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India's corporate credit landscape is showing positive trends that are expected to persist, according to a recent report by <keyword id="19990557" type="General" weightage="20" keywordseo="SP-Global" source="keywords" meta.keywordsubtype="org" meta.entityname="S&amp;P Global" meta.hostid="261" meta.entityid="S&amp;P Global">S&amp;P Global</keyword>. The report highlights strengthening credit quality across various sectors, driven by enhanced <keyword id="20994126" type="General" weightage="20" keywordseo="financial-discipline" source="keywords">financial discipline</keyword>, broad-based <keyword id="19899597" type="General" weightage="20" keywordseo="earnings-growth" source="keywords">earnings growth</keyword>, and robust liquidity profiles. S&amp;P Global's analysis reveals that one in three ratings within India now shows a positive outlook, marking a significant shift after three years of net positive rating actions. The report indicates that corporate India has built greater resilience against downside risks, reflecting a more stable and robust credit environment. However, corporate leverage in India is expected to decline marginally, even as capital expenditure (capex) rises by 30% compared to pre-pandemic levels. This improvement is attributed to more entrenched financial discipline among companies, which have managed to balance rising capex with prudent financial management. The report forecasts a 10% growth in aggregate EBITDA in 2024, driven by strong performance in sectors such as telecommunications, airports, commodities, and chemicals. This broad-based earnings growth underscores the resilience of corporate India and its ability to generate substantial cash flows despite a challenging global environment. Indian companies are benefiting from strong onshore liquidity and the absence of large debt maturities, which support their liquidity profiles. The resilience of these companies to foreign exchange and interest rate volatility further strengthens their liquidity positions. Corporate India's positive credit trends are closely linked to broader economic drivers such as GDP growth. Increased consumer spending is bolstering sectors like airports, automobiles, and telecommunications. Meanwhile, infrastructure investment is significantly boosting the commodities, utilities, and commercial automotive sectors. S&amp;P Global notes that both infrastructure and non-infrastructure sectors are experiencing reductions in leverage, with absolute debt reduction more pronounced in non-infrastructure sectors. However, infrastructure entities are slower in reducing debt due to higher capex, particularly in energy transition initiatives. Operating cash flows across sectors are outpacing capex, supporting further deleveraging. While capex intensity remains higher in infrastructure sectors, the neutral free operating cash flow is seen as a positive trend, indicating that companies are managing their capital expenditures efficiently while maintaining cash flows. The transportation infrastructure sector is benefiting from traffic growth and tariff increases, with rising cargo volumes supporting port revenues and improved operating efficiencies boosting margins. Airports are also experiencing higher traffic levels and tariff increases, contributing to better operating cash flows and overall credit quality. In the utilities sector, rising demand and new capacity are driving earnings growth, though capex remains high, particularly for energy transition projects. The steel sector is expected to see increased operating cash flow due to falling input prices and new capacity additions. Earnings in the oil and gas sector are expected to remain stable, supported by a favorable price outlook and consistent production levels. The telecom sector is also on a path to significant deleveraging, with capex expected to moderate following the 5G auctions in 2023. The auto sector is witnessing sustained operating performance as volumes stabilize after the supply chain disruptions of 2022. S&amp;P Global notes that debt levels in the auto sector are expected to remain low following sharp deleveraging, while normalized growth in auto sales and stable margins support the sector's positive outlook. In the chemicals sector, falling input costs and stabilized product prices are expected to drive earnings recovery following a downturn in 2023. Improved signals show a broader trend of recovery across various industrial sectors in India. S&amp;P Global concludes that with the highest proportion of positive credit outlooks in the region, India's corporate sector is well-positioned for continued <keyword id="22758432" type="General" weightage="20" keywordseo="credit-quality-improvement" source="keywords">credit quality improvement</keyword>. 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India's corporate credit quality is getting stronger: S&P Global

<ul><li>The March quarter saw India’s top listed companies meeting analyst expectations, primarily driven by auto and BFSI sectors. </li><li>These two sectors are expected to power <keyword id="46431" type="General" weightage="20" keywordseo="India-Inc" source="Orion">India Inc</keyword>’s earnings again in FY24. </li><li>Moderating inflation, healthy macroeconomic indicators and robust balance sheets are expected to keep India Inc’s earnings robust. </li></ul>India’s top listed companies’ March-quarter earnings largely met analyst expectations, driven by strong growth in two critical sectors – auto and banking, financial services and insurance (BFSI). Analyst consensus is that these two sectors will continue to power India Inc’s earnings going forward. “Nifty's earnings growth stood at 16% year-on-year as against estimates of 14% YoY. The overall performance was driven by the BFSI and auto sectors that posted 43% and 115% YoY earnings growth,” said brokerage firm Motilal Oswal. India Inc’s performance remained healthy during the March quarter despite a challenging global macroeconomic environment and concerns of an economic slowdown in the developed markets. “Of the 21 sectors under our coverage, six sectors reported profits above our estimates, eight sectors reported in-line profit numbers and seven sectors reported profits below our estimates,” Motilal Oswal added. The Indian banking sector was a standout, <a href="https://www.businessinsider.in/finance/banks/news/icici-bank-vs-hdfc-bank-how-indias-top-two-private-lenders-have-performed-in-q4/articleshow/99733618.cms">delivering</a> a<a href="https://www.businessinsider.in/finance/banks/news/sbi-vs-bank-of-baroda-vs-canara-bank-performance-comparison-based-on-q4-2022-23-earning-reports/articleshow/100357639.cms"> second consecutive quarter</a> of stellar performance. In the <keyword id="46265" type="General" weightage="20" keywordseo="auto-sector" source="Orion">auto sector</keyword>, industry leaders<a href="https://www.businessinsider.in/business/auto/news/maruti-suzuki-q4-net-profit-zooms-43-to-2624-crore-beating-expectations-to-add-capacity-of-1-million-vehicles/articleshow/99790060.cms"> Maruti Suzuki</a> and Tata Motors beat analyst expectations –<a href="https://www.businessinsider.in/business/auto/news/tata-motors-in-top-gear-jlr-to-drive-growth-in-fy24/articleshow/100252339.cms"> Tata Motors bounced back</a> to profitability in FY23, on the back of robust performance of its British subsidiary, Jaguar Land Rover. “In-line revenue growth and strong earnings beat substantiate an earnings up-cycle trend in India. Broad market earnings underperformed, but remained strong,” said global brokerage Morgan Stanley. Auto and BFSI sectors are expected to lead growth once again, with others like telecom and consumption also amongst top favourites. <cmsannotation type="cmsannotation" annotationid="Outlook robust" comment="subhead" text="Outlook robust">Outlook robust</cmsannotation> Morgan Stanley reported a slight beat in terms of earnings and profitability in its coverage universe – while it had estimated revenue and profit growth of 13% and 19% respectively in Q4, the reported revenue and profit grew at 14% and 24%, respectively. Robust growth in revenue and profits has brought cheer back to the Indian markets as well – benchmark indices Nifty50 and the <keyword id="6484188" type="General" weightage="20" keywordseo="Sensex" source="Orion">Sensex</keyword> have entered positive territory after volatility earlier this year. While the Nifty50 is up 2%, the Sensex is up 2.4% so far in 2023. It’s not just India Inc that has delivered healthy growth – the Indian economy<a href="https://www.businessinsider.in/india/news/indias-gdp-forecast-raised-but-el-nino-export-contraction-threats-hover/articleshow/100693955.cms"> handsomely beat economist expectations</a>, expanding by 6.1% in the March quarter as against the expected 5% growth. For FY23, India’s gross domestic product (GDP) growth came in higher at 7.2%, beating the government’s own expectations of 7% growth. Foreign investors have also <a href="https://www.businessinsider.in/stock-market/news/foreign-institutional-investors-pump-27856-crore-in-indian-equities-in-may/articleshow/100693791.cms">flocked back to the Indian markets</a>, with foreign institutional investor (FII) flows surging to a 27-month high in May at ₹27,856 crore. Foreign portfolio investors (FPIs) have pumped ₹43,838 crore into Indian equities, the highest in the last 9 months. “With healthy macros, range bound oil prices, a robust fiscal balance sheet and moderating inflation, the outlook for the market looks optimistic,” Motilal Oswal said. <cmsannotation type="cmsannotation" annotationid="These sectors see downgrades" comment="subhead" text="These sectors see downgrades">These sectors see downgrades</cmsannotation> However, there are some pockets of weakness as well, resulting in downgrades. According to analysts, metals, energy and utilities are the sectors that saw the most downgrades. The IT sector, which has been struggling due to a slowdown in its core markets of the US and Europe, has seen the most downgrades from Morgan Stanley. Analysts at IIFL Securities echoed similar sentiments, stating that they are ‘negative’ on the IT sector. Analysts at Motilal Oswal reiterated their ‘neutral’ stance on the sector. SEE ALSO: <a href="https://www.businessinsider.in/stock-market/news/adani-enterprises-titan-eicher-motors-tata-motors-reliance-and-other-big-companies-performance-in-nifty-50/articleshow/100474408.cms">Big boys drive Nifty50’s revenue and profit growth in FY23</a> <a href="https://www.businessinsider.in/stock-market/news/nifty-sensex-now-at-reasonable-valuations-but-midcaps-small-caps-and-financials-still-have-some-juice-left/articleshow/100611412.cms">Nifty, Sensex now at 'reasonable valuations' but midcaps, small caps and financials still have some juice left</a> <a href="https://www.businessinsider.in/india/news/indias-gdp-forecast-raised-but-el-nino-export-contraction-threats-hover/articleshow/100693955.cms">India’s GDP forecast raised but El Nino, export contraction threats hover</a>

Auto and BFSI seen driving India Inc’s earnings growth this financial year

<ul><li><keyword id="6354504" type="General" weightage="80" keywordseo="reliance-jio" source="Orion">Reliance Jio</keyword>, <keyword id="6354287" type="General" weightage="80" keywordseo="bharti-airtel" source="Orion">Bharti Airtel</keyword> and <keyword id="1553175" type="General" weightage="80" keywordseo="vodafone-idea" source="Orion">Vodafone Idea</keyword> are expected to report another stable quarter with moderate revenue growth.</li><li><keyword id="6383126" type="General" weightage="80" keywordseo="telcos" source="Orion">Telcos</keyword> have been witnessing a slowdown in 4G subscriber additions and rising costs due to the 5G rollout.</li><li>Analysts suggest the much-expected tariff hikes will be the “key trigger” going forward.</li></ul>Slowdown in 4G subscriber additions and lack of tariff hikes in over a year could slow down revenue growth of India’s telecom companies, according to analysts. While the market leader Reliance <keyword id="2003276" type="General" weightage="80" keywordseo="jio" source="Orion">Jio</keyword> is expected to report a net addition in subscribers, its rivals Bharti <keyword id="15491" type="General" weightage="20" keywordseo="airtel" source="Orion">Airtel</keyword> and Vodafone Idea are expected to report a decline, as per an <keyword id="46909" type="General" weightage="80" keywordseo="icici-securities" source="Orion">ICICI Securities</keyword> estimate. And it would have an effect on the revenues of the sector as a whole. “Our Q3FY23 estimates suggest a deceleration in mobile revenue growth across telcos due to SIM consolidation, lower benefit of premiumisation from slowdown in 4G net add, and absence of tariff hikes,” said an ICICI Securities report. Overall, analysts expect the three telcos to report earnings growth in the range of 9.4-19.7% year-on-year. Reliance Jio is expected to report the highest revenue growth at 19.7% YoY while its close rival Airtel is expected to report a 17.5% increase. Vodafone Idea, on the other hand, is expected to report revenue growth on the lower end at 9.4%, according to ICICI Securities. Overall, on a sequential basis, the revenue growth is expected to flat – in the range of 0.1-1.7% — with Vi being on the lower end once again. <cmsannotation type="cmsannotation" annotationid="Tariff hike the ‘key trigger’ going forward" comment="subhead" text="Tariff hike the ‘key trigger’ going forward">Tariff hike the ‘key trigger’ going forward</cmsannotation> Going forward however, telcos are expected to<a href="https://www.businessinsider.in/business/telecom/news/bharti-airtel-and-reliance-jio-could-hike-tariffs-by-as-much-as-10-according-to-analysts/articleshow/96375427.cms"> deliver a 10% tariff hike in Q4 FY23</a>. Tariff hikes, analysts say, are “key triggers” for telecom stocks. “From an industry structure, balance sheet and cash flow viewpoint, telcos remain one of the best positioned and a defensive play to navigate through the market uncertainties, if any. Potential tariff hike is the key trigger,” said a report by Dolat Capital. Telcos have been expected to announce tariff hikes for quite some time now – the last tariff hike in the industry was in December 2021. Analysts had expected telcos to deliver a similar hike in December 2022, which never materialized. While Jefferies sees a tariff hike in Q4 FY23, analysts at IIFL Securities suggest the hike could happen only by mid-2023. “Considering large 5G investments and higher network costs on addition of 5G equipment to towers, we believe the next 4G prepaid tariff hike could probably be in mid-2023. Pushing tariff hikes closer to 2024 elections raises the risk of political backlash,” IIFL Securities noted. Despite rolling out 5G services back in October, both <a href="https://www.businessinsider.in/business/telecom/news/reliance-jio-and-airtel-5g-prices-may-be-affordable-for-now-but-expected-to-increase-after-wider-rollout/articleshow/94636173.cms">Airtel and Jio are offering 5G services at no added cost</a> to their subscribers. Cumulatively, the three telcos spent ₹1.5 lakh crore towards their <a href="https://www.businessinsider.in/business/telecom/news/heres-how-much-mobile-bills-can-increase-from-5g-network-service/articleshow/93312184.cms">spectrum purchases</a>. <cmsannotation type="cmsannotation" annotationid="Increased churn adds to lack of tariff hikes" comment="subhead" text="Increased churn adds to lack of tariff hikes">Increased churn adds to lack of tariff hikes</cmsannotation> As the timelines for possible tariff hikes are yet to emerge, the margins will remain stressed as there is one more pain point that’s added to the sector in the form of increased <a href="https://www.businessinsider.in/business/telecom/news/bharti-airtel-and-reliance-jio-could-hike-tariffs-by-as-much-as-10-according-to-analysts/articleshow/96375427.cms">subscriber churn. Telecom users </a>started shopping for better plans in the last four months. According to the telecom subscriber data for October 2022 released by the Telecom Regulatory Authority of India (TRAI), the number of MNP requests in October surged to 11.81 million – close to September’s 11.97 million, which is the highest in 2022. “The rise in MNP requests over the past five months implies increasing competition for subscribers in the market. This is also evident from the higher churn levels seen during Q2 FY23 across telcos,” said the Jefferies report. Additionally, the rollout of 5G and Jio offering unlimited high-speed data is also likely to change the competitive landscape of the sector. “Subscriber (sub) base for Bharti Airtel and Vodafone Idea is likely to shrink while Reliance Jio’s net sub additions (+5mn) may moderate,” said a report by ICICI Securities. The scrambling for high-end 5G customers in a market that’s already saturated will make the telecom market much tougher, putting margins for the sector under pressure. <div type="javascript" title="Custom" contenttype="Text"><cdata><![CDATA[]]></cdata></div> SEE ALSO: <a href="https://www.businessinsider.in/finance/banks/news/sbi-hdfc-bank-axis-bank-among-other-private-and-public-bank-earnings-could-see-a-further-ramp-up-in-q3-2022/articleshow/96768992.cms">Bank earnings could see a further ramp up in Q3, say analysts</a> <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>

Churn and fewer 4G subscribers to slow down telecom revenue growth in Q3

<ul><li>Shares of the entire IT pack companies have been beaten down significantly in 2023 due to macro headwinds.</li><li>The March quarter results of TCS, Infosys and HCL Technologies so far have also underlined the ongoing slowdown.</li><li>The IT companies in India faced the heat after the banking crisis in the US and Europe erupted.</li><li> Considering the macro economic challenges like high inflation, interest rates and banking crisis in regions, analysts expect the <keyword id="46964" type="General" weightage="20" keywordseo="it-sector" source="Orion">IT sector</keyword> to remain watchful for at least the next few quarters.</li></ul>India’s information technology services companies have been struggling amid heightened fears of recession across developed markets and the repercussions of a banking crisis in the US and Europe. And the situation is unlikely to improve until the end of the year, analysts say. Amid the ongoing weakness in the sector, foreign portfolio investors (FPIs) have also sold their stakes in IT companies. FPIs turned bearish on the IT and oil and gas sector in March – between these two sectors, they <a href="https://www.businessinsider.in/stock-market/news/fpis-offload-it-oil-gas-stocks-worth-13734-crore-in-march/articleshow/99375107.cms">sold equities worth ₹13,734 crore. </a> Analysts expect pain to continue till end of 2023 Considering the macro economic challenges like high inflation, interest rates and banking crisis in the US and European regions, analysts expect it will be a watchful few quarters for the IT sector. "The biggest issue in the IT sector is growth slowdown and possibility of recession. So, as long as the slowdown persists and global growth remains uncertain, the market will expect lesser order flow, slower execution and pricing challenges. All these three factors will lead to IT companies suffering and valuations may also not expand. Investors will have to remain watchful for one to two quarters till there is some clarity on the global growth scenario," Deepak Jasani, head of retail research at HDFC Securities told Business Insider India. The IT majors’ recently-posted fourth-quarter results and FY24 growth predictions tell their own story about the sector’s ongoing struggles. For FY23, IT major Infosys reported a growth of 15.4% in constant currency terms, lower than the guidance of 16-16.5% that it had given <a href="https://www.businessinsider.in/business/corporates/news/infosys-results-q3-fy23-infosys-raises-revenue-guidance-for-fy23-to-16-16-5/articleshow/96941824.cms">at the end of Q3</a>. Besides, it guided for a 4-7% revenue growth in FY24. This is the first time since FY16 that Infosys has guided for single-digit revenue growth in constant currency terms. Bigger rival Tata Consultancy Services (TCS) reported a 11-quarter low constant currency revenue growth at $7.2 billion in Q4. TCS’ outgoing chief executive officer Rajesh Gopinathan said in a post-earnings conference that the company is seeing stress in one of its largest markets, North America. The recovery that the company had expected had not yet materialised. According to Sanjeev Hota, vice president, head of research at Sharekhan BNP Paribas, told Business Insider India, the macro uncertainty faced by the sector is unlikely to get better before 2-3 quarters. “(For) the entire calendar year, things look dicey and the industry may witness some kind of stability by the fag end of this year. US, North America, which are among the biggest markets for the sector, are not expected to improve in the near term." Banking crisis could impact June-quarter earnings The global growth slowdown has worked its way into the stock market performance of these companies with shares of the entire IT pack being beaten down significantly in 2023. The Nifty IT index is down 30% so far this year compared to a 3% fall in the broader Nifty50 index. The IT companies in India faced the heat after the banking crisis in the US and Europe erupted in March, triggered by the collapse of Silicon Valley Bank and Signature Bank in the US and the turmoil at Swiss lender Credit Suisse. IT majors like TCS, Infosys and Wipro have also neared their 52-week low since March considering IT companies’ exposure to US banks amid the banking sector crisis. BFSI clients are among the Indian IT companies’ largest clients. "Most of the price damage in the IT stocks has already been done. However, outperformance of the sector from the current level seems restricted till global macro headwinds stabilises. The sector valuation multiple is driven by earnings growth and if growth tapers off, there are little chances of the (IT) stocks outperforming the broader market indices,” added Hota. He, however, recommends staggered buying in TCS among the large caps and Persistent Systems from the mid-cap stocks, for long-term investors. The lower-than-expected growth in March quarter for sector leaders Tata Consultancy Services (TCS), Infosys and HCL Technologies have underlined the ongoing slowdown. And analysts see this spilling over to the next quarter as well. “The banking crisis in US regional banks and European banks in March 2023 has induced greater caution and could impact the June 2023 quarter. We would not be surprised by a weak US performance across companies that are likely to report in the coming days,” said a report by Kotak Institutional Equities. Analysts at JP Morgan have also highlighted the weakness in banking, financial services and insurance (BFSI) and telecom verticals, which would impact Tech Mahindra and Mphasis as they have high exposure to these verticals. Stock movement of IT companies in 2023 so far <table style="border-width: initial; border-style: none; table-layout: fixed; width: 468pt;"></colgroup><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;">IT companies </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;">Stock performance in 2023 </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;">-19.55% </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;">Mphasis </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;">-10.99% </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;">L&amp;T Technology Services </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;">-9.05% </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;">-6.61% </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;">LTIMindtree </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;">-3.57% </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;">-3.50% </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;">Coforge </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;">-2.56% </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;">Tech Mahindra </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;">-0.92% </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 Technologies </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;">0.87% </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;">Persistent Systems </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;">7.32% </td></tr></tbody></table>Source: NSE SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/insider-reviews/first-day-first-show-business-insider-sent-its-mystery-shopper-to-apples-flagship-store-in-mumbai-and-was-surprised/articleshow/99682868.cms">First day, first show: Business Insider sent its mystery shopper to Apple’s flagship store in Mumbai and was surprised</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/telecom/news/reliance-jio-net-profit-grows-1-7-sequentially-at-4716-crore-in-q4-fy23/articleshow/99674353.cms">Reliance Jio Q4 net profit grows 1.7% sequentially to ₹4,716 crore; ARPU up marginally</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/corporates/news/reliance-industries-q4-net-profit-of-19299-crore-beats-analyst-expectations-driven-by-retail/articleshow/99673940.cms">RIL’s Q4 net profit of ₹19,299 crore beats analyst expectations, driven by retail</a>

India’s IT sector likely to face macro headwinds until end 2023, say analysts

<ul><li>Analysts expect stability in the Indian telecom sector in Q2, with <keyword id="2003276" type="General" weightage="100" keywordseo="jio" source="Orion">Jio</keyword> and <keyword id="15491" type="General" weightage="80" keywordseo="airtel" source="Orion">Airtel</keyword> likely to strengthen their position further.</li><li>4G subscriber additions and lower spectrum usage charges are expected to boost telcos’ operating performance.</li><li>Focus will also be on management commentary regarding 5G capex and monetisation plans, and tariff hikes.</li></ul>4G subscriber additions and a minor boost from lower spectrum usage charges (SUC) are expected to benefit India’s leading telecom players <keyword id="6354504" type="General" weightage="50" keywordseo="reliance-jio" source="Orion">Reliance Jio</keyword> and <keyword id="6354287" type="General" weightage="50" keywordseo="bharti-airtel" source="Orion">Bharti Airtel</keyword>, while Vodafone Idea’s position could worsen despite a moderate increase in average revenue per user (ARPU), according to analysts. The overall telecom industry is expected to report a stable quarter with a revenue growth of 19% year-on-year, according to BNP Paribas. On a sequential basis, however, the consensus forecast amongst brokerages is a 1-4% growth. “However, quarter-on-quarter growth (2.4%) is likely to be weaker compared with the previous two quarters as tariff hike benefits are largely behind and subscriber additions are likely to be muted,” said a report by BNP Paribas. The 5G spectrum acquired by the three telcos will not attract any SUC, which will bring down the overall amount of these statutory charges. However, since the airwaves were allocated halfway through August, brokerages say the full benefits will start reflecting only from Q3 of this fiscal year. <cmsannotation type="cmsannotation" annotationid="ARPU growth to remain moderate – another tariff hike possible" comment="subhead" text="ARPU growth to remain moderate – another tariff hike possible">ARPU growth to remain moderate – another tariff hike possible</cmsannotation> ARPU, which is the amount of money that telcos generate from each subscriber on an average, is expected to see a moderate 1-3% increase, primarily on account of higher number of days in the quarter. The brokerages suggest that most of the benefits of the <a href="https://www.businessinsider.in/business/telecom/news/mukesh-ambani-led-reliance-jio-hikes-prices-of-its-plans-by-21/articleshow/87965329.cms">tariff hikes from last year</a> have already been reaped by the telcos. Analysts at BNP Paribas and Edelweiss Research expect another tariff hike in FY23, and Vi could take the lead in this regard. “Tariff hike environment is right and we won’t hesitate to take leadership in hiking prices,” Vi’s then CEO and now chairman Ravinder Takkar had<a href="https://www.businessinsider.in/business/telecom/news/vi-betting-on-tariff-hike-as-it-lost-over-10-million-every-day-in-q1-fy23/articleshow/93348828.cms"> said during an analyst concall</a> earlier in August. Vi bled $10 million a day in the first quarter in FY23 and lost 15 million subscribers in the period. The telco reported a loss of ₹7,293 crore in Q1, and a BofA Securities report expects it to worsen to ₹7,340 crore in Q2. <cmsannotation type="cmsannotation" annotationid="What to look out for in management commentary – 5G capex, tariff hikes" comment="subhead" text="What to look out for in management commentary – 5G capex, tariff hikes">What to look out for in management commentary – 5G capex, tariff hikes</cmsannotation> Amongst key aspects in the management commentary would be the telcos’ 5G capex and monetisation plans, clarity on the boost to margins due to lower SUC overall, and details of the next set of tariff hikes. Brokerages also expect Jio and Airtel to report subscriber additions, while Vi is expected to lose 2-4 million subscribers in the quarter. Earlier, a Nomura report<a href="https://www.businessinsider.in/business/telecom/news/heres-how-much-mobile-bills-can-increase-from-5g-network-service/articleshow/93312184.cms"> suggested</a> that telcos have two options to offset the extensive 5G spectrum purchases – increase prices for their existing subscribers by 4%, or launch 5G services at a premium of 30%. For now, both<a href="https://www.businessinsider.in/business/telecom/news/reliance-jio-and-airtel-5g-prices-may-be-affordable-for-now-but-expected-to-increase-after-wider-rollout/articleshow/94636173.cms"> Airtel and Jio are offering 5G services at no added cost</a> to their subscribers, but it remains to be seen which approach they adopt when their 5G services are launched commercially. <div type="javascript" title="Custom" contenttype="Text"><cdata><![CDATA[]]></cdata></div> SEE ALSO: <a href="https://www.businessinsider.in/stock-market/news/nifty50-valuations-remain-expensive-but-experts-are-divided-on-indias-growth-prospects/articleshow/94704195.cms">Nifty50 valuations remain expensive, but experts are divided on India's growth prospects</a> <a href="https://www.businessinsider.in/finance/banks/news/banks-to-reap-rewards-of-interest-rate-hikes-in-q2-earnings/articleshow/94706875.cms">Banks to reap rewards of interest rate hikes in Q2 earnings</a> <a href="https://www.businessinsider.in/business/telecom/news/5g-could-be-indias-next-growth-engine-and-a-successful-rollout-hinges-on-telcos-govt-policies/articleshow/94685725.cms">5G could be India’s next growth engine, and a successful rollout hinges on telcos, govt policies</a>

Telecom sector to ring in stability in Q2 – Jio and Airtel expected to grow stronger, Vi weaker

<ul class="summary-list"><li>Interest rate cuts and continued earnings growth will power the Dow Jones to above 100,000 within the next decade.</li><li>"Stock prices love strong earnings and lower interest rates," Main Street Research CIO James Demmert said.</li></ul>A powerful cocktail of earnings growth and interest rate cuts will serve as a "turbo booster" for stock prices and power the <a target="_blank" href="https://markets.businessinsider.com/index/dow_jones">Dow Jones Industrial Average</a> to over 100,000.That's according to Main Street Research chief investment officer James Demmert, who outlined a seven- to nine-year timeline for his uber-bullish stock market call."Our main message to investors is to stay focused on the fact that earnings and Fed policy drive stocks and both are extremely favorable as stock valuations are cheap relative to forward earnings. Investors should be fully invested up to their highest need for stock allocation so that they can leverage the early phase of this new and powerful bull market," Demmert said in an e-mail to Business Insider on Monday.Demmert's long-term stock market forecast represents potential upside of 160% from the index's current levels.In the shorter-term, Demmert sees the <a target="_blank" href="https://markets.businessinsider.com/index/s&amp;p_500">S&amp;P 500</a> rising to 6,000 by the end of the year, representing potential upside of about 10% from current levels."The recent pace of weaker inflation data suggests lower rates and bond yields in the second half of the year, and that makes stocks more attractive," Demmert said.The Federal Reserve is expected to cut interest rates one to two times this year, with the market currently expecting the first rate cut to occur in September.And if the Fed doesn't cut interest rates this year, that won't derail Demmert's bullish forecast because earnings growth remains strong and resilient."Earnings alone can propel stocks higher, however recent inflation data and Fed commentary suggests that at least one rate cut is likely before year-end, and that would be a powerful tailwind to an already strong corporate earnings situation. Stock prices love strong earnings and lower interest rates," Demmert said.Additionally, Demmert highlighted that <a target="_blank" href="https://markets.businessinsider.com/news/stocks/stock-market-outlook-2024-6-trillion-cash-buy-the-dip-2023-12">trillions of dollars of cash on the sidelines</a> should make its way into the stock market over the next six months as interest rates drop and some investors start to feel "FOMO" after missing out on the stock market's <a target="_blank" href="https://www.businessinsider.com/stock-market-outlook-money-wall-drive-stocks-july-record-highs-2024-6">ongoing march to record highs.</a>And it's not a bad time to buy stocks now, even at record highs, as the median stock valuation is trading at about 16-times forward earnings."Yes, the AI tech stocks trade at much higher multiples than most stocks - but deservedly so given their premium growth rates," Demmert said.As to how investors should position their portfolios to benefit from a potential multi-year bull market, Demmert highlighted stocks found in the technology, telecom, healthcare, financials, industrials, energy, and materials sectors as favorable corners of the market."We believe we have entered a new AI and tech-led business cycle and bull market so it's essential that investors position themselves to be overweight in technology and telecom stocks," Demmert said.While Demmert's prediction for the Dow Jones to trade at 100,000 within the next seven to nine years might sound "pie-in-the-sky," it wouldn't be out of historical norms if it did occur.The stock market has historically grown at an average annual rate of 10%. For the Dow Jones to hit 100,000, it would need to grow at a compounded annual growth rate of 11.2% over the next nine years.

The Dow Jones will eclipse 100,000 on a 'turbo booster' combo of earnings growth and Fed rate cuts, Wall Street CIO says

<ul class="summary-list"><li>Hedge funds that reveled in tech stocks before Nvidia's last week earnings are cashing out. </li><li>The retreat has triggered net selling of stocks in the tech sector in the last four trading sessions. </li></ul>Nvidia's blockbuster earnings report last week has been followed by big outflows from the tech sector among hedge funds as they look to take some chips off the table after piling in ahead of the chip maker's results. A note to clients from Goldman Sachs' prime brokerage unit said hedge funds have been selling tech at the fastest pace in seven months after a six-week period of buying before Nvidia reported results last Wednesday. "After a 6-week buying streak, HFs unloaded Tech stocks at the fastest pace in 7+ months, as the sector was net sold for 4 straight sessions incl. Thurs post NVDA results," the analysts wrote. Nvidia sent investors into a frenzy with its earnings last Thursday, adding <a href="https://markets.businessinsider.com/news/stocks/tech-stocks-ai-bubble-dot-com-lost-decade-rba-nvda-2024-2?mrfhud=true">$267 billion in market cap</a>, good for the biggest-ever addition to market value in a single trading session. "Despite the 'good vibes' last week and strong NVDA earnings on Wed, the NDX has traded lower 4 of the last 5 sessions, as price action and activity levels have started to show some more 2-way action to it, raising some tension about the sustainability of momentum from here," Peter Callahan, tech, media, and telecom sector specialist, wrote in the note. Hedge fund investors have shifted their focus to other high-quality stocks, with cash redirected from the tech trade to real estate, consumer staples, and materials, the note said. The analysts said that as the Magnificent Seven wrapped up their earnings season, their performance should begin to yield to broader economic indicators such as inflation data, as well as shifts in the Fed's rate-cutting timelines.That said, market confidence in tech stocks remains robust, with Nvidia alone driving 22% of the S&amp;P 500's weekly gain last week. The put-call skew, a key measure of investor fear, was down, while retail trading in Nvidia also surged to the 99.96th percentile in the one-week average notional amount traded over the last five years.

Hedge funds are dumping tech stocks at the quickest pace in 7 months after piling in ahead of Nvidia's wild earnings report

<ul><li>Analysts believe that <keyword id="3820" type="General" weightage="20" keywordseo="mukesh-ambani" source="Orion">Mukesh Ambani</keyword>’s <keyword id="6355199" type="General" weightage="20" keywordseo="reliance-industries" source="Orion">Reliance Industries</keyword> could end the financial year 2021-22 on a high.</li><li>A continuation in the earnings upcycle is expected as chemical prices are rising, broadband subscribers are picking up, online retail gains traction and new energy investment picks up steam.</li><li>Shares of RIL have gained nearly 10%, outperforming benchmark index Sensex that tumbled nearly 6% so far in 2022.</li><li>The stock will remain in focus as investors await the firm’s March quarter earnings that is scheduled on May 6, Friday.</li></ul>Reliance Industries could bring cheer to its investors with the March earnings scheduled to be announced later today (May 6) as analysts believe the Mukesh Ambani-led company is looking at growth in three of its key businesses — refining, retail and telecom. Reliance Industries’ shares will be in focus as investors await the firm’s March quarter earnings that is scheduled on May 6, Friday. <div type="image" title="RIL chart 5" height="900" width="1200" msid="91356059" hostid="261"></div>Reliance Industries could see earnings upcycle as chemical prices are rising, broadband subscribers are picking up, online retail gains traction and new energy investment picks up, according to a report by Morgan Stanley as it states “an earnings upgrade cycle is taking hold and is key to reversing RIL's past year of underperformance.” Analysts at Yes Securities second the views as they say Reliance Industries is expected to report improvement in its earnings — on both quarterly and annual basis — on account of stronger refining margins. The revenue, however, would face a partial offset due to weaker margins in petrochemicals. Also read: <a href="https://www.businessinsider.in/business/telecom/news/reliance-jio-could-post-a-blockbuster-5000-crore-profit-in-the-march-quarter-say-analysts/articleshow/91316654.cms">https://www.businessinsider.in/business/telecom/news/reliance-jio-could-post-a-blockbuster-5000-crore-profit-in-the-march-quarter-say-analysts/articleshow/91316654.cms</a> Retail and telecom to drive Reliance’ growth, with refining gains offset by rising crude oil prices This would be the seventh quarter of sequential improvement in Reliance’ earnings. In the March quarter, refining and telecom are expected to drive growth with some offsets from the petrochem side, say analysts. In fact, <keyword id="6354504" type="General" weightage="20" keywordseo="reliance-jio" source="Orion">Reliance Jio</keyword> could post a <a href="https://www.businessinsider.in/business/telecom/news/reliance-jio-could-post-a-blockbuster-5000-crore-profit-in-the-march-quarter-say-analysts/articleshow/91316654.cms">blockbuster ₹5,000 crore profit</a> in the March 2022 quarter. Analysts are gung-ho about the telecom sector’s performance in the March 2022 quarter. Analysts say that the telecom segment is expected to benefit from higher average revenue per user (ARPU) realisation whereas the retail segment would reap the benefits of sales traction driven by growth in network. Notably, RIL has invested more than <a href="https://www.businessinsider.in/retail/news/asias-richest-man-mukesh-ambani-is-on-a-shopping-spree-for-private-fashion-labels/articleshow/90439055.cms">$1 billion in acquiring assets and building capabilities</a> of <keyword id="58448" type="General" weightage="20" keywordseo="reliance-retail" source="Orion">Reliance Retail</keyword>. Also read: <a href="https://www.businessinsider.in/retail/news/reliance-industries-retail-business-could-reach-new-heights-all-thanks-to-increased-investments-and-muted-covid-wave/articleshow/91312838.cms">https://www.businessinsider.in/retail/news/reliance-industries-retail-business-could-reach-new-heights-all-thanks-to-increased-investments-and-muted-covid-wave/articleshow/91312838.cms</a> “With rising penetration and market share wins ahead in consumer businesses (telecom tech and retail), we see the medium term growth story remaining intact as well,” said Goldman Sachs. Besides, recently the stock has been rising on hopes of its new hydrogen energy segment. Reliance best positioned to capitalise on hydrogen (new energy) segment Global investment banking firm Morgan Stanley expects the hydrogen segment of RIL to contribute 10% to its earnings with a net asset value of $10 billion by the end of this decade (by 2030). Analysts at Morgan Stanley believe <a href="https://www.businessinsider.in/business/corporates/news/analysts-up-mukesh-ambanis-ril-target-price-by-over-20/articleshow/90981139.cms">hydrogen adoption plans </a>are quickly progressing in India in line with global peers, which makes RIL best positioned to capitalise on this segment. “For RIL, strong cash flow generation in the best in class old energy business (low cost structure and highest complexity) can fund the capex of the New Energy business and in turn drive one of the fastest and most profitable net zero transitions by 2035 amongst large energy companies, on our analysis,” said analysts at Goldman Sachs. <div type="javascript" title="Custom" contenttype="Image"><cdata><![CDATA[]]></cdata></div> SEE ALSO: <a href="https://www.businessinsider.in/business/telecom/news/reliance-jio-could-post-a-blockbuster-5000-crore-profit-in-the-march-quarter-say-analysts/articleshow/91316654.cms">Reliance Jio could post a blockbuster ₹5,000 crore profit in the March quarter, say analysts</a> <a href="https://www.businessinsider.in/retail/news/reliance-industries-retail-business-could-reach-new-heights-all-thanks-to-increased-investments-and-muted-covid-wave/articleshow/91312838.cms">Reliance Retail could touch new heights thanks to a muted third wave of COVID-19 and increased investments</a>

You Searched For "telecom sector earnings" and got 8 results

India's corporate credit quality is getting stronger: S&P Global

ANI

Auto and BFSI seen driving India Inc’s earnings growth this financial year

Rounak Jain

Churn and fewer 4G subscribers to slow down telecom revenue growth in Q3

Rounak Jain

India’s IT sector likely to face macro headwinds until end 2023, say analysts

Bhakti Makwana

Telecom sector to ring in stability in Q2 – Jio and Airtel expected to grow stronger, Vi weaker

Rounak Jain

The Dow Jones will eclipse 100,000 on a 'turbo booster' combo of earnings growth and Fed rate cuts, Wall Street CIO says

Matthew Fox

Hedge funds are dumping tech stocks at the quickest pace in 7 months after piling in ahead of Nvidia's wild earnings report

Yuheng Zhan

Reliance Industries could see an earnings boost driven by its three pillars — refining, retail and telecom

Bhakti Makwana

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