<ul><li>The earnings season for the banking sector will start with <keyword id="6357149" type="General" weightage="20" keywordseo="hdfc-bank" source="Orion">HDFC Bank</keyword>’s results scheduled to be announced on April 15 followed by <keyword id="6653" type="General" weightage="20" keywordseo="icici-bank" source="Orion">ICICI Bank</keyword>’s on April 22.</li><li>Motilal Oswal expects credit growth of 15.7% on year for the banking sector in FY23 and 13.3% in FY24.</li><li>As deposit rates have been rising with hike in interest rates, analysts are positive on deposits but worry about credit growth amid high borrowing rates.</li></ul>Banks are expected to report a healthy credit growth in the January to March quarter driven by traction in retail, small and medium enterprise (SME) and corporate customers, as per analysts at Motilal Oswal. The earnings season for the banking sector will start with HDFC Bank’s results, scheduled to be announced on April 15, followed by ICICI Bank’s on April 22. The brokerage house expects credit growth of 15.7% on year for the banking sector in FY23 and 13.3% in FY24. While the credit book of the corporate segment witnessed a gradual recovery, a pick-up in capex among corporates would be key to sustain growth momentum ahead. “Home, vehicle, unsecured, and small business segments continue to do well, while demand for commercial vehicles is also improving. The credit card business is seeing healthy momentum, with robust growth in spends,” said the report by Motilal Oswal. Bank deposits up with rate hikes but credit growth worth watching As deposit rates have been rising with hike in interest rates, analysts are positive on deposits, but worry about credit growth amid high borrowing rates. Since May 2022, RBI has hiked the repo rate six times, making bank deposits attractive again. This is reflected in the healthy growth in bank deposits in the March quarter. HDFC Bank on Tuesday reported strong growth in deposits and advances with 21% growth in deposits and 16.9% in advances at ₹18.8 lakh crore and ₹16 lakh crore respectively as on March 31, 2023. At the same time, private sector lender Bandhan Bank's advances grew 9.8% and deposits jumped 12.2% in the March quarter. “Deposit rates have increased sharply over the past few months, with liability accretion gaining importance. However, the gap v/s credit growth still remains high. While we expect a stable-positive bias in margins in 4QFY23, the rise in the cost of deposits and further rate hikes would influence the margin trajectory in FY24. Margins are likely to see some pressure in FY24, in our view,” said the report by Motilal Oswal. This week will provide direction to the sector growth going ahead as the Reserve Bank of India is expected to announce a decision on interest rate hike in its bi-monthly monetary policy this Thursday. Economists are expecting an increment of 25 basis points in the repo rate to 6.75%. Further, any change in the demand environment, considering the challenging macro situation, elevated inflation and a high base effect are key monitoring points for the sector. Expect muted revenue growth for IT sector in Q4 amid weak macro Earnings season for the information technology services sector will begin with the results of Tata Consultancy Services that will be out on April 12 followed by Infosys on April 13 and HCL Technologies on April 20. Motilal Oswal expects muted revenue growth for the sector as weak macroeconomic factors like the recent banking crisis in the key markets of the US and Europe may impact spending by banks there. “Our IT Services coverage universe is expected to deliver a median revenue growth of 0.8% quarter-on-quarter and 9.2% year-on-year in constant currency (CC) terms in 4QFY23,” said a report by Motilal Oswal. The report suggests that although Indian IT services firms do not have meaningful exposure to the affected US regional banks, fears of a banking crisis could impact near-term IT spending by banks. Moreover, the impact of the crisis in the companies’ March quarter earnings will be the key monitorable during the 4Q management commentaries. “Apart from banking, financial services and insurance (BFSI), hi-tech, manufacturing and retail may also report muted growth in 4Q. Clients have started to cut discretionary spends while increasing focus on cost efficiency. IT services companies are seeing a shift to cost optimisation deals, along with increased vendor consolidation deals in the pipeline,” said the report. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/thelife/personalities/news/three-of-indias-16-new-entrants-are-women-in-the-forbes-billionaires-2023-list/slidelist/99262173.cms">Forbes Billionaires 2023: Three of India’s 16 newcomers on the list are women</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/finance/banks/news/loan-growth-showing-signs-of-reversal-from-cyclical-highs-but-asset-quality-to-remain-healthy/articleshow/99245377.cms">Loan growth showing signs of reversal from cyclical highs, but asset quality to remain healthy</a>

Banks to drive earnings growth in Q4 while IT services to report muted numbers

<ul><li>Indian banks could see a further boost in their earnings in the December quarter thanks to loans being repriced upwards.</li><li>Despite loan growth being at a near-decade high of 17.4%, brokerages expect banks to witness more growth.</li><li>Rising interest rates will also reflect in the net interest margins expanding further in Q3, while asset quality is expected to moderate further, analysts say.</li></ul>Indian banks could see a further boost in their earnings in the December quarter as the benefits of loans being repriced upwards are expected to continue flowing in, say analysts. <a href="https://www.businessinsider.in/finance/news/rbi-hikes-repo-rate-by-35-bps-taking-rates-to-a-high-of-6-25/articleshow/96045841.cms">RBI hiked interest rates by 225 basis points so far</a>, following the US Fed’s rate hike action. While banks have benefited from rate hikes in Q2 as well, analysts see more room for a further ramp up in Q3 as well. “Q3 FY23 earnings growth momentum on a sequential basis is likely to be better on the following grounds: continuing benefit of upward repricing in external benchmark-linked rate (EBLR) and marginal cost of funds-based lending rate-linked (MCLR) loans is likely to outweigh pressures on funding costs,” said a report by <keyword id="46909" type="General" weightage="80" keywordseo="icici-securities" source="Orion">ICICI Securities</keyword>. ICICI Securities expects the banks in its coverage, including <keyword id="13222" type="General" weightage="80" keywordseo="sbi" source="Orion">SBI</keyword>, HDFC Bank, Axis Bank, Kotak Mahindra Bank, among others, to report a 40% year-on-year increase in net profit, edging up from a cumulative ₹37,037 crore in Q2 FY23 to ₹40,006 crore in Q3 FY23. On the other hand, it estimates the net interest income to grow over 20% year-on-year, in line with analysts at Motilal Oswal, who estimate a growth of 24%. “Margins to exhibit a positive bias, supported by rising interest rates and healthy pick up in business growth,” said Motilal Oswal in its earnings preview. <cmsannotation type="cmsannotation" annotationid="Loan growth to continue while asset quality to moderate" comment="subhead" text="Loan growth to continue while asset quality to moderate">Loan growth to continue while asset quality to moderate</cmsannotation> Loan growth is another metric that has continued to show improvement, rising to a near-decade high of 17.4% in December 2022, according to the Reserve Bank of India’s Financial Stability Report. Despite touching a near-decade high, brokerages expect banks to report a continued increase in loan growth. Net non-performing assets (Net NPAs) – which are at their lowest in the last 10 years – are also expected to improve further sequentially, according to ICICI Securities. The brokerage estimates the banks in its coverage to report net NPAs in the range of 0.3-4.5%, when compared to a range of 0.3-4.8% in the previous quarter. “We estimate slippages to continue to moderate, which, along with healthy recoveries, should result in a further improvement in asset quality,” said Motilal Oswal. <cmsannotation type="cmsannotation" annotationid="Valuations reasonable, says Jefferies" comment="subhead" text="Valuations reasonable, says Jefferies">Valuations reasonable, says <keyword id="151304" type="General" weightage="80" keywordseo="jefferies" source="Orion">Jefferies</keyword></cmsannotation> In 2022, the Nifty Bank index registered a growth of over 21.2%, while the benchmark Nifty50 index gained 4.3%. Despite this, analysts at Jefferies say that bank valuations are reasonable. “Despite re-rating and good earnings visibility for 2023, valuations are reasonable. With the performance gap between private and PSU banks narrowing, the range of valuations will also narrow,” said Jefferies, adding that the healthy credit growth will aid profitability. The brokerage added that <keyword id="6653" type="General" weightage="80" keywordseo="icici-bank" source="Orion">ICICI Bank</keyword> and State Bank of India remain its top picks amongst large banks, while <keyword id="46717" type="General" weightage="80" keywordseo="indusind-bank" source="Orion">IndusInd Bank</keyword> is its pick in the midcap segment. “ICICI Bank stays top-pick as it offers the best risk reward ratio across peers with superior growth, improved asset quality and higher return on equity,” the brokerage said. It added that SBI and IndusInd Bank are both well-positioned to deliver earnings growth and ramp up lending. SEE ALSO: <a href="https://www.businessinsider.in/business/startups/news/skippi-ice-pops-what-this-hyderabad-popsicle-brand-is-doing-after-raising-rs-1-crore-from-shark-tank-india-season-1/articleshow/96759786.cms">Skippi Ice Pops – how the Hyderabad-based popsicle brand fared after bagging a ₹1 crore deal on Shark Tank India S1</a> <a href="https://www.businessinsider.in/business/corporates/news/tcs-infosys-wipro-and-other-it-companies-earnings-preview-for-q3-fy23/articleshow/96731891.cms">December quarter likely to be a weak one for the IT sector – Infosys amongst top analyst picks</a> <a href="https://www.businessinsider.in/business/auto/news/pv-and-2w-sales-disappoint-in-december-but-stronger-growth-ahead-say-analysts/articleshow/96732246.cms">PV and 2W sales disappoint in December, but stronger growth ahead, say analysts</a>

Bank earnings could see a further ramp up in Q3, say analysts

<ul><li>The second quarter has always been a historically strong quarter, but Q2 FY24 is expected to be soft.</li><li>The demand picture is still weak and for most sectors, the slowdown has not bottomed out.</li><li>Vendor consolidation has led to a few large deal wins by the Big 3, but conversion to revenues will be slow.</li><li>Margin expansion will also be tough with a stable Rupee and cost levers yet to kick in. </li></ul>Little has changed for the Indian <keyword id="46964" type="General" weightage="20" keywordseo="it-sector" source="Orion">IT sector</keyword> in the last three months. The second quarter earnings are expected to be as muted as the quarter before. IT sector clients are continuing with their budget squeezes, cuts in discretionary spending that’s bringing in less into the companies’ revenue kitty. Top-tier IT companies are expected to see a 0.8% fall in constant currency revenues to a tad over 1% growth on a quarter-on-quarter basis. At the highest end of the most optimistic expectations is a 1.3% growth. On a year-on-year basis too, most see lower single digit growth or a fall – showing that the fear of recession has taken over the market. Most analysts expect <keyword id="6354512" type="General" weightage="20" keywordseo="infosys" source="Orion">Infosys</keyword> to retain its FY24 revenue growth, guidance of 1-3.5%. <keyword id="141968" type="General" weightage="20" keywordseo="hcl-tech" source="Orion">HCL Tech</keyword> is widely expected to cut its 6-8% growth projections. Most others are expected to veer towards the lower end of the guidance as the first half remains muted. Where is the budget flush? The much awaited budget flush that could have changed the fortunes of the sector is still evasive. “The second quarter of FY24 is likely to be incrementally better than the first quarter. But nowhere close to what most players envisaged at year-beginning. Hopes of finding a bottom in the first half has not materialised, we believe, as project ramp downs/cancellations continue,” says a report by J M Financial. The second quarter has always been a historically strong quarter. And, this theory is all set to change. “Most of the demand indicators are trailing 10-15% below levels at the beginning of the year and only slightly better than the July lows,” said HDFC Securities. Across sectors, budget cuts have played out differently. For the key BFSI sector, spend cuts have bottomed out. The recovery however is gradual and may not be visible before FY25, says HSBC. Telecom sector which was one of the worst affected, along with high-tech and retail, could also bottom out in the second quarter. “We think the spending cuts have been unsustainably aggressive. Hi-tech demand has already started to improve from 2Q. Further, verticals like O&amp;G and manufacturing continue to do well,” says HSBC, which believes that Q2 will see a slight positive growth. It however does not see any major budget flush or V-shaped recovery. Expected change in Constant Currency Revenues (QoQ) <table style="border-width: initial; border-style: none; table-layout: fixed; width: 468pt;" class="redcator-table-advance"><colgroup></colgroup><col /><col /><col /><col /><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Company </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Kotak </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">J M Financial </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">IIFL Securities </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">TCS </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">0.5% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">1% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">1.2% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Infosys </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">0.6% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">1% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">1.3% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Wipro </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">-0.6% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">0.8% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">-1% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">HCL Tech </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">0.8% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">0.8% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">1.1% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">TechM </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">0% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">-1% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">-0.5% </td></tr></tbody><tbody></tbody><tbody></tbody></table>Source: Research reports Big deals, slow conversion Budget squeezes led to consolidation, with IT clients going in for mega deals. All the big three made top deal announcements in Q2. Infosys bagged a EUR1.5 billion deal from Liberty Global, in addition to a $454 million deal from Danske Bank. <keyword id="6357150" type="General" weightage="20" keywordseo="tcs" source="Orion">TCS</keyword> bagged a £800 million deal from Jaguar Land Rover. It also won a NEST € 810 million deal from NEST. HCL Tech also won a $2.1 billion deal from Verizon. “We believe deal flow has steadied after the transition from discretionary spending-powered short-tenured programs to larger programs fueled by cost take-outs, which have longer sales cycles,” said Kotak Institutional Equities. These kinds of deal wins are expected to continue and grow through the financial year, as discretionary spending. “While most IT services firms saw a further moderation in year-on-year revenue growth in the June quarter, deal wins accelerated. Since then, the large and mega deal win momentum has quickened, giving us confidence in strong growth for FY25,” said BNP Paribas. Large deals, however, are spread across five years, and tend to convert slowly into revenues. “Barring re-badging deals, ramp-up and hence revenue conversion of mega deals tend to be long drawn,” says J M Financial. The most watched metric for the IT sector this season would be Total Contract Value-to-revenue conversion pace. The others would be the extent of compression in the existing book of business, and greater-than-normal furloughs, says a report by Nirmal Bang. Rupee, salaries &amp; margins One advantage of a soft macroeconomic environment is Rupee depreciation that adds to the margins of IT companies. Rupee depreciated only by 1% on a quarter-on-quarter basis, adding little to the sectoral margins. “This slowdown is different. Indian Rupee is relatively stable and Covid-19-led cost rationalisation is still unwinding like travel costs and onshore mix,” says HSBC Global Research. Margin management is also expected to be tough going forward as the operating environment has turned hard. Unplanned benching due to sudden ramp-downs, shift in revenue mix towards cost-takeout deals and lower growth will add to the pain on the profitability end. Kotak also expects a marginal decline in the EBIT margin on year-on-year comparison, except TechM where the decline will be sharp. Increase in costs such as travel and back-to-office expenses will hurt. “Cost levers are yet to fully kick in,” the research firm adds. On the other hand, net hiring has been all but flat for most IT sector companies. Moreso, Infosys, HCL Tech and <keyword id="10862" type="General" weightage="20" keywordseo="wipro" source="Orion">Wipro</keyword> have all delayed wage hikes which can help, along with other cost rationalization programmes. <div type="javascript" title="Custom" contenttype="Text"><cdata><![CDATA[<blockquote class="stocktwits-embedded-post" data-origin="https://stocktwits.com" data-id="546814442"> IT sector has been going thorugh a downcycle from last 3-4 Quarters. $INFY.NSE is down 24% from the Top. Being a Large cap, its a significant correction. Same goes for $TCS.NSE which is down by 9% Meanwhile $WIPRO.NSE is down 43% which is a huge correction. Now the Ques is that when does the next upcycle starts. i think, Cycles are generally longer, they work in qauarters and years and not in months. For last 6-7 quarters, Operating profit margins are consolidating. they have not crashed though. Sales is nearly ATH and valuation is Fairly valued. But i would wait for some Triggers to confirm that the new cycle is coming. These triggers can come in the form of Corporate Actions/Promoter hoding change or Govt intervention. So i am tracking these companies so that i can make sizable enty and hold for long term. One more trigger i am tracking is heavy firing. If Operating cost is reduced overnight, it can work as a trigger for next upcycle. &mdash; (@NikhilGangil) <a href="https://stocktwits.com/NikhilGangil/message/546814442"> October 05, 2023</a></blockquote><script async src="https://stocktwits.com/min/widgets.js" charset="utf-8"></script>]]></cdata></div>

Earnings preview: Q2 to be another washout quarter for IT sector, market to focus on execution

<ul><li><keyword id="6357149" type="COMPANY" weightage="20" keywordseo="hdfc-bank">HDFC Bank</keyword> is likely to outperform its peer in first-quarter earnings result to be released on July 18 even as most banking earnings are expected to stay mute due to the impact of the coronavirus.</li><li>In the view of Reserve Bank of Moratorium on loan payment, asset quality may take a hit.</li><li>Margins are likely to remain under pressure due to due higher liquidity on the balance sheets and repo rate cuts. </li></ul>HDFC Bank is expected to fare better than its peer as it lines up to fire its first-quarter earnings on July 18. Analysts expect that while the banks will be bearing the impact of the coronavirus pandemic, large private banks — like HDFC Bank and Axis Bank — may report relatively better credit growth as compared to others. “With single-digit moratorium indication and strong credit growth of 21% YoY, the bank remains one of the best templates,” said ICICI securities in its preview. <div type="image" title="HDFC Advances (1)" msid="77013961" hostid="261" caption="&amp;lt;p&amp;gt;HDFC&amp;#39;s credit growth in the last five quarters&amp;lt;/p&amp;gt;"></div> HDFC Bank’s sale of the stake in HDFC Life and the dividend from the uptake in its share price will help boost the bank’s income. “Banks with a relatively lower moratorium, higher contingent provision and secured retail portfolio including HDFC Bank and Axis Bank are seen reporting a steady performance,” ICICI Securities added. <div type="image" title="snapshot-1594968065784" msid="77013932" hostid="261" caption="&amp;lt;p&amp;gt;HDFC Bank&amp;#39;s share price over the last three months&amp;lt;/p&amp;gt;"></div> HDFC Bank’s Asset quality HDFC Bank’s asset quality may be impacted with ICICI Securities estimating that it will be impacted by at least 10 basis points (bps) — 100 bps is equivalent to 1%. Gross non-performing assets <div type="image" title="HDFC NPA" msid="77013979" hostid="261" caption="&amp;lt;p&amp;gt;HDFC Bank&amp;#39;s gross and net non-performing assets (NPAs) over the last five quarters&amp;lt;/p&amp;gt;"></div> Banks are expected to increase provision for bad loans to keep balance sheets strong. The metric to watch for will be the collection efficient trends to see if the proportion of loans under moratorium begin to decline gradually to assess the bank’s health believes Motilal Oswal. The Yes Bank crisis was a blessing in disguise for HDFC bank with deposits rising and estimated to have grown at 25% in on a yearly basis in Q1FY20. “NII growth is seen at 18% YoY [year-on-year],” said ICICI Securities’ preview. Analysts estimate that loan growth in retail will likely be moderate due to the impact of the coronavirus that has resulted in over discretionary consumer spending and muted wholesale lending trends. Rate cuts push on margins “Margin trajectory is likely to decline affected by the sharp cut in repo rate/MCLR across banks,” said Motilal Oswal. Last week, HDFC Bank cut its marginal cost of funds-based lending rate (MCLR rate) by 20 bps across all tenors. It used to indicate the lowest rate of interest that a bank can charge its lenders to encourage more people to take loans by making them cheaper. The MCLR applies to all kinds of loans — education, home, personal, easy loans and fast loans among others. <table style="border-width: initial; border-style: none; width: 468pt; table-layout: fixed;"><colgroup></colgroup><col /><col /><col /><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Tenor </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">New MCLR (%) </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Old MCLR (%) </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Overnight </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">7.1 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">7.3 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">1 month </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">7.15 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">7.35 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">3 months </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">7.2 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">7.4 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">6 months </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">7.3 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">7.5 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">1 year </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">7.45 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">7.65 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">2 years </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">7.55 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">7.75 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">3 years </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">7.65 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">7.85 </td></tr></tbody></table> However, the bank’s margin is likely to remain under pressure due to MCLR cuts and more liquidity on the balance sheet. “Moreover, declining interest rates along with higher liquidity on the balance sheets should keep margins under pressure,” said its report with an estimate of around 10 to 20 bps for private banks like HDFC Bank. SEE ALSO: <a href="https://www.businessinsider.in/india/news/tax-fraud-1377-exporters-who-claimed-1875-crore-igst-refund-untraceable/articleshow/77013796.cms">Tax fraud: 1,377 exporters who claimed ₹1,875 crore IGST refund 'untraceable'</a> <a href="https://www.businessinsider.in/stock-market/news/morgan-stanley-is-on-track-to-resume-stock-buybacks-and-raise-its-dividend-in-2021-ceo-says/articleshow/77006628.cms">Morgan Stanley is on track to resume stock buybacks and raise its dividend in 2021, CEO says</a> <a href="https://www.businessinsider.in/business/news/sbi-card-ceo-resigns-ashwini-kumar-tewari-to-takeover/articleshow/76997893.cms">SBI Card CEO resigns, Ashwini Kumar Tewari to takeover</a>

HDFC Bank may see credit growth but its margins will continue to remain under pressure in Q1

<ul><li>HCL Technologies guidance sets second quarter revenue to jump by ‘at least’ 3.5%, according to the company's mid-quarter review. </li><li>Analysts believe growth may be even higher led by the demand of the company’s <keyword id="10113878" type="UNKNOWN" weightage="20" keywordseo="information-management-systems">Information Management Systems</keyword> (IMS) product offerings after expansion of partnership with IBM.</li><li>Cloud adoption, core transformation and digital adoption will be HCL Tech’s key strengths.</li></ul>HCL Technologies believes its revenue is set to grow by ‘at least’ 3.5% this quarter, according to its mid-quarter review. The company’s main strengths in the second quarter will be higher demand for cloud adoption, core transformation, and digital adoption. Unlike its peers, Infosys and Tata Consultancy Services (TCS), HCL Tech is only known to have bagged one large deal in the last quarter. The company announced that it would be helping the Swedish telecom giant Ericsson with infrastructure management, which includes cloud migration and application services. According to management, the acquisition of Australia-based AWS will only be finalised by the end of the year. “We continue to expect it (HCL Tech) to be one of the winners in the accelerating demand for IT megatrends around cloud migration and AI adoption,” said brokerage Nirmal Bang in its report. The company's share price has climbed by 19.1% since the company announced its mid-quarter review. <div type="image" title="HCL tech share price (2)" msid="78685203" hostid="261" caption="&amp;lt;p&amp;gt;HCL Tech&amp;#39;s share price since mid-quarter review announcement&amp;lt;/p&amp;gt;"></div> Analysts are looking at HCL Tech with optimism and banking on the Indian IT services giant to exceed its 3.5% target and increase annual guidance. Edelweiss Research estimates that the company will revise guidance from 1.5% to 2.5% increase in revenue to at least 2.5% to 3.5% for the second-half of the current fiscal year. HCL Tech second quarter revenue and margin estimates: <table style="border-width: initial; border-style: none; width: 468pt; table-layout: fixed;"><colgroup></colgroup><col /><col /><col /><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Brokerages on HCL Tech </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Expected quarterly growth in revenue in Constant Currency (CC) </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Expected change in EBIT margins </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Edelweiss Research </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">4.5% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">80 bps </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Nirmal Bang </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">4% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">10 bps </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Nomura </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">3.6% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">20 bps </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Phillip Capital </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">3.6% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">50 bps </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">ICICI Direct Securities </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">3.5% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">80 bps </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">HDFC Securities </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">3.5% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">47 bps </td></tr></tbody></table> HCL Tech and its Information Management Systems (IMS) Since one of the primary factors of HCL Tech’s success has been the impetus on cloud migration, any commentary around demand trends regarding the adoption of Information Management Systems (IMS) will be critical. “Growth will be led by strength in IMS driven by demand for shift to cloud and remote working in Q2,” said Japanese brokerage Nomura in its report. So far, HCL Tech has consistently gained market share with its IBM products drawing the most demand. The company’s recent expansion of its partnership with IBM should result in better performance. The pricing pressure on IMS is also limited. “IMS to witness acceleration due to increasing demand from cloud migration &amp; hybrid cloud adoption,” said Prabhubas Lilladhar. According to the brokerage, there is likely to be a more robust revival in IMS, given that its overall penetration in the Indian IT industry is still low between 4% to 5%. Analysts are also curious to know more about the company’s reasons for acquiring companies in legacy areas. “The acquisition of DWS is likely to add around 0.25% to overall revenue for FY21, given the transaction is expected to close in December 2020,” said Nomura. Use of cash and how HCL Tech will bridge the gap between it and its peers in the field of Apps are among the key things to watch out for. SEE ALSO: <a href="https://www.businessinsider.in/finance/banks/news/pnb-yes-bank-central-bank-of-india-idbi-and-six-more-indian-banks-are-the-worst-performing-bank-stocks-in-asia-pacific/articleshow/78679569.cms">10 out of 15 worst-performing bank stocks in Asia-Pacific are Indian — PNB, YES Bank, Central Bank of India, IDBI among them</a> <a href="https://www.businessinsider.in/tech/news/whatsapp-google-amazon-and-facebook-under-the-scanner-for-data-protection-violations-as-supreme-court-calls-on-rbi-and-npci-to-investigate/articleshow/78678174.cms">Whatsapp, Google, Amazon and Facebook under the scanner for data protection violations as Supreme Court calls on RBI and NPCI to investigate</a> <a href="https://www.businessinsider.in/defense/news/chinese-president-xi-jinping-tells-marine-troops-to-be-on-high-alert-and-prepare-for-war/articleshow/78675715.cms">Chinese President Xi Jinping tells marine troops to be on ‘high alert’ and ‘prepare for war’ as tensions in the South China Sea continue to grow</a>

HCL Tech's second quarter to see a boost from cloud adoption — analysts expect it to breach 3.5% revenue growth guidance

<ul><li><keyword id="6357585" type="COMPANY" weightage="20" keywordseo="tata-consultancy-services">Tata Consultancy Services</keyword> (TCS) will post its third-quarter earnings on January 17.</li><li>The quarter is seasonally weak of IT companies and TCS is expected to post moderate growth.</li><li>Key announcements to look out for are updates around budget trends for 2021, the slowdown in banking and retail, and future hiring.</li></ul>Tata Consultancy Services (TCS) will post its third-quarter earnings today. Estimates are as low zero growth in dollar revenue, but as seen in the case of Infosys even a 1% growth was <a href="https://www.businessinsider.in/business/corporates/news/infosys-earnings-report-muted-quarterly-growthly-of-1-in-q3-2020/articleshow/73190620.cms">enough to cheer the market</a>. At today's opening bell TCS was trading at ₹2240.75 and on the rise. The company’s banking, financial services and insurance business continues to be weighed down by the softness of European banks amid the crisis. Retail will also continue to see pressure due to macro-economic factors. However, manufacturing and communications are forecast to post strong growth. "TCS is expected to post a moderate growth of 1.1% quarter-on-quarter in USD terms," states Narlonia’s market analyst, Niharika Ojha. 
 
 
 
 
 
 
 
 
 
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 Revenue growth could end up being even lower considering furloughs and last quarters numbers that fell below expectations, according to Nirmal Bang. EBIT margins are expected to improve by 50 basis points (bps) to 24.5% since the last quarter has been free of wage hikes and improvement in operational efficiency. However, the additional costs of external consultants will continue to drag margins that may keep TCS from achieving its goal of widening margins to 26-28% by the end of the year. In light of lower revenue growth as well as slower growth of other incomes, profits are expected to decline by a quarterly 1.3%. Announcements to track Today’s earnings call will be integral to establish the outlook of budgets and client spending in 2021 — considering the US and European markets that are currently under stress. Supply-side commentary on onsite talent, localisation, sub-contracting and availability of offshoring lever, are also key monitorables according to HDFC Securities’ report. Till now, TCS has managed hiring and attrition better than its peers, like Wipro and Infosys. Trends for onboarding new talent in the coming year will also be key for the company. See also: <a href="https://www.businessinsider.in/business/corporates/news/hcl-tech-tech-mahindra-infosys-wipro-q3-2020-earnings/articleshow/73169254.cms">HCL Tech and Tech Mahindra may post better earnings as Euro bank crisis affects Infosys, Wipro</a> <a href="https://www.businessinsider.in/business/corporates/news/infosys-earnings-report-muted-quarterly-growthly-of-1-in-q3-2020/articleshow/73190620.cms">Infosys has raised full-year growth guidance⁠— the stock market was a step ahead of it</a> <a href="https://www.businessinsider.in/business/corporates/news/us-iran-tensions-strengthen-dollar-giving-boost-to-indian-tech-stocks/articleshow/73081294.cms">US - Iran tensions strengthen dollar giving boost to Indian tech stocks</a>

The expectations from TCS for Q3 are so poor — there may be room for surprise

Airtel Digital TV, the DTH arm of Bharti Airtel, on Tuesday joined hands with <keyword id="8615140" type="COMPANY" weightage="20" keywordseo="Aakash-Educational-Services-Limited">Aakash Educational Services Limited</keyword> (Aakash) to launch a <keyword id="10100772" type="UNKNOWN" weightage="20" keywordseo="dedicated-tv-channel">dedicated TV channel</keyword> -- Aakash Edu TV -- for medical and engineering entrance test preparation. Aakash Edu TV, which is available exclusively on Airtel Digital TV, will provide high-quality coaching sessions to students across India who are preparing for entrance exams such as JEE/Advanced and NEET. Best-in-class faculty of Aakash will teach the students through live interactive classes and help students learn key concepts and solve problems. Starting at just Rs 247 per month, <keyword id="10100773" type="COMPANY" weightage="20" keywordseo="aakash-edu-tv-jee-and-foundation">Aakash Edu TV-JEE and Foundation</keyword> will be available on <keyword id="10100774" type="COMPANY" weightage="20" keywordseo="airtel-dth-channel-number-467">Airtel DTH Channel Number 467</keyword> and Aakash Edu TV-NEET will be available on Airtel DTH Channel Number 478. "This partnership further underscores the high potential for innovation in DTH and improving the lives of our customers by offering value-added digital services," Sunil Taldar, DirectorHomes, Bharti Airtel, said in a statement. The channels are available as Free Preview till October 21, the company said. "This programme transcends geographical boundaries and does away with the dependence on modern gadgets and internet facility," said <keyword id="2777888" type="PERSON" weightage="20" keywordseo="Aakash-Chaudhry">Aakash Chaudhry</keyword>, Director and CEO, Aakash Educational Services Limited (AESL). SEE ALSO: <a href="https://www.businessinsider.in/policy/economy/news/gst-council-and-states-fail-to-reach-consensus-on-compensation-cess-no-dispute-we-may-have-differences-says-sitharaman/articleshow/78624857.cms">GST council and states fail to reach consensus on compensation cess — 'No dispute, we may have differences,' says Sitharaman</a> <a href="https://www.businessinsider.in/stock-market/news/banking-stocks-like-sbi-hdfc-axis-icici-and-other-share-price-in-the-stock-market-ahead-of-the-moratorium-verdict/articleshow/78633357.cms">SBI, HDFC Bank, Axis Bank and other bank stocks tread caution as they wait with bated breath for Supreme Court verdict on moratorium</a>

Airtel partners with Aakash Institute to bring medical and engineering education content to its DTH platform

<ul><li>Marcotech Developers is now live on the exchanges listing at a share price of ₹436.</li><li>This is a 10.3% dip from the subscription price of ₹486 per share.</li><li>Prior to listing, the ₹2,500 IPO saw lukewarm response from investors, only being subscribed to 1.36 times. </li></ul><keyword id="7940335" type="UNKNOWN" weightage="20" keywordseo="Macrotech-Developers">Macrotech Developers</keyword>, formerly known as <keyword id="6473062" type="UNKNOWN" weightage="20" keywordseo="Lodha-Developers">Lodha Developers</keyword>, saw its initial public offering (IPO) list at a 10.3% discount on the National Stock Exchange (NSE). Its share price at 10:00 am, the time of listing, was ₹436 versus the subscription price of ₹486. Within the first 10 minutes, the price was able to reach a high of ₹472.95 before dipping back down to ₹458 at 10:10 am. The company’s ₹2,500 crore initial public offering (IPO) received a lukewarm response from investors after only seeing a subscription rate of 1.36 times. <table style="border-width: initial; border-style: none;"><colgroup></colgroup><col /><col /><col /><col /><col /><tbody><tr><td style="border-left:solid #000000 0.9907650000000001pt;border-right:solid #000000 0.9907650000000001pt;border-bottom:solid #000000 0.9907650000000001pt;border-top:solid #000000 0.9907650000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Macrotech Developers IPO </td><td style="border-left:solid #000000 0.9907650000000001pt;border-right:solid #000000 0.9907650000000001pt;border-bottom:solid #000000 0.9907650000000001pt;border-top:solid #000000 0.9907650000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Qualified Institutional Buyer </td><td style="border-left:solid #000000 0.9907650000000001pt;border-right:solid #000000 0.9907650000000001pt;border-bottom:solid #000000 0.9907650000000001pt;border-top:solid #000000 0.9907650000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Non-institutional Investor </td><td style="border-left:solid #000000 0.9907650000000001pt;border-right:solid #000000 0.9907650000000001pt;border-bottom:solid #000000 0.9907650000000001pt;border-top:solid #000000 0.9907650000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Retail Individual Investor </td><td style="border-left:solid #000000 0.9907650000000001pt;border-right:solid #000000 0.9907650000000001pt;border-bottom:solid #000000 0.9907650000000001pt;border-top:solid #000000 0.9907650000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Total </td></tr><tr><td style="border-left:solid #000000 0.9907650000000001pt;border-right:solid #000000 0.9907650000000001pt;border-bottom:solid #000000 0.9907650000000001pt;border-top:solid #000000 0.9907650000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">No. of times issue subscribed </td><td style="border-left:solid #000000 0.9907650000000001pt;border-right:solid #000000 0.9907650000000001pt;border-bottom:solid #000000 0.9907650000000001pt;border-top:solid #000000 0.9907650000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">3.05 times </td><td style="border-left:solid #000000 0.9907650000000001pt;border-right:solid #000000 0.9907650000000001pt;border-bottom:solid #000000 0.9907650000000001pt;border-top:solid #000000 0.9907650000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">1.44 times </td><td style="border-left:solid #000000 0.9907650000000001pt;border-right:solid #000000 0.9907650000000001pt;border-bottom:solid #000000 0.9907650000000001pt;border-top:solid #000000 0.9907650000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">0.40 times </td><td style="border-left:solid #000000 0.9907650000000001pt;border-right:solid #000000 0.9907650000000001pt;border-bottom:solid #000000 0.9907650000000001pt;border-top:solid #000000 0.9907650000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">1.36 times </td></tr></tbody></table> According to analysts, the company is a good bet if you were willing to hold on to the stock for the long run — not for its listing premium. So, if you have the shares and are concerned that there’s been a loss on premium, keep the stock if you have the patient. Why are investors wary of Macrotech Developers? One of the reasons for investors to be wary was the company’s high level of debt. Around ₹1,500 crore of funds from the IPO will go towards repaying lenders to ease its balance sheets. But that doesn’t mean that it won’t need more money, which brings us two the second reason investors were vary about putting their money into the offer. Marcotech Developers is operating in a capital intensive sector, the real estate industry, during a pandemic. Any delays due to a lockdown, curfew or the implementation of restrictions like Section 144, could add to its costs — especially since the majority of its projects are in India’s financial capital, Mumbai. The city has been one of the worst hit in all of India during the second wave of the pandemic. “If the company does not have access to funds required on favourable terms, it may be required to delay or abandon some or all planned projects or reduce the scale of operations,” noted Capital Markets in its preview. The brokerage pointed out that the company has earlier difficulties in serving its debt. It was among the companies that availed the moratorium offered by the Reserve Bank of India (RBI) for six months during the pandemic, from March to August 2020. The size of Macrotech Developers has its own loopholes The problem with Macrotech Developers possibly having to reduce its scale of operations due to the uncertainty propagated by the pandemic is that it’s one thing it has playing in its favour. Macrotech Developers is one of the largest players in the Indian real estate market going up against behemoths like Godrej Properties, Sunteck Realty, and Oberoi Realty. And so far, it has consistently outperformed all its peers when it comes to sales, as per Hem Securities. It has a strong distribution network, not just in India, but in foreign markets like the UK, the US, Singapore and the Gulf Cooperation Council (GCC). But even that comes with its own loopholes. “Large construction projects in all parts of the world provide opportunities for corruption, fraud or improper conduct, including bribery, deliberate poor workmanship, theft or embezzlement by employees, contractors or customers or the deliberate supply of low-quality materials, which may delay development of projects,” said Capital Market’s report. Yes, it's one of the biggest players in the residential real estate market, but being so big at a time when the real estate market is witnessing its biggest slump in five years can be dangerous — even with home loans rates on the downtrend. SEE ALSO: <a href="https://www.businessinsider.in/business/startups/news/razorpay-raises-160-million-at-3-billion-valuation-plans-for-more-acquisitions/articleshow/82137901.cms">Razorpay raises $160 million at $3 billion valuation, plans for more acquisitions</a> <a href="https://www.businessinsider.in/stock-market/news/hdfc-bank-macrotech-developers-adani-ports-and-other-stocks-to-watch-out-for-on-april-19/slidelist/82137367.cms">HDFC Bank, Macrotech Developers, Adani Ports and other stocks to watch out for on April 19</a>

Macrotech Developers IPO lists at 10% discount — analysts recommend that shareholders should wait it out

<img class="gwt-Image" src="/photo/49643553.cms" style="width: 800px; height: 600px;" />Close on the heels of <keyword id="6354630" type="PERSON" weightage="100" keywordseo="Mark-Zuckerberg">Mark Zuckerberg</keyword>'s departure from India, technology giant Microsoft's CEO <a href="http://www.businessinsider.in/searchresult.cms?query=satya+nadella">Satya Nadella</a> is now set to visit the country on November 5 for 'Future Unleashed' - a conference by Microsoft in Mumbai for its customers, partners and developers. 
 For Hyderabad-born Nadella, this is his second official visit to the country after his first trip as the Microsoft chief executive in September 2014. The visit, coincidentally, will ensue on a day that marks Microsoft’s 25th anniversary in India. The company will launch a technical preview of Windows 9 at the conclave, and Nadella is likely to largely focus on what he can do for PM’s '<keyword id="1929810" type="UNKNOWN" weightage="100" keywordseo="Digital-India">Digital India</keyword>' initiative, particularly his plans to take technology to 5,00,000 Indian villages. 
 
At the ‘Digital India’ dinner with Modi in September, Nadella had shared what he called a “haunting image” from his childhood in Andhra Pradesh to illustrate how digital India can change lives. He had said Microsoft would announce cloud services from Indian data centers as a key part of both Make in India and Digital India projects. He had also announced Microsoft's plans to take technology to rural India. “We believe low-cost broadband connectivity, coupled with the scale of cloud computing and the intelligence that can be harnessed from data, can help drive creativity, efficiency and productivity across governments and businesses of all sizes,” he had said. 
 
In view of his promises then, he is expected to promote the firm's technology initiatives in his keynote address. He will highlight the benefits of Microsoft's local data centers (three of which went live in India only last month) for its partners and consumers. He may also focus on some local cloud-based innovations that are addressing issues related to health and education in India. Apart from making a couple of product announcements for India like much anticipated Surface Pro 4 (launched in the US last month), Nadella will interact with industry leaders, government stakeholders, customers and partners at the conclave where heads and senior officials from cross session of industries will be present ranging from Mahindra Group, Axis Bank, Tata Group, Starbucks, Robert Bosch, Honeywell, Kotak Bajaj, Fortis, Sony Corporation to HDFC Bank. 
 It's not a surprise that these big tech honchos are eyeing India as a booming market for technology. <keyword id="6354576" type="CITY" weightage="100" keywordseo="Facebook">Facebook</keyword> founder’s visit has done the needful by paving way for technology giants to make inroads and bear fruits from investing in a growing Indian economy. But, much of the credit also goes to our Prime Minister <keyword id="6354477" type="PERSON" weightage="100" keywordseo="Narendra-Modi">Narendra Modi</keyword>. Had it not been for him instilling confidence and advocating for his pet projects 'Digital India' and 'Make in India' during his extensive meetings with CEOs and industry experts including Zuckerberg, Nadella, Sundar Pichai during his US visit, there were far lesser chances for global companies to take sudden interest in tapping into the Indian market. Now that they have, India is highly likely to witness CEOs of top global tech firms outlining their company’s plans for the country in the days to come. It’s a welcome change.

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