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SBI reported a soft quarter as core PPoP missed PLe by 8.2% due to miss on NIM/fees/opex although loan growth was superior. Asset quality was better and core PAT beat PLe by 9.2% as provisions were materially lesser since (1) lower net slippages led to controlled credit costs and (2) there was a provision write-back as a corporate account was upgraded from restructured. NIM was lower led by QoQ fall in CASA, rise in borrowings and sharp drop in international yields. As MCLR resets higher on a portion of loans in Q4FY25, domestic loan yields could improve, supporting NIM. Credit growth guidance is maintained at 14% for FY25; deposit growth was guided at 10% due to LDR cushion. We lower NIM for FY25/26/27 which would be offset by slight reduction in provisions.

Outlook

The stock is currently trading at 0.9x on Sep’26 core ABV; we lower multiple to 1.3x from 1.5x and trim SOTP-based TP to Rs900 from Rs1025. Retain ‘BUY’.

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Software major Infosys is in the process of laying off 400 trainees at its Mysuru campus after they failed evaluation tests in three consecutive attempts, according to sources familiar with the matter.

This is approximately half of the trainees onboarded in October 2024.

As it happens, the trainees were onboarded after a two-and-a-half-year-long wait, necessitated by a macroeconomic slowdown triggering clients of IT companies to halt spending on projects.

“At Infosys, we have a rigorous hiring process where all freshers, after undergoing extensive foundational training at our Mysuru campus, are expected to clear internal assessments. All freshers get three attempts to clear the assessment, failing which they will not be able to continue with the organisation, as is also mentioned in their contract. This process has been in existence for over two decades and ensures a high quality of talent availability for our clients,” Infosys said in a statement.

Trainees are being called in batches of around 50 and are being made to sign “mutual separation” letters, sources familiar with the matter told Moneycontrol.

“This is unjustified because the tests were very tough and made to fail us, many trainees have fainted as the future looks bleak now,” a trainee told Moneycontrol who was terminated.

Sources say the company has deployed bouncers and security personnel to ensure that the trainees do not carry mobile phones. However, Infosys clarified that bouncers were not deployed.

Trainees have been asked to vacate the premises by 6 PM, the sources said.

Nascent Information Technology Employees Senate (NITES) said it is filing an official complaint with the Ministry of Labour & Employment, demanding immediate intervention and strict action against Infosys.

“This blatant corporate exploitation cannot be allowed to continue, and we urge the government to take swift action to uphold the rights and dignity of Indian IT workers,” Harpreet Singh Saluja of NITES said in a statement.

The said trainees were recruited in the role of System Engineers (SE) and Digital Specialist Engineers (DSE).

India’s second-largest software exporter sent offer letters back in 2022 but did not on-board the candidates after the IT industry faced a slump. This phenomenon, however, is an industry-wide issue. Fears of a looming recession in IT companies’ major markets and the absence of discretionary spending led companies to pause hiring, leading to a multi-decadal decline in headcount.

On September 3, Infosys sent letters with joining dates to approximately 1,000 freshers from 2022 campus hires, just a day after it issued similar number of letters.

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Mumbai’s homebuyers are set to benefit from the Reserve Bank of India’s (RBI’s) decision to cut the repo rate by 25 basis points to 6.25 per cent. Announced shortly after the Union Budget 2025, this move is expected to make home loans more affordable, encouraging greater investment in the mid and premium housing segments in the city.

Many believe that the rate cut decision after the tax savings announcements by Finance Minister Nirmala Sitharaman in the Union Budget will lead to a higher demand in the affordable and the middle income segment housing.

With lower interest rates, banks are likely to reduce home loan EMIs, providing relief to first-time buyers in Mumbai, where high real estate prices often make purchasing a home challenging. Industry experts believe this reduction in borrowing costs will help boost housing demand in the city.

A rough calculation shows that a new home buyer taking a home loan of Rs 50 lakh will see his EMI outgo come down by Rs 846 a month if the rate goes down from 8.75 per cent to 8.5 per cent on a 25-year loan. The annual savings would amount to over Rs 10,000 in EMI outgo.

Kaushal Agarwal, Co-Founder and Director at The Guardians Real Estate Advisory, said, “The RBI’s decision to cut the repo rate by 25 bps to 6.25 per cent marks the first rate reduction in nearly five years. This move is expected to lower borrowing costs potentially making home loans more affordable and improving buyer sentiment. For developers, it could ease financial pressures and encourage new project launches.”

The rate cut is also expected to help developers as it would lower the cost of project financing, potentially leading to more competitive pricing in the real estate market. This thereby could make housing slightly more accessible for buyers in Mumbai.

“Lower borrowing costs will help developers manage project financing better and may encourage competitive pricing. This move, combined with recent tax benefits, is expected to drive market momentum and improve the affordability of homeownership, especially in the mid & premium segments,” said Ashwin N Sheth, CMD at Ashwin Sheth Group, a Mumbai-based real estate development company.

Beyond lower borrowing costs, the RBI has also introduced measures to tackle digital fraud in real estate. In recent years, homebuyers have faced risks from fake property listings and scams. The central bank’s emphasis on improving security in digital transactions is expected to enhance trust in the market.

Additionally, the RBI has projected inflation at 4.8 per cent for FY 2025 and 4.2 per cent for FY 2026, with an estimated GDP growth rate of 6.7 per cent. With this, a stable economic outlook is expected to further support the homebuyers.

With reduced home loan rates, increased liquidity, and stronger consumer confidence, Mumbai’s real estate market is poised for increased activity. Experts anticipate more buyers entering the market in the coming months, driving sales and boosting property investments across the city.

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Nasdaq-listed IT services major Cognizant met its revenue guidance for the fourth quarter of calendar year 2024. The company guided for revenue growth for 2025 in the range of 3.5 per cent to 6 per cent in constant currency. The guidance is stronger than 2024, reflecting improving market conditions. 

Cognizant’s revenue guidance for 2025 is higher than the growth it reported in 2024. Revenue for the full year 2024 grew 1.9 per cent in constant currency. The company’s fourth quarter revenue came in at $5.1 billion up 6.7 per cent year-on-year. The company managed to meet the higher end its guidance for growth.

Cognizant follows January-December financial calendar. 

The company’s net income grew 2.1 per cent to $558 million, compared to $546 million in same quarter 2023. Net income was down 4.1 per cent sequentially. 

“I am deeply grateful to our employees for their commitment to our strategic priorities and rigorous execution, which drove fourth quarter revenue growth to the high end of our guidance range. We exited the year with momentum — closing a record 29 large deals during the year — highlighting the effectiveness of our strategy,” said Ravi Kumar S, Chief Executive Officer.

Bookings in the fourth quarter increased 11 per cent year-over-year. On a trailing-twelve-month basis, bookings increased 3% year-over-year to $27.1 billion, which represented a book-to-bill of approximately 1.4x. During the quarter, Cognizant signed ten large deals, which are deals with total contract value of $100 million or greater.

In terms of growth drivers, North America grew 8.4 per cent YoY for the Q4 CY24. Europe was up 1.3 per cent and rest of world grew 3.9 per cent. 

In terms of verticals, health sciences grew 10.4 per cent, financial services was up 2.8 per cent and communications, media and technology was up 0.4 per cent. The firm’s products and resources segment grew 11.3 per cent. 

Jatin Dalal, Chief Financial Officer, said “We expect that our improved cost structure, achieved through the successful completion of our NextGen program, will help us sustain our pace of strategic investments in support of profitable growth. Our initial 2025 guidance calls for 3.5% to 6.0% constant currency revenue growth and 20 to 40 basis points of full-year Adjusted Operating Margin expansion.”

Cognizant’s Q4 headcount was down by 3,300 compared to Q3 FY24. The total headcount for the year was at 336,800. In Q3 too the company had reported a decrease of 6,500. 

“In 2024, we accelerated investments in our AI-led platforms and added new capabilities with the acquisitions of Thirdera and Belcan, further strengthening and diversifying our portfolio. Our focus on client centricity, agility, and innovation is helping clients unlock the next wave of hyper productivity and enterprise-grade generative AI adoption.”

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Automobile giant Mahindra & Mahindra (M&M) will announce its December quarter of financial year 2025 (Q3FY25) results on Friday, February 7, 2025.  

M&M is expected to report strong performance for Q3FY25, driven by solid growth across its automotive and tractor segments.  

Analysts predict a revenue increase of approximately 21 per cent Y-o-Y, with a healthy rise in tractor revenues (up 26 per cent Y-o-Y) and automotive sales (up 19 per cent Y-o-Y).  

Earnings before interest, tax, depreciation and amortisation (Ebitda) is expected to grow around 39 per cent, benefiting from a better product mix and improved operating efficiencies. Positive responses to new model launches and higher tractor volumes are likely to contribute to margin expansion. 

Overall, M&M is on track to deliver a strong quarter with improved profitability across its business segments.

On the bourses, at 1:50 PM, M&M share price was trading 1.27 per cent higher at Rs 3,137.20 per share. In comparison, BSE Sensex was trading 0.49 per cent lower at 77,889.05. 

Given this, here’s what top brokerage expect from M&M in Q3 results: 

Nomura 

Analysts at Nomura forecast a 21 per cent Y-o-Y increase in M&M’s revenue for Q3FY25, driven by a 17 per cent Y-o-Y growth in automotive volumes and a 20 per cent Y-o-Y rise in tractor volumes. 

Ebitda is expected to rise 38 per cent Y-o-Y to Rs 4,478.7 crore, while PAT is predicted at Rs 2,879 crore, up 17 per cent Y-o-Y.  

Ebitda margin is expected to increase by 26bps Q-o-Q to 14.6 per cent. The overall revenue projection is Rs 30,689.3 crore. 

Elara Capital 

Elara Capital analysts expect Mahindra & Mahindra (M&M) to report a revenue of Rs 30,801.4 crore for Q3FY25, reflecting a 21.8 per cent Y-o-Y growth. The growth is likely driven by strong responses to new model launches and an improved product mix, with tractor sales making up 36 per cent of total volume. 

Ebitda is forecasted at Rs 4,497 crore, up 39 per cent Y-o-Y, while recurring PAT is estimated at Rs 3,129.4 crore, up 27.5 per cent Y-o-Y.  

Kotak Institutional Equities 

Kotak Institutional Equities estimates M&M’s revenues to rise 21 per cent Y-o-Y in Q3FY25, driven by a 26 per cent Y-o-Y growth in the tractor segment (with a 20 per cent increase in volumes) and a 19 per cent Y-o-Y growth in the automotive segment, fuelled by a 17 per cent increase in volumes.  

Ebitda margin is expected to improve 200bps Y-o-Y due to a richer segment mix and operating leverage benefits. Automotive Ebit margin is estimated at 9 per cent, while the tractor segment Ebit margin is predicted to improve by 310bps Y-o-Y to 18.6 per cent. 

The expected revenue is Rs 30,519.7 crore, Ebitda is Rs 4,511.4 crore (up 39.4 per cent Y-o-Y), and adjusted PAT is Rs 3,248.5 crore, up 32.4 per cent Y-o-Y.

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