Even as IT stocks have corrected sharply amidst heavy sell-off by the FPIs, there has been a sharp fall in the weight of the IT sector in the Nifty-50 index. From 17.7% weight in the Nifty in March 2022, the weight of the IT index has slipped to a 5-year low of 12.2% as of March 2023. Since the start of 2023, the combined market cap of the big-5 IT companies is down 8.2%. In the last 15 months, the combined market cap of the top-5 IT companies is down a full 28.3%. Banks and FMCG are the two sectors to see weightage gains.
HCL Tech reported 10.8% higher net profits yoy at Rs3,983 crore for the March 2023 quarter. However, the net profits were down 2.8% sequentially. Revenues showed much better traction; growing 17.7% on a yoy basis at Rs26,606 core. The company beat profits estimates but fell short on revenue estimates. HCL Tech has guided revenue growth range of 6-8% in constant currency (CC) terms for FY24 and has also guided operating margins in the range of 18-19%. Banks did exert some pressure on HCLT Tech in Q4FY23.
ITC joined the elite group of companies with market cap of over Rs500,000 crore as the stock touched an all-time high of Rs402.60 on Thursday. ITC now stands eighth in the pecking order of the most valuable companies listed in India and has been one of the biggest gainers of the last one year. This was driven by strong recovery in the core cigarette business, double-digit growth in FMCG business, and sharp recovery in the contact intensive hotels business. FPIs hiked their stake in ITC for third quarter in a row to 12.87%.
Even as hotels are showing green-shoots of recovery, hotel stocks staged a rally on Thursday, gaining as much as 10% in intraday trades. This was amid expectations of sharp growth in top line, flat to better occupancy rates and, above all, a spike in the average room rates (ARR). While Lemon Tree Hotels and Kamat Hotels rallied between 6% to 10%, the rally in Indian Hotels and Chalet Hotels was more subdued. The year is also likely to see a surge in tourism, revenge spending as well as a slew of major global events.
The minutes of the last Monetary Policy Committee (MPC) meeting announced on 20th April, showed that the rate tightening cycle may not be over, since inflation triggers were still there. Hence, the rate pause in April must not construed as the end of rate hikes in India. Jayant Varma underlined that it may be too early to call victory over inflation as erratic monsoons and volatile oil prices remain a challenge. Recently, the OPEC-Plus (including Russia) had announced sharp cuts in output to help shore up the crude oil prices.
Kumar Mangalam Birla has come back to the board of Vodafone Idea Ltd as additional director less than 2 years after resigning from the board. He was formerly the chairman of the struggling telecom company. The Aditya Birla Group holds an 8.36% stake in Vodafone Idea as per Refinitiv data. With the government converting its dues into equity, it has already become the largest shareholder in Vodafone idea. However, Vodafone had huge net debt of Rs223,000 crore, but that would have reduced post the equity conversion.
IPO experts feel that primary markets could cool further since most of the anchor investors burnt their fingers in new-age technology IPOs in the last 2 years. FY23 was relatively tepid in terms of new-age IPOs, with Delhivery being the only high profile digital IPO to hit the market. However, FY22 had seen big ticket digital IPOs like Zomato, Nykaa, CarTrade, Paytm and Policybazaar; but all of them had faltered post listing. The only sentimental booster that IPO markets can hope for is if the Fed calls a top on its interest rates.
Goldman Sachs has sold about 5 lakh shares in PNB Housing Finance via open market transactions. These deals were done through the open market and Nippon India Mutual Fund was one of the key buyers in the counter. Goldman had sold 0.29% stake in PNB Housing. The entire transaction was executed at a value of Rs57 crore. In the December 2022 quarter, PNB Housing reported 43% higher net profits at Rs269 crore, helped by growth in core interest income. The retail book comprises 92% of total home loan book.