Infy beats street; Nifty closes above 6000

iifl12th July, 2013 : Comments by Amar Ambani, Head of Research, India Infoline 

Infy beats street; Nifty closes above 6000

It was another day of stellar gains for the Indian equity market. The benchmark indices continued their upswing on day two on strong set of results by Infosys.

The IT bellwether reported an about 4% increase in consolidated net profit at Rs. 2,374cr for Q1 FY14 as against a Rs. 2,289cr in the same period last year. Consolidated revenue for the IT major firm is up 17.2% at Rs. 11,267cr from Rs. 9,616cr in the year-ago period.

Commenting on the same, Amar Ambani, Head of Research of IIFL, said “Infosys results were better than estimated. Dollar revenues were up 2.7% quarter-on-quarter at $1.99bn while operating profit margin came in down 2 bps (100 bps=1%) QoQ at 26.5%. Infy also maintained its full year guidance at 6-10%.” Despite the stock staged a stellar 10.92% rally in trade today, Ambani feels the management commentary has not turned materially positive with concerns on discretionary spending.

IT was the main market driver followed by healthcare, oil and gas and banking stocks. On the other hand, consumer durables, realty and FMCG stocks were under pressure. The upswing extended only to large-cap counters, midcap and smallcap stocks did not participate in the rally.

The Sensex closed at 19,958, up 282 points, while the Nifty shut shop at 6,009, up 74 points over Thursday’s close. The Nifty last hit 6,000 on May 7.

The gainers pack included Infosys, IDFC, L&T, TCS, Reliance Industries, HCL Technologies, Tata Motors, Dr Reddy’s Laboratories, Tata Motors and Bharti Airtel while Jaiprakash Associates, ONGC, Maruti, UltraTech Cement, Grasim and IndusInd Bank lost out in trade today.

The advance-decline ratio favoured the bears. On the Bombay Stock Exchange, 1,226 stocks declined against 1,073 advances, while 148 stocks remained unchanged.

Volatility, as measured by India VIX, declined 1% at 18.89. It hit a day’s high of 18.96 and low of 17.68.