Infosys Shows Mixed Results, L&T Technology Services and Tata Technologies Face Profit Declines, While Persistent Systems Reports Increased Revenue

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Gift Nifty is up by 22.5 points in the early morning trade, indicating a positive opening for Indian stock market                            

Asian markets traded lower on Friday, following the overnight losses on Wall Street. Japan’s Nikkei 225 fell by 0.16%, while the Topix declined by 0.28%. South Korea’s Kospi dropped 0.93%, and the Kosdaq decreased by 0.29%. Hong Kong’s Hang Seng index futures also pointed to a lower opening.

The U.S. stock market ended sharply lower on Thursday, weighed down by selling in megacap growth stocks, with the blue-chip Dow falling the most. The Dow Jones Industrial Average plunged 533.06 points, or 1.29%, to 40,665.02, while the S&P 500 declined 43.68 points, or 0.78%, to 5,544.59. The Nasdaq Composite closed 125.70 points, or 0.7%, lower at 17,871.22.

Stocks News:

👉 Infosys Q1 (Consolidated QoQ) results show a profit decline of 20.1% to ₹6,368 crore from ₹7,969 crore. Other income dropped 72% to ₹733 crore from ₹2,619 crore. However, revenue grew by 3.7% to ₹39,315 crore from ₹37,923 crore. EBIT increased by 8.8% to ₹8,288 crore from ₹7,621 crore, and the margin expanded to 21.1% from 20.1%. In dollar terms, revenue grew by 3.3% to USD 4,714 million from USD 4,564 million, with revenue growth in constant currency terms at 3.6%. Infosys raised its revenue growth forecast for FY25 to 3-4% from 1-3% and retained its operating margin forecast for FY25 at 20-22%.

👉 L&T Technology Services reported an 8% decline in profit, falling to ₹313.6 crore from ₹340.9 crore. Revenue also slipped by 3% to ₹2,461.9 crore from ₹2,537.5 crore. EBIT decreased by 10.4% to ₹383.6 crore from ₹428.2 crore, and the margin dropped to 15.6% from 16.9%. In dollar terms, revenue was down 3.3% at $295.2 million compared to $305.1 million. Revenue in constant currency terms decreased by 3.1%.

👉 Persistent Systems reported a 2.8% drop in profit, falling to ₹306.4 crore from ₹315 crore. Revenue rose by 5.7% to ₹2,737.2 crore compared to ₹2,590.5 crore. EBIT grew by 2.6% to ₹384 crore from ₹374.4 crore. However, the EBIT margin dipped by 50 basis points to 14% from 14.5%.

👉 Tata Technologies experienced a 15.4% decline in profit, dropping to ₹162 crore from ₹191.5 crore in the previous year. Revenue increased by 0.9% to ₹1,269 crore from ₹1,257.5 crore. EBITDA fell by 7.7% to ₹231.1 crore from ₹250.5 crore, and the margin dipped by 170 basis points to 18.2% from 19.9%. Additionally, the company has partnered with Arm to drive innovation in software-defined vehicles (SDV).

👉 The foreign institutional investors (FIIs) bought equities worth Rs 5483 crore, while domestic institutional investors sold equities worth Rs 2904 crore, on July 18.

Domestic and International Events

• The Reserve Bank of India (RBI) reported that the economy’s natural rate of interest has increased since the pandemic and is expected to rise further, driven by the growth of potential output. The RBI estimated the natural rate to be between 1.4% and 1.9% in Q4FY24, higher than the 0.8% to 1.0% range in Q3FY22, the last time an estimate was made. This information was detailed in the central bank’s monthly bulletin.

• Japan’s inflation in June was slightly higher, with prices rising 2.6% year-on-year compared to 2.5% in May. However, the core Consumer Price Index (CPI) reading, which excludes volatile fresh food prices, was softer than market expectations, showing a 2.6% increase instead of the anticipated 2.7%.

• The European Central Bank (ECB) kept interest rates unchanged at 4.25% but indicated that September’s meeting is “wide open.” The ECB downgraded its view of the euro zone’s economic prospects and predicted that inflation would continue to decline, according to Reuters. The ECB had cut rates from record highs last month.

• Crude oil prices fell on Friday, setting up for a second weekly decline. Brent crude prices fell 0.6% to $84.50 a barrel, while US West Texas Intermediate crude futures declined 0.9% to $82.10 a barrel.