Today's picks: From TCS to Tata Motors, hot stocks to watch on Friday

Nifty
Current: 10,977 (fut: 11,043)
Target: NA
Stop-long positions at 10,950. Stop-short positions at 11,125. Big moves could go till 11,175, 10,900. A long 10800p (111) short 10,700p (86) will pay 10-15 if the index drops to 11,900.

Bank Nifty
Current: 25,042 (futures: 25,269)
Target: NA
Stop-long positions at 25,100. Stop-short positions at 25,400. Big moves could go till 25,600, 24,900. Trend remains negative.

TCS
Current price: Rs 2,188
Target price: Rs 2,220
Keep a stop at Rs 2,170 and go long. Add to the position between Rs 2,210 and Rs 2,215.
Book profits at Rs 2,220.

Tata Motors
Current price: Rs225
Target price: Rs220
Keep a stop at Rs 228 and go short. Add to the position between Rs 221 and Rs 222. Book profits at Rs2 20.

Top trading ideas by Devang Shah: Buy TCS, PowerGrid and Granules India

NIFTY
CLOSE- 11429.50 (10.08.2018)
Market closed 3rd concecutive week in positive terriotry. It has achieved my short term targets levels on nifty near recent high as expected last week. It made a high of 11,495.20 levels on nifty & 38,076.23 levels on sensex so far in this rally. Its slow & steady extending on upsdie with high volatality. One can expect market to extend futher towards higher levels targets as mendtioend below in short to medium term. Any kind of short term consolidation or correction is stock specific buying opportunity till short term reverses.

Stock Picks:

GRANULES - BUY
CLOSE – Rs- 104.30
TARGET – Rs- 112-115
GRANULES closed the weekly in negative territory. It has wave-V up pending on daily chart. Its weekly momentum indicators are in BUY. Its trading above 20DMA. One can BUY with a stop loss of Rs-93.90 for the target of Rs 112-115 levels in short-term.

TCS - BUY
CLOSE – Rs- 1995
TARGET – Rs 2050-2100
TCS closed the weekly in positive territory. Its still trading above 20 DMA. It has wave-V up pending as per weekly chart. Risk Reward is favourable to BUY at current levels. Its daily mometum indicatros are in BUY.One can BUY with a stop loss of Rs-1870 for the target of Rs-2050-2100 levels in short-term.

POWERGRID - BUY
CLOSE – Rs- 189.25
TARGET – Rs 195-199
POWER GRID closed the weekly in negative territory. Its looks like impulsive structure from recent bottom. Risk Reward is favourable to BUY at current levels. Its daily momentum indicators are in BUY. One can BUY with a stop loss of Rs-180.35 for the target of Rs-195-199 levels in short-term.

BEL - BUY
CLOSE – Rs- 121.05
TARGET – Rs 127-133
BEL closed the weekly in positive territory. Its outperforming in short term.Its looks like end of medium term correction. Risk Reward is favourable to BUY at current levels. Its daily momentum indicators are in BUY. One can BUY with a stop loss of Rs-107.40 for the target of Rs-127-133 levels in short-term.

TCS gains 3% as Q1 profit beats Street estimate

Stock Market - Shares of Tata Consultancy Services (TCS) rose 3% to Rs 1,928 per share on the BSE in early morning trade after the country’s biggest software services exporter posted a better-than-expected rise of about 23.5% year on year (YoY) and 6.3% quarter on quarter (QoQ) in first-quarter (Q1) net profit, helped by strong growth in its banking, financial services and insurance division (BFSI).
TCS has recorded a consolidated net profit of Rs 73.40 billion in April-June 2018 (Q1FY19) versus a profit of Rs 59.45 billion in the same quarter last year. While the revenues at the reported currency grew 15.8% YoY and 6.8% QoQ to Rs 342.61 billion, in constant currency (CC) terms, it rose by 9.3% year-on-year (YoY) and 4.1% sequentially.


Analysts on an average had expected profit of Rs 69.67 billion on revenue of Rs 341.69 billion for the quarter.

“TCS Q1FY19 CC revenue growth at 4.1% QoQ is a meaningful beat to estimates and is highest in several quarters. Revenue recovery has gathered further momentum with a definite growth revival in BFSI and retail verticals. Slowdown in these two verticals had adversely impacted FY18 growth and with the recovery double digit constant currency revenue growth is almost a certainty,” Antique Stock Broking said in a result review.

TCS, Infosys push BSE IT index to new high; IT index rallies 24% in CY18

Shares of information technology (IT) companies were in focus on Monday with the S&P BSE IT index hitting record high. The raly comes on the back of a surge in prices of sector majors - Tata Consultancy Services (TCS) and Infosys - that hit a new high on the BSE in intra-day trade.
TCS hit a new high of Rs 1,871, up 1.6% on Monday, extending its Friday’s 2.7% gain the BSE after the company’s board approved a proposal to buy back up to 76 million equity shares worth about Rs 160 billion. The buyback price has been fixed at Rs 2,100 a share, a 14 per cent premium over its Friday’s closing price of Rs 1,841 market price. The promoters’ holding in the company now stands at 71.92%.

This is the second year in a row when the Mumbai-headquartered firm has decided to go ahead with a share buyback programme in a bid to return excess cash to its shareholders.

Infosys, too, hit a new high of Rs 1,291, up 0.8%, extending its previous day’s 3.3% gain on the BSE.

At 09:38 am; the S&P BSE Index up 0.1% at 13,965, hit a record high of 14,071 in intra-day trade today. On comparison, the S&P BSE Sensex was trading 0.09% lower at 35,586 points.

TCS market cap crosses Rs 7-trillion mark; stock hits new high of Rs 3,668

Tata Consultancy Services (TCS) , the country's biggest software services exporter, saw its market capitalisation (market-cap) cross Rs 7-trillion mark, adter the stock price of the company hit a new high of Rs 3,668 on the BSE in early morning trade.
At 09:19 am; TCS was trading 1.7% higher at Rs 3,666 have market-cap of Rs 7.91-trillion, the BSE data shows.

Since April 19, TCS has outperformed the market by surging 16% after the company’s board had recommended bonus issue in the ratio of 1 equity share of Re 1 each for every 1 equity shares of Re 1 each held by the shareholders of the company as on the record date. On comparison, the S&P BSE Sensex was up 0.74% during the same period.

The company has fixed Saturday, June 2, 2018 as the record date for determining the entitlement of members to receive bonus shares in the ratio of 1:1. The stock will turn ex-bonus on Thursday, May 31, 2018.

TCS had also reported a strong set of numbers in March 2018 quarter (Q4FY18) as well as for 2017-18 (FY18), backed by all-round growth in key verticals and geographies, and digital services and solutions. The company posted double-digit revenue growth in dollar terms in Q4 for the first time in the last 12 quarters. The management was confident of sustaining this growth rate in the coming quarters.

IT shares gain on weak rupee; Infosys nears 52-week high

Shares of information technology (IT) companies were trading higher as rupee extended weakness against the dollar. The frontline IT stocks such as Infosys, Tata Consultancy Services, HCL Technologies and Tech Mahindra were up in the range of 1% to 2% on the National Stock Exchange (NSE).
Persistent Systems, Larsen & Toubro Infotech, Intellect Design Arena, Zensar Technologies, Firstsource Solutions, Hexaware Technologies, SQS India BFSI, Sasken Technologies, Sonata Software and NIIT Technologies were up between 1% and 4% on the BSE.

At 11:01 am; Nifty IT index, the largest gainer among sectoral indices, was up 1.5% as compared to 0.37% rise in the Nifty 50 index.

On Wednesday, the rupee dropped 0.6% to a 17-month low of 68.42 against the dollar. The rupee is inching towards its record low of 68.85, touched on August 28, 2013. The rupee is down 8% from its 2018 high of 63.37, making it the worst-performing currency in the region.

Currency consultants have started to give a call that rupee could touch 70 to a dollar in the coming months. Abishek Goenka, managing director of IFA Global, said the rupee could extend fall till the 73-mark before March 2019, if the 10-year US Treasury yield crosses 3.5%, the Business Standard report suggested

Infosys and TCS: Two IT stocks that you can buy today

NIFTY OUTLOOK- Nifty seems to have completed a five waves rising structure from the lows of 9951.90 to 10929.20 and a retracement of the same is expected.

STOCKS TO BUY TODAY

TCS

TCS has provided a breakout from an ascending triangular pattern, which is a bullish continuation pattern. The momentum indicator MACD is well in buy mode on the hourly charts. The eekly and monthly patterns also indicate bullish momentum since the last couple of weeks. A fresh breakout with a buy confirmation from the momentum increases the probability of an upside. The short term target is Rs 3670. Maintain stop loss at Rs 3468.

Infosys

Infosys, too, has formed a nice symmetrical triangular pattern that is also a continuation pattern. The stock had an uptrend prior to this consolidation, hence a breakout on the upside can’t be ruled out. The minimum target on the upside is Rs 1,275. Maintain a stop loss at Rs 1,140. The momentum indicator is also well into buy mode, which is a bullish sign going forward.

TCS hits record high after fixing record date for 1:1 bonus issue

Tata Consultancy Services (TCS) hit a record high of Rs 3,585, up 2.4% on the BSE in otherwise subdued market, after information technology company fixed Saturday, June 2, 2018 as the record date for determining the entitlement of members to receive bonus shares in the ratio of 1:1.
The board of directors of TCS at its meeting held on April 19, 2018 had recommended bonus issue of equity shares in the ratio of 1 equity share of Re 1 each for every 1 equity shares of Re 1 each held by the shareholders of the company as on the record date.

The bonus Shares, once allotted, shall rank pari-passu in all respects with and carry the same rights as the existing Equity Shares and shall be entitled to participate in full in any dividend and other corporate action, recommended and declared after the new equity shares are allotted, TCS said in a BSE filing.

Since April 19, the stock has outperformed the market by surging 13.5% as compared to 1.5% rise in the S&P BSE Sensex.

Tata Sons sells 1.5% stake in TCS; stock falls 6%

Tata Consultancy Services (TCS) dipped 6% to Rs 2,872 on the National Stock Exchange (NSE) after the promoter Tata Sons sold around 1.5% stake in information technology (IT) major through block deals.
Till 09:27 am; a combined 34.74 million equity shares representing 1.8% holding of TCS have changed hands on the NSE and BSE.

The counter recorded a combined turnover of Rs 100-billion so far, the exchanges data shows.
As of December 31, 2017, Tata Sons held 73.52% stake in TCS, the shareholding pattern data shows.
Tata Sons is selling TCS shares in a price range of Rs 2,872 to Rs 2,925 each, according to a deal term sheet. That would be a discount of 4.2 to 5.9% to TCS's Monday closing price of Rs 3,052.15, the Reuters report suggested.
Tata Sons intends to use the proceeds from the share sale to reduce debt in the group's telecom arm Tata Teleservices which has debt of around Rs 400-billion; the PTI report suggested quoting sources.

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Buy TCS, Beger Paints, Cadila Healthcare, says Prabhudas Lilladher

STOCK MARKET - Few trading ideas by Vaishali Parekh, Research Analyst - Technical Research at Prabhudas Lilladher:
NIFTY VIEW:
The day began with a negative sense with Nifty making a low of 10,075 and immediately bounced back to confirm a double bottom formation at 10,080 levels and bounced back to 10,400 levels. The support for the day is seen at 10,330 while resistance is seen at 10,430.

BUY TCS
CMP: Rs 2580.50            
STOPLOSS: Rs 2400              
TARGET: Rs 2800
The stock has corrected from Rs 2777.40 levels in the recent past days and has maintained near its 200-DMA which is around Rs 2494. The positive candle pattern has indicated a Buy and we anticipate the stock to move up further till Rs 2800 levels. We recommend a buy in this stock keeping a stop loss of Rs 2400 and a target of Rs 2800.

BUY CADILA HEALTHCARE
CMP: Rs 417.15          
STOPLOSS: Rs 400
TARGET: Rs 450
The stock has made a bottom at around Rs 400 and has made a good recovery. With RSI on the rise, the stock looks promising for un upside target of around Rs 450. We recommend a buy in this stock keeping a stop loss of Rs 400.

BUY BERGER PAINTS
CMP: Rs 252.55        
STOPLOSS: Rs 240
TARGET: Rs 265
The stock has been consolidating for a while hovering around the range of Rs 245-255 levels and has maintained a good support at around Rs 240. The stock has been in a trending upward move in the daily chart and while the RSI indicator has reversed its trend signaling a positive outlook, we recommend a buy in this stock for an upside target of Rs 265 keeping a stop loss of Rs 240.

TCS, Polaris, LTI, MphasiS, KPIT Techno, Nucleus Software hit 52-week highs

Shares of information technology (IT) companies were trading higher for the second straight day on the bourses with Nifty IT index and S&P BSE IT index hit their respective fresh 52-week highs in otherwise range-bound market.

At 10:30 AM; the S&P BSE IT Index (up 0.74% at 10,769) and Nifty IT index (up 0.90% at 11,273) up nearly 1% as compared to a marginal 0.1% rise in the S&P BSE Sensex and Nifty 50 index.

Tata Consultancy Services (TCS), Polaris Consulting Services, MphasiS, LTI (L&T Infotech), KPIT Technologies and Nucleus Software Exports hit 52-week highs on the BSE.

Among the individual stocks, Polaris Consulting Services rallied 8% to Rs 329 in intra-day trade, after the company reported 75% year on year (y-o-y) jump in its consolidated net profit at Rs 72.3 crore in September quarter (Q2FY18).

Revenues stood at Rs 672 crore, registering 31.8% growth as compared to Q2FY17. In dollar terms, revenues stood at $104.4 million, a growth of 38.0% y-o-y and 21.4% quarter on quarter (q-o-q). On a constant currency basis, revenue increased by 38.0% y-o-y and 21.4% q-o-q.

EBITDA (earnings before interest, taxes, depreciation and amortization) margins during the quarter under review improved at 16.2% compared to 12.1% in Q2 FY17.

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STOCK MARKET NEWS - Nifty IT falls post TCS, Infosys results; sector to underperform

STOCK MARKET NEWS - Information technology (IT) sector was in focus on Friday, with the NiftyIT index falling over 1% after two of its biggest constituents, Infosys and TCS, announced their Q1FY18 results.

So far in 2017, the index has underperformed the market by gaining 2% against 18% rise in the benchmark index amid concerns of rupee appreciation, wage hikes and visa related issues.

The Nifty IT index extended losses, ending over 1% lower for teh day as compared to 0.05% fall in BSE Sensex.

While Infosys beat street expectations to gain as much as 3%, TCS was the top loser on the frontline indices on a below-estimate Q1 performance.

Shares of the second largest IT major, Infosys touched Rs 1,000-mark for the first time since May 30, 2017 after the company reported a 1.4% growth in profit to Rs 3,483 crore and revenue rise of 1.8% to Rs 17,078 crore, on the back of improved operation controls. The stock has rallied over 5% in July so far.

TCS, on the other hand, fell as much as 2.2% after it saw its first quarter profit drop 5.8% to Rs 5,950 crore due to currency fluctuations and wage hikes as the banking and financial services and retail businesses slowed. The scrip gained around 2% in July so far after a over 7% fall in June.

Going ahead, anlaysts expect the stocks to under-perform. ICICI Securities, for instance, has downgraded TCS to hold post the Q1FY18 numbers.

"Our earnings estimates for FY18/FY19 were already lower than consensus by 3-4% but we trim our estimates modestly further by 1.9% and 1.5% for FY18 and FY19, respectively. Target price moves from Rs 2,411 to Rs 2,375. Downgrade to HOLD," the brokerage said in a post result note.

TCS to shut Lucknow centre, says no job losses, staff to be relocated

India's largest IT services firm Tata Consultancy Services is shutting its Lucknow centre as part of the consolidation of its UP operations and has asked its over 1,000-odd employees to either shift to its centre in Noida, Indore or any other facility in the country

"We are consolidating our UP operations. There have neither been any job losses nor have we asked anyone to quit," said a TCS spokesperson.

TCS is also setting up a large BPO operation in Varanasi, Prime Minister Narendra Modi's constituency next year and some of these staff could  be absorbed in the centre.

The 10-year old facility in Gomti Nagar, does  internal process for TCS and has a small team that works on projects for  global clients.

TCS employees in Lucknow were briefed about the development  on Wednesday, following which they have petitioned UP chief minister Yogi Adityanath and Prime Minister Modi  for their intervention.

A  group calling themselves SaveTCSPlease has drafted a letter to these leaders claiming that around 2,000 employees, half of them women, would be affected by this shift by TCS.

The letter signed by "TCS Lucknow employees and their dependents" said that around 300-400 employees will be retained in the Lucknow premises and that most of the existing projects will be transferred to the upcoming premises in Indore. They have alleged that employees are being forced to transfer to other cities now.

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Indian IT to see margin contraction in Q1FY18 due to rupee appreciation

LATEST MARKET NEWS - The first quarter of a financial year is normally the most important one for the information technology (IT) sector; along with the second quarter, it gives the direction to the overall numbers for the concerned financial year. Given the moderate guidance for financial year 2017-18 (FY18) given by Infosys, other IT companies, and Nasscom, we believe that it will be a year of consolidation for the industry, with growth rates likely to be more or less in line with FY17 and a pick up expected by 2018.

Earlier, in its guidance for FY18, Nasscom expected the IT industry’s services exports to grow 7-8 per cent in the financial year and the domestic IT services revenue growth was pegged at 10-11 per cent.

However, on a long-term basis, the industry's growth potential can be around 10-11 per cent, given that Indian IT companies enjoy a market share of more than 50 per cent even after healthy growth over the past two decades, leaving enough room for the growth.

Further, even at the current stage, Indian IT's core competitive advantage in terms of manpower cost is still intact and hence the industry has all the levers to increase its market share in the future. However, like any other industry, Indian IT companies are going through a transition with a shift occurring towards new technologies like digital. However, we don’t see this to be a worrisome sign. Instead, it is an opportunity that companies with management skills and leadership quality will be able to cruise through.        

For Q1FY18, Indian IT companies are expected to exhibit diverse trends. Among the large-caps, Infosys, HCL Tech, and Tata Consultancy Services (TCS) are expected to post constant currency (CC) QoQ growth of 3-4 per cent. Infosys is likely to post results at the lower end of the growth band, while HCL Tech will post a CC QoQ growth at the higher end aided by its acquisitions. 

Markets continue trading near all-time highs; Nifty comfortably above 9,800

LATEST MARKET NEWS - Frontline indices extended gains to trade near all time highs in the noon trade on positive cues from the global markets.Gains were however capped as investors remianed cautious as they waited for Federal Reserve Chair Janet Yellen;s testimony for clues on when the central bank would tighten the US monetary policy.

Sensex rose as much as 131 points to hit the record high of 31,847, surpassing its previous milestone of 31768.39 hit yesterday while Nifty gained as much as 47 points to hit 9,818, surpassing the last high of 9,772 hit yesterday.

At 12:08 pm, the S&P BSE Sensex was trading at 31,844, up 128 points while the broader Nifty50 was ruling at 9,818 up 47 points

In the broader market, the S&P BSE Midcap was little changed while S&P BSE Smallcap index rose 0.4%.

"Low volumes were instrumental in yesterday’s rise. However, the vertical rise is instructive, and suggestive towards potential for similar such sharp moves. Meanwhile pull back below 9,720 sharply reduce the upside prospects," said Geojit Financial Services in a note.

Buzzing Stocks

Infosys, TCS, Tata Motors, M&M and HUL contributed the most on BSE Sensex while Cipla, Bharti Airtel, ONGC, ITC and Dr Reddy's shed the most on the index.

State Bank of India gained 1% after said its central board approved dilution of its stake in its life insurance arm through an initial public offer for which it has already secured the sectoral regulatory approval.

IT shares gain; TCS, HCL Tech near 52-week high

MARKET NEWS - http://www.business-standard.com/marketsShares of information technology (IT) companies were in focus with the Nifty IT and S&P BSE IT index gaining more than 2% in an otherwise range-bound market.

Tata Consultancy Services (TCS), Infosys, HCL Technologies, Tata Elxsi, Hexaware Technologies and Tech Mahindra were up in the range of 2% to 6%.

At 09:59 am; Nifty IT (10,895) and S&P BSE IT index (10,510) were up 2.2%, as compared to a marginal 0.08% decline in the benchmark indices.

In the past one month, the IT indices have outperformed the market by gaining 8% against 5% rise in the S&P BSE Sensex and 4.2% gain in Nifty 50 index.

TCS has rallied 4% to Rs 2,707 on the BSE in intra-day trade, quoting close to its 52-week high of Rs 2,740 touched on August 12, 2016. HCL Technologies was also up 3.3% at Rs 887, trading closer to its 52-week high of Rs 890 hit on March this year.

TCS’ buyback offer of about 56 million equity shares, which ended on May 31, received an overwhelming response. The offer was subscribed by 221% or 124 million shares. The company had fixed the buyback at price of Rs 2,850 a share.

HCL Tech buyback offer will commence from June 12 and will close on June 23, 2017. The company intends to buy back 35 million equity shares at Rs 1,000 a piece.

“The Buyback is being proposed by the Company to return surplus funds to the equity shareholders, which are over and above its ordinary capital requirements and in excess of any current investment plans. It expected to contribute to the overall enhancement of the equity shareholders’ value, and result in an increase in the return on equity of the Company,” HCL Tech said in a statement.

Tata Elxsi has surged 7% to Rs 1,598, extending its Monday’s 10% rally on the BSE, after the company announced the licensing of its advanced autonomous vehicle middleware platform “Autonomai” to one of the world’s top 5 automotive OEMs (original equipment manufacturer) for their driverless car R&D.

"The Autonomai platform provides carmakers and Tier 1 automotive suppliers with a comprehensive and modular solution covering perception, GNC and drive-by-wire systems, to quickly build, test and deploy autonomous vehicles,” Tata Elxsi, a Tata Group company said in a press release.

Get rid of 3-month notice period: Techies ask govt to ease quitting process

Latest News - The government should make it easier for IT professionals, who are expecting single-digit hikes in the coming financial year, to exit their jobs, an online petition signed by over 28,000 professionals has demanded, reported The Economic Times on Thursday.  

Their complaint? The three-month non-negotiable notice period that most IT firms hold their employees to. According to the report, the petition said, "It is unrealistic for anyone to plan that far ahead for their future actions and resign in advance not knowing state of the issue in next three months." The petition has been addressed to the Union Ministry of Labour & Employment.

Speaking to the financial daily, an IT professional, who did not want to be named, said that no company would be willing to wait for three months while their new employee serves out his or her period at their old firm. Further, the report said that Tata Consultancy Services, Infosys, Tech Mahindra, HCL Technologies, Capgemini, Accenture and IBM had a three-month notice period in place.

Growing pains

Indian companies are likely to provide single digit increments to their employees in 2017, across industries, an Aon Hewitt survey said recently. “The survey projects a drop in pay increases to an average of 9.5 per cent across industries. While it’s a marginal decrease from the 2016 (10.5 per cent) spends, it reflects maturity that India Inc has displayed amid global and Indian economic and political events. This includes recent changes in the US government and the much-talked demonetisation,” the report said. Aon Hewitt, the global talent, retirement and health business of Aon plc, conducted its 21st annual survey after speaking to more than 1,000 companies. (Read more)