 "Sensex loses over 100 points; HDFC down 3%")
The markets have been struggling in mid-morning trades after retreating from early intra-day highs due to weakness in the financial space. The markets had started the day on an optimistic note, with Infosys springing a pleasant surprise for the fourth quarter. However, the gains were soon reversed by nervousness on the financial counters. The Sensex has shaved off 134 points at 22,468 and the 50-unit CNX Nifty has lost 41 points at 6,734. The broader market space is also in a spot of bother, with the BSE mid-cap index shedding 16 points at 7321 and the small-cap index losing six points at 7516. Index bellweather, Infosys is however buzzing in morning trades, up 3.5% at Rs 3348.
Infosys, India's second largest software services exporter, beat the street by reporting fourth quarter (January-March) net profit at Rs 2,992 crore, up 4% compared to previous quarter in FY14. The consolidated revenue came in at Rs 12,875 crore. EBIT came in at Rs 3281 crore, and in terms of margin it was 25.48%. Revenue in dollar terms came in at $2,092 million. Infosys gave the dollar revenue guidance for FY15 in the range of 7-9%.
Analysts, on an average, had expected profit of Rs 2,789 crore for the quarter. The company had reported a profit of Rs 2,875 crore in the December 2013 quarter.
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Total consolidated revenues, however, declined by 1.2% at Rs 12,875 crore in March quarter against Rs 13,026 crore in December quarter, Infosys said in a statement. The Q4 operating margins expanded 50bps sequentially to 25.5%, it added.
Meanwhile, the company has guided for a revenue growth of 7%-9% for the financial year 2014-15 (FY15). The board has recommended a final dividend of Rs 43 per equity share for the financial ended March 31, 2014.
Infosys has hit a high of Rs 3,371 and a low of Rs 3,325 thus far. The stock had hit a record high of Rs 3,847 on 3 March 2014 and a 52-week low of Rs 2,190 on 29 April 2013. The stock had underperformed the market over the past one month till 11 April 2014, sliding 11.90% compared with the Sensex's 3.68% rise. The scrip had also underperformed the market in past one quarter, sliding 8.82% as against Sensex's 9.01% rise.
On the economic front, one would need to keep a watch on the month-on-month Consumer price index (CPI) and the wholesale price index (WPI) numbers, which are due to be announced during the course of the day.
The financials are having a rough ride; HDFC has slid by 2.9% at Rs 890, HDFC Bank has lost 2.1% at Rs 722, Axis Bank has lost 1% at Rs 1479 and SBI has lost 0.8% at Rs 1976. The midcap banking names are also taking it on the chin, with Yes Bank losing a whopping 3.5% at Rs 427, Kotak Mahindra Bank sliding by 2% at Rs 790 and Bank of India shedding 1.9% at Rs Rs 229.
On the other hand, the positive sentiment surrounding Infosys has rubbed onto the other IT counters; Wipro has added 1.6% at Rs 577 and TCS has gained 1.6% at Rs 2198.
In the broader market space, United Spirits and United Breweries Holdings have surged after Diageo Plc has made an offer to acquire an additional stake in United Spirits at price of Rs 3,030. United Spirits has rallied 15% to Rs 2,941, while UB Holdings has surged nearly 20% to Rs 33.35 on the Bombay Stock Exchange.
Gruh Finance has rallied 7% to Rs 334 after the board of housing finance company recommended the issue of bonus shares in the ratio of 1 equity share for every 1 equity share held.
The market breadth is marginally negative. Out of 1851 stocks traded on the BSE, there are 838 advancing stocks as against 915 declines.