Tag: Stock Tips

TCS share price hit a fresh 52-week high of Rs 2,544.45 apiece, up 3.63 per cent in an otherwise weak market on Tuesday. The IT giant, in a press release, announced that it has expanded its partnership with a leading supermarket chain in the UK, Morrisons, through a five-year contract for application management services, data services and cybersecurity services. Tata Consultancy Services stock surpassed its previous high of Rs 2,538 apiece on September 15, 2020. Analysts say that TCS enjoys a leadership position in the IT services industry driven by strong new-age offerings and best in class methods and practices. “In the last few quarters, TCS has secured strong order intake which provides near term growth visibility. We expect TCS will remain a key beneficiary of buoyant tech demand given its global scale, diversified clientele and strong cash-rich balance sheet,” Suyog Kulkarni, Senior Analyst- IT services, Media and Internet at Reliance Securities, told Financial Express Online.

TCS shares have rallied 41 per cent from March low of Rs 1,504.40 apiece. In the afternoon deals, TCS stocks were trading 3.05 per cent higher at Rs 2,539.85 apiece as compared to a 0.55 per cent fall in the S&P BSE Sensex. The partnership between TCS and Morrisons will help accelerate the latter’s plan to simplify and modernise its technology to improve the shopping trip, eliminate wasted effort and become more popular and accessible to its customers. Morrisons selected TCS as its Application – Managed Services partner in 2016, to improve the customer and employee experience. Since then, TCS has worked closely with the retailer to help drive its growth and modernisation agenda across various lines of business, leveraging its comprehensive portfolio of business and technology services and solutions.

Research and brokerage firm Elara Capital has maintained an ‘accumulate’ rating to TCS. “Large deals delayed in April and May have come back in the pipeline toward the end of June, with TCS appearing confident of signing incremental transformational deals,” it said. While Motilal Oswal Financial Services expects a series of earnings upgrades this quarter (Q2) ranging between 5-10% for large-cap IT names. “Over the medium term, we expect TCS to be a key beneficiary of the COVID-19-driven increase in technology intensity across verticals,” it said. The brokerage firm also added that the continued traction in large deals, a healthy pipeline, and better resilience in BFSI are encouraging factors for TCS.

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India saved over Rs 5,000 crore when the country in April-May used two-decade low international oil prices to fill up its three strategic underground crude oil storages, Petroleum Minister Dharmendra Pradhan said on Monday. India, the world’s third-biggest oil importer, has built strategic storages in underground rock caverns at three places to meet any contingency. “Taking advantage of the low crude oil prices in the international market, India purchased 16.71 million barrels (mbbl) of crude in April-May, 2020 and filled all the three Strategic Petroleum Reserves created at Visakhapatnam, Mangalore, and Padur,” Pradhan said in a written reply to a question in Rajya Sabha.

The average cost of procurement of crude oil was USD 19 per barrel, as compared to USD 60 a barrel prevailing during January 2020. This helped save USD 685.11 million or Rs 5,069 crore, he said. While the 5.33 million tonnes of emergency storage — enough to meet India’s oil needs for 9.5 days — was built in underground rock caverns in Mangalore and Padur in Karnataka and Visakhapatnam in Andhra Pradesh by the government, state-owned oil firms were in April asked to buy crude oil when global rates fell to a two-decade low.

Oil prices globally had slumped after the coronavirus pandemic pummeled demand. The storages at Mangalore and Padur were half-empty and there was some space available in Vizag storage as well. These were filled by buying oil from Saudi Arabia, the UAE and Iraq. The Strategic Petroleum Reserve entity of India (ISPRL) built the underground storages at Mangalore and Padur in Andhra Pradesh and Visakhapatnam in Andhra Pradesh as insurance against supply and price disruptions.

Mangalore storage has a total capacity of 1.5 million tonnes. Of this, half had previously been hired by Abu Dhabi National Oil Co (ADNOC) to store its crude oil. The remaining half was in April/May filled by oil brought by state-owned oil firms. Padur, the biggest of the three storages, has a total capacity of 2.5 million tonnes (about 17 million barrels). ADNOC had in November 2018 signed up to hire half of this capacity but never actually stored oil in it. At present, government-sourced crude fills up half of the Padur capacity, and the remaining 1.25 million tonnes of crude oil was sourced from Saudi Arabia.

The 1.33 million tonne Visakhapatnam storage had a small amount of unfilled space which was filled with Iraq crude oil. India meets 85 per cent of its oil needs through imports. Its refiners maintain 65 days of crude storage, and when added to the storage planned and achieved by ISPRL, the Indian crude storage tally goes up to about 87 days.
This is very close to the storage of 90 days mandated by International Energy Agency (IEA) for member countries.

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With the central government bringing the auto scrapping policy back on the table the volume of medium and heavy commercial vehicles on the road could come down significantly, said HDFC Securities in a report. This shrinking volume of commercial vehicles might not be all bad, as it opens pockets of opportunity with commercial vehicle (CV) sales gaining momentum as the on-road volumes decline. The report adds that the slowing loan growth and falling auto sales for the past two years could change rapidly with the scrapping policy in space. The move could benefit auto financiers as loan growth may surge while consumers look to buy new vehicles.

Nitin Gadkari, Minister of Road Transportation, earlier this month said that the scheme is being finalised and could be expected by next month. “While the intention is evident, little is known about the details of the scheme. These details would entirely determine the extent of the impact of the scheme on auto OEMs and auto financiers alike,” the report said. Analysts at HDFC Securities expect the scheme to be mandatory for all, however it is still unclear whether the government will offer incentives to owners at this juncture when the government’s financials are not too strong.

“We believe the announcement of this scheme will be beneficial as CV sales have been impacted by the increase in axle load norms, the introduction of BSVI vehicles and the COVID-related downturn,” HDFC Securities said. It estimates that around 6.5 lakh CVs were sold between financial year 2001-15 and 5.63 lakh between financial year 1996-2000. “The scrapping scheme would be an important driver of sales, in our view. Both the OEMs, Tata Motors and Ashok Leyland, will benefit from the above,” the report adds. Additionally it says that Eicher Motors and Mahindra & Mahindra could also benefit. HDFC Securities has an ‘Add’ rating on Tata Motors.

The benefit of the scrapping policy will also be enjoyed by auto financiers who have in recent years witnessed slowing loan growth as auto sales succumbed during the slowdown in the country’s economic growth. “Regardless of the vintage of vehicles covered, the scrapping policy will result in up-trading which bodes well for the growth prospects of vehicle financiers in the long-run,” HDFC Securities said. Financiers of used vehicles could also see strong demand with consumers lining up to buy pre-used vehicles at the current juncture. Although the report does not estimate the changes in assets under management for vehicle financiers without knowing the details of the policy, Cholamandalam Investment and Finance Company and Au Small Finance Bank remain the preferred picks in vehicle financing space.

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IRCTC shares jumped over 3 per cent to trade at Rs 1,459.95 apiece on BSE after the Indian Railway Catering and Tourism Corporation announced to run additional special trains with effect from Saturday, September 12, 2020. The stock hit a 52-week high of Rs 1,995 apiece in February this year since then the stock has corrected nearly 27 per cent. In March this year, Indian Railways cancelled all the passenger train services and passenger ticketing in an attempt to contain the fast-spreading Coronavirus pandemic. “Indian Railways to run additional 40 pairs of more special trains w.e.f. 12th September 2020. These will be fully reserved trains. Tickets can be booked from 10th September 2020,” Ministry of Railways said.

IRCTC shares were trading 1.39 per cent higher at Rs 1,434 apiece, as compared to a 0.66 per cent gain in S&P BSE Sensex. So far in September, IRCTC shares have gained 8 per cent. These trains will be in addition to the existing 30 special Rajdhani type trains started effective from May 12, 2020, and 200 Special Mail Express trains introduced effective from June 1 (total 230 trains).

IRCTC shares were listed on bourses on October 14, 2020, at a listing price of Rs 644 per share. In a BSE filing, IRCTC informed that these services shall be in addition to the Shramik specials and the special trains, which are already under operation. “The composition of these trains would be the same as of existing regular services. Stoppages shall be restricted in view of the suggestions of State Governments. These will be fully reserved trains,” it added.

Last month the government invited bids from merchant bankers for managing the stake sale in Indian Railway Catering and Tourism Corp (IRCTC). DIPAM while inviting Request for Proposal (RFP) said that the GoI intended to disinvest a part of the paid-up equity capital of IRCTC out of its shareholding through ‘Offer for Sale (OFS) method of shares by promoters through the stock exchanges’ as per Securities and Exchange Board of India (Sebi) Rules and Regulations. In the January to March quarter of FY20, IRCTC reported a 79.3 per cent jump in net profit from a year ago. The company reported a net profit of Rs 150.6 crore, compared with Rs 84 crore a year ago.

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Happiest Minds Technologies initial public offering (IPO) was oversubscribed within less than three hours from the opening of the window. The IPO saw massive response from retail investors who subscribed to the issue over 5 times their quota. From the 2,32,59,550 shares that are up for subscription, bids were received for 2,53,23,020 shares which translated to a 1.09 times subscription rate. Happiest Minds Technologies, a IT service and consulting firm, run by Ashok Soota beat the market blues as Sensex and Nifty danced between gains and losses.

Qualified Institutional Buyers (QIB), were seen bidding for only 8% of the stocks that have been offered to them. QIBs usually enter on the last day of the subscription window. On the other hand, Non-Institutional Investors (NII) bid for 21% of their quota in less than three hours. Large part of the NII demand, for the 63,43,513 shares offered to them, came on the BSE. Retail investors oversubscribed their portion by over 400 times taking their bidding to 5.44 times on Monday morning. Retail investors have been offered only 42,29,009 shares.

The over Rs 700 crore issue of Happiest Minds Technologies includes an offer for sale for 35.66 million shares and a fresh issue of 6.6 million shares. “At the higher end of the price band, the issue is valued at 29x FY20 P/E (fully diluted), which is comparable to larger mid-sized IT companies,” said brokerage firm Motilal Oswal in a note. Happiest Minds is being eyed as a good bet in a defensive sector like Information Technology with its strong presence in digital services and fast improving financial performance. Happiest Minds IPO is offering shares in the Rs 165-166 price band. The IT company managed to raise Rs 316 crore last week. Anchor investors included the likes of the Government of Singapore, Goldman Sachs, Kuwait Investment Authority, and Nomura Funds Ireland, among others.

A key factor driving the company’s business and attracting investors towards it is the strong promoter in Ashok Soota. Before establishing Happiest Minds in 2011, Ashok Soota was one of the founding members of MindTree Ltd prior to which he was also the vice chairman of Wipro Ltd. “Considering the very high exposure to digital services and strong promoter background we expect that the company will continue to grow at a faster pace as compared to similar sized companies and therefore should command a premium valuation to the peer group,” said Yash Gupta, Equity Research Associate, Angel Broking.

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