the past.

Bonus: Value Over Price
Invest in quality over low-priced stocks. Focus on substance, not shortcuts, to build a solid portfolio.

By mastering these principles, you'll navigate market waves with confidence and compound wealth wisely. Remember, compounding is indeed the eighth wonder. (Opinions expressed are my own and not reflective of this publication.

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Nifty at 20,000 by December? This Elliot Wave analyst believes so

After a disconnect earlier in the year, Indian markets have started aligning with global markets and are expected to move up, founder of India Charts, a financial services firm, Rohit Srivastava has said, adding he expects the Nifty to hit 20,000 by December end."The US and European markets started to recover from January but Indian markets were disconnected due to the Adani-Hindenburg fiasco. That is now behind us and markets are starting to move up," Srivastava told Moneycontrol on June 2.

He was referring to a report by American short-seller Hindenburg Research in late January that accused the Adani group of stock manipulation and other irregularities. The Indian conglomerate denied the charges but the report triggered a rout in group companies' shares, which have since stabilized. The benchmark Nifty50 has recovered more than 9 percent from the March lows to 18,534 now. The Sensex has gained close to 8.5 percent during the period.

"In March, we also had the highest-ever short position build-up by foreign institutional investors. Most of those positions have been covered now. So my sense is that markets bottomed out in March," Srivastava, who specializes in  Elliot Wave analysis, said. Nifty earnings per share (EPS) for the March quarter came in at Rs 233, 5-6 percent higher than the street's estimates. It was up 14 percent sequentially and 13 percent year-on-year.

Banking & financial services, autos, and metals space performed better than expected, while the rest of the sectors were broadly in line."Be it economic growth or earnings growth, we have done better than most parts of the world," said Srivastava. India's Q4 GDP surprised on the upside at 6.1 percent against an estimate of 5 percent. As India aligns with markets globally, the Nifty could hit 20,000 by December-end and the Nifty Bank scale the coveted 50,000 mark, he said.

"It was a one-and-a-half-year-long consolidation phase, which I would call a clean-up phase. From March onwards, we are seeing pretty strong breath. So this should be a continued bull run for the rest of 2023," he said. On June 2, Indian equity benchmarks closed in the green, with the Sensex up 118 points at 62,547 and the Nifty gaining 46 points to close at 18,534.

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Top 10 Factors that affect the Stock Market on Monday

Bulls kept charging the markets throughout the truncated week that ended April 7, pushing the benchmark indices to sustain their rally. A host of reasons such as higher-than-expected PMI manufacturing data, monthly auto sales numbers, provisional Q4FY23 numbers from banks and NBFCs, FII inflow, and the RBI's surprise pause in interest rate hike with upward revision in growth forecast to 6.5 percent from 6.4 percent aided the surge.

The BSE Sensex climbed 841 points or 1.4 percent to 59,833, and the Nifty50 rose 239 points or 1.4 percent to 17,599, supported by banking and financial services, auto, pharma, and infrastructure stocks.

The broader markets also traded higher with the Nifty Midcap 100 and Smallcap 100 indices gaining 1 percent and 2 percent.

After yet another encouraging week, the momentum is expected to continue along with some volatility in the holiday-shortened week beginning April 10 with focus on corporate earnings, inflation data, global news flows, and FOMC minutes, experts said. 

1) Corporate Earnings

The corporate earnings season for the March FY23 quarter will be kicked off by index heavyweights Infosys on April 13, Tata Consultancy Services on April 12, and HDFC Bank on April 15.

2) CPI Inflation

The consumer price inflation, which measures the change in prices of a basket of goods and services, is likely to drop below the 6 percent mark in March on April 12, with moderation in food inflation, against 6.4 percent in the previous month, while core inflation is likely to be sticky around 5.9-6 percent.

3) US Inflation and FOMC Minutes

On the global front, investors will look for cues from US inflation numbers and FOMC minutes scheduled to be released on April 12. Overall, the inflation is expected to moderate further to around 5.3 percent in March against 6 percent in the previous month, while the core inflation is likely to be steady at around 5.5 percent, as per the forecast available on Trading Economics.

4) Global Economic Data Points

5) FII Flow

The consistent FII inflow due to the falling US dollar index and bond yields also aided the markets and experts believe the flow is expected to continue given the hope that Federal Reserve may consider a pause in interest rate hike cycle sooner than later.

6) Oil Prices

Crude oil prices reached to a month's high, with international benchmark Brent crude futures rising to over $85 a barrel, from $79.77 on a week-on-week basis and WTI crude climbing from $75.67 to $80.46 a barrel in the same period, after a surprise OPEC+ output cuts and more-than-expected draw in US oil stocks. But the gains were capped towards the end of week after the weak US economic data raised fears over demand outlook.

7) Technical View

The Nifty has formed bullish candlestick pattern on the weekly scale, with making higher top higher bottom for second consecutive week, and the momentum indicator RSI (relative strength index) giving a nice positive crossover. Also the index climbed back above the 50-week EMA (exponential moving average - 17,426), which is another positive sign.

8) F&O Cues

The weekly Option data indicated that the 17,600 is expected to be a crucial level for the next direction of Nifty50, where we have seen maximum Call as well as Put open interest. Further, the index may find strong resistance around 17,600-17,800 area, whereas 17,500 is expected to be near-term support followed by crucial support at 17,000 levels.

9) India VIX

The volatility cooled down considerably in the last couple of weeks, with the India VIX fell by 8.8 percent for the passing week to 11.79, the lowest weekly closing level since July 2021, from 12.93 levels last week.

10) Corporate Action

Schaeffler India, Britannia Industries, Varun Beverages, Visaka Industries, Edelweiss Financial Services, and Goodluck India will trade ex-dividend, while Emami will turn ex-buyback in the coming week.

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Top 5 stocks that moved the most on December 9

Benchmark indices saw a lot of pain on December 9. At one point, Sensex was down over 600 points and finally closed 0.62 percent lower at 62,181, down 389 points. Nifty shed 112.70 points to end at 18,496. About 1199 shares advanced, 2220 shares declined, and 113 shares were unchanged. Here are the top 10 stocks that moved the most

One 97 Communications | CMP: Rs 544.75 | The parent company of Paytm surged over 7 percent after the company said its board will consider a share buyback on December 13. "The management believes that given the company's prevailing liquidity and financial position, a buyback may be beneficial for our shareholders," Paytm added.

HCL Tech | CMP: Rs 1029.80 | At its investor day held on December 8 in New York, the company said revenue growth in constant currency terms is seen at lower end of 13.5-14.5 percent YoY band. The stock was the biggest index loser, tumbling over 6 percent.

Vadilal Enterprises | CMP: Rs 2674.50 | The stock gained 3.46 percent after the board approved sale and disposal of shares of Vadilal Forex & Consultancy Services Limited and Majestic Farm House Limited. It also approved sale and disposal of certain movable properties and immovable properties of the company.

Marico | CMP: Rs 524 | The stock gained 2.6 percent after Marico South East Asia Corporation, a wholly owned subsidiary of the company, entered into a definitive agreement to acquire 100% shares of Beauty X Joint Stock Company ("Beauty X"), an entity incorporated in Vietnam which owns the personal care brands "Purité de Prôvence" and "Ôliv".

Sun Pharma | CMP: Rs 993 | The stock gained 1.24 percent after brokerages said that impact of 'import alert' on Halol plant will have insignificant impact on revenue and profit. "US generics story stopped being material for company since 2019-20," noted Bernstein. It has an Outperform call on the stock with target at Rs 1099 per share.

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5 stocks that moved on November 29

Benchmark indices ended higher on November 29 with Nifty around 18600. At close, the Sensex was up 177.04 points or 0.28% at 62,681.84, and the Nifty was up 55.20 points or 0.30% at 18,618.

Ami Organics | CMP: Rs 1,001.45 | The stock jumped 7 percent after Norges Bank on account of The Government Pension Fund Global bought 1,092,000 equity shares in the company at a price of Rs 920 per share.

Can Fin Homes | CMP: Rs 548 | The scrip ended in the green after the company declared an interim dividend of Rs 1.50 per equity share of Rs 2 each. The company has fixed December 9, 2022, as the record date for the payment of this interim dividend and the dividend will be paid to the eligible shareholders by December 26, 2022.

Laurus Labs | CMP: Rs 408.50 | The share price tumbled over 9 percent after Kotak Institutional Equities downgraded the stock with a fair value of Rs 350 per share. It also has revised FY2024E EPS 34% lower than the street. The brokerage believes Laurus' troubles on antiretrovirals (ARVs) and the looming cessation of paxlovid sales are being underappreciated.

Inox Green Energy | CMP: Rs 60.30 | The stock price ended in the red after Dovetail India Fund Class 6 Shares sold 1.8 million shares in Inox Green at a price of Rs 61.69 per equity share.

Ethos | CMP: Rs 902.70 | The stock ended in the green on November 29. Ethos Limited has signed a partnership with Swiss Watch Manufacturer Speake-Marin to be their exclusive retailer in the Indian market. The timepieces by Speake-Marin will be exclusively available with Ethos Watch Boutiques and will include timepieces such as One & Two Dual Time and City Ripples, the firm said in an exchange filing.