The immediate hurdle for the index is 11,150, and if we close above these levels then we could further witness short covering which could take the index higher towards 11,200-11,250 levels

This week, Indian markets logged sharp gains from its recent lows as Nifty once again reclaimed 11,100 levels on local bourses on the back of some positive announcements made by the finance minister last week, along with the RBI’s decision to transfer 1.76 lakh crore from its reserves to the government.

From the technical front as well, the Nifty has given almost a V-shaped recovery after testing its long-term moving averages on the weekly interval as short-sellers were seen covering their positions.

At the current juncture, Put writers are actively adding open interest in 11,000 Put strike which should now act as strong support for the Nifty from an expiry point of view.

However, on the higher side, 11,150 is the immediate hurdle for the index. If we close above these levels, we could further witness short covering which could take the index higher towards 11,200-11,250 levels.

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The lender is looking to buy out assets worth around Rs 6,000 crore from the fund-starved non-banking finance companies this quarter

Shares of Bank of Baroda climbed over 4 percent on BSE on August 27, a day after the public lender said it's capital raising committee has approved raising up to Rs 2,150 crore in Tier-I, II bonds

"...capital raising committee of our bank has approved today i.e. on 26.08.2019, the issuance of Basel III compliant additional Tier I bonds for aggregate total issue size not exceeding Rs 1,650 crore, with a base issue size of Rs 500 crore and a greenshoe option to retain oversubscription up to Rs 1,150 crore," the bank said in a regulatory filing.

Meanwhile, the bank is looking to buy out assets worth around Rs 6,000 crore from the fund-starved non-banking finance companies this quarter, PTI reported on August 26, quoting a senior bank official.

The lender had already bought around Rs 3,500 crore loans from NBFCs in the June quarter, while for the year March 2019, it had purchased assets worth around Rs 10,000 crore from NBFCs/housing finance companies.

The bank is in discussions will NBFCs/HFCs such as PNB Housing Finance, Indiabulls Consumer Finance, IIFFL, Annapoorna MFI among others for this, the report further said.

In the budget, the government had said it would provide a one-time six months' partial credit guarantee to public sector banks for the first loss of up to 10 percent on their purchases of high-rated pooled NBFC assets, amounting to Rs 1 trillion.

The lender is also targeting to disburse Rs 1,000 crore under the Reserve Bank's recently introduced co-origination model between banks and non-banking financial companies, this quarter and has already lent Rs 50 crore to Srei Finance and Edelweiss Financial.

The bank is also in talks with 10 more NBFCs and micro-finance companies, including Cholamandalam, Indiabulls Housing, Adani Capital, IIFL Finance, Hero Housing, and Centrum Housing, among others for this

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Global brokerage HSBC upgraded stock to buyShares of Bharat Heavy Electricals (BHEL) rallied 10 percent intraday on August 27 after it won orders worth Rs 2,500 crore

"Valued at around Rs 2,500 crore, the orders have been placed on BHEL by NTPC," the company said, adding the orders involve supply and installation of flue gas desulphurization (FGD) systems for 13 coal-based units at 2,600 MW Korba STPS Stage I, II & Ill in Chhattisgarh and 2,100 MW Ramagundam STPS Stage I & II in Telangana.

The stock was quoting at Rs 54.65, up to Rs 4.70, or 9.41 percent on the BSE at 1005 hours IST.

Global brokerage HSBC upgraded stock to buy. It sees near-term weakness in business fundamentals of state-owned power equipment maker BHEL, but it upgraded the stock to buy due to steep correction, and balance sheet strength and long-term growth potential.

However, the global brokerage house slashed price target to Rs 60 from Rs 62 per share after lowering earnings estimate by 1-5 percent on lowered order inflow expectations.

"Downside risks include a continued increase in receivables & lower margins," it said.

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The bottom-out effect along with the government's growth-inducing measures were the prime reasons for the Indian equity markets stellar rise on Monday

Experts have said that key indices had bottomed-out last week as investors waited for the government's measures to shore up growth. The steps were announced after market hours on Friday. 

In stock parlance, the bottom-out effect appears when any scrip or index touches the lowest possible point with respect to various market conditions and time periods. 

"Equity markets had bottomed-out on a near-term basis last Friday. Today's rise has come as a result of that trend," HDFC Securities' Retail Research Head Deepak Jasani told IANS. 

"If further steps are taken to usher in growth then the bottom-out effect will last from immediate to medium term period."

Last Friday, Finance Minister Nirmala Sitharaman gave a major economic boost to diverse sectors such as NBFCs, auto, housing, MSMEs, equity markets and banking via a slew of measures on tax surcharge, GST refunds, easier loans and demand generation.

"Multi RSI (relative strength index) divergence, record FPI futures short position and the subsequent reversal candle indicates that a swing low and bottom is in place," Edelweiss Professional Investor Research Chief Market Strategist Sahil Kapoor told IANS.

"The market rose on positive breadth with the corresponding decline in yields and stoppage of rupee depreciation. This indicates that a break above 200DMA (day moving average) for Nifty is likely to take it from 11,400 to 11,600 range."

On Monday, Indian markets advanced sharply on the back of Finance Minister Sitharaman's measures to combat slowdown and improve foreign investor confidence.

Both the Sensex and Nifty surged over 2 per cent as investors rejoiced over what many analysts are dubbing as Sitharaman's "mini-budget". The single biggest push came via the roll-back of the much-criticized tax surcharge on Foreign Portfolio Investors (FPIs).

The BSE Sensex jumped 792.96 points, or 2.16 per cent, to close on Monday at 37,494.12, while the Nifty gained 228.50 points, or 2.11 per cent, to 11,057.85.

The financial sector and public sectors banks (PSBs) led the charge on Monday. The Nifty Financial Service index closed 4 per cent higher, followed by the Nifty PSB index that was up 3.58 per cent. The Nifty Realty index surged by 3.74 per cent.

"The initial set of actions, though small, has enhanced market sentiment and confidence," said Vinod Nair, Head of Research, Geojit Financial Services Ltd.

The market will trade in a positive bias awaiting further developments regarding additional government measures and US-China trade talks, he added.

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Nifty could move to the immediate resistance level of 11,200 levels, and any close above 11,200 levels would result in further short covering which might push Nifty to levels around 11,400-11,500

Nifty50 surged 229 points on August 26 to post its highest absolute gains since May 20. It closed at 11,058 levels. The move was largely on the back of a series of measures announced by the finance minister on August 23 to build the confidence of the capital markets and the auto industry.

By closing at 11,058 levels on August 26, the Nifty50 conquered its 20-days EMA hurdle for the first time after the budget day. The Nifty50 was facing resistance around its 20 days exponential moving average and reversed south the moment it touched since the breakdown seen on the budget day.

Moreover, on August 23, the Nifty has formed bullish “Piercing line” candlestick pattern on the daily charts. This pattern usually indicates a trend reversal.

The Relative Strength Index (RSI) Oscillator has also formed positive divergence on the daily chart of Nifty and Bank Nifty. In the derivatives, we have seen the first sign of long build-up in the Nifty Futures on August 26.

Amongst the Options, we have seen Put writing at 10,800-11,000 strike prices, indicating strong support around these levels for the coming days.

Unless Nifty closes below it, the trend would be considered bullish for the markets. On the upside, the 11,200 level is likely to act as an immediate resistance where Calls have been written.

This level also coincides with the 200-day SMA which is placed at 11,196 levels. The Nifty Midcap and Smallcap indices also participated in the rally where they gained by 1.58 percent and 2.34 percent respectively.

The Advance decline ratio remained positive for the last two days which is a positive sign. Considering the above indicators, we believe that Midcap/Smallcaps have formed a bottom, and we may see a sharp bounce back from here on.

To conclude, the short-term trend for the Nifty has turned bullish. Therefore, our advice would be to accumulate longs in the Nifty with the stop loss placed below 10,800 levels.

On the higher side, the Nifty could move to the immediate resistance level of 11,200 levels, and any close above 11,200 levels would result in further short covering which might push Nifty to levels around 11,400-11,500.

In the Bank Nifty, one should accumulate long positions with the stop loss of 27,500 levels. On the higher side, the immediate resistance is seen around 28,500 levels, followed by 28,870.

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The top Nifty50 gainers include Indiabulls Housing Finance which is up close to 4 percent followed by HDFC, Adani Ports, Bajaj Finance and Bajaj Finserv while the top losers are Tata Steel, JSW Steel, Vedanta, Hindalco Industries and Hero MotoCorp

Despite global markets in a ul mood, Indian benchmark indices are trading on a positive note after Finance Minister Nirmala Sitharaman on August 23 unveiled a slew of measure to boost growth, increase liquidity, and revive consumer and investor sentiment in the Indian economy.

Measures such as removal of surcharge on foreign portfolio investors (FPI) and removal of CSR violation as the criminal offence will cheer market participants.

Sensex is up 133 points at 36,833 marks while the Nifty gained 28 points and is trading at 10,857 level.

Nifty PSU bank is the outperforming sector, up 1.5 percent led by Indian Bank, Oriental Bank of Commerce, Central Bank of India, Bank of India and Punjab National Bank.

The media index also added over a percent led by Dish TV, Eros International Media, UFO Moviez, TV18 Broadcast, Zee Entertainment and DB Corp.

Realty stocks are also buzzing, the top gainers are Indiabulls Real Estate which spiked over 8 percent followed by Sobha, Godrej Properties and Prestige Estates.

Metal stocks have taken a hammering after the China-US trade war escalated, weighing further on global growth. The top losers include Tata Steel which tanked over 5 percent followed by Vedanta, JSW Steel, Jindal Steel & Power, Hindalco Industries and SAIL.

Nifty IT is trading in the red dragged by Wipro, Tech Mahindra, Oracle Financial Services, Mindtree, Infosys and HCL Tech.

India VIX spiked 4.84 percent and is trading at 18.19.

The top Nifty50 gainers include Indiabulls Housing Finance which is up close to 4 percent followed by HDFC, Adani Ports, Bajaj Finance and Bajaj Finserv while the top losers are Tata Steel, JSW Steel, Vedanta, Hindalco Industries and Hero MotoCorp.

The most active stocks are State Bank of India, Indiabulls Housing, HDFC Bank, YES Bank and Maruti Suzuki.

Tata Steel, JSW Steel, Hindalco Industries, MRPL, IndusInd Bank, Mahindra CIE and Eicher Motors have hit a w 52-week low on BSE.

Among the Nifty50 names, 23 stocks advanced while 27 declined. On the BSE, 1211 stocks advanced, 804 declined and 103 remained unchanged.

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This is in continuation to the order received for stage III and IV (2x500 MW and 2x500 MW) in September last year

The share price of Larsen & Toubro added nearly 2 percent intraday on August 23 after the company won an order from NTPC.

The power business of Larsen and Toubro (L&T) has bagged engineering, procurement and construction (EPC) order from NTPC to set up flue gas desulphurisation (FGD) system at Vindhyachal super thermal power station, Stage-I to II (6x210 MW Ft 2x500 MW), in Madhya Pradesh, as per company release.

This is in continuation to the order received for stage III and IV (2x500 MW and 2x500 MW) in September last year.

With this, L&T will be implementing FGD systems for 12 units constituting 4,260 MW at NTPC's Vindhyachal power plant which will have the maximum number of FGD systems at one location in India.

Installation of FGD systems in existing and upcoming thermal power plants has been made mandatory by the Ministry of Environment, Forest and Climate Change (MoEFCC) Government of India, to curtail SO2 emissions.

Larsen & Toubro was quoting at Rs 1,287.30, up Rs 0.30, or 0.02 percent on the BSE

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Budget carrier IndiGo will restart flight services between Delhi and Singapore from September

Effective from September 12 and September 16, IndiGo will operate its non-stop flights on Delhi-Singapore and second frequency on Delhi-Doha route, respectively. 

"We are committed to strengthening our international operations from Delhi to important destinations in Asia," said IndiGo's Chief Commercial Officer William Boulter. 

"As part of this expansion, we are introducing new flight services between Delhi-Singapore and second frequency on Delhi-Doha route. Singapore today is not only a tourist hub but also a shopper's paradise and there is a huge demand on the route."

At present, IndiGo has a fleet of over 200 aircraft and offers over 1,400 daily flights and connects 57 domestic destinations and 19 international destinations.

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Bharti Airtel, is staying strong and growing and has a robust balance sheet, said broking house, Goldman Sachs

Airtel has a robust balance sheet and a "best-in-class" spectrum footprint position which favours Bharti Airtel for future network roll-outs and market share gains. With declining capex intensity and rising margins on stable revenue growth, we expect Bharti to be FCF (Free Cash Flow) positive in the financial year 2020-21, Goldman Sachs said in a report. 

The report said the telecom operator has a strong wireless business growth potential.

"We forecast a 30 per cent EBITDA growth CAGR for India wireless (46 per cent of FY19E revenue) in FY19-22E driven by market share gains, customer upgrades/better customer monetization in data, and tariff hikes. With a recovery in India wireless, steady growth in Africa, and stable non-wireless businesses, we forecast Bharti to deliver an 8 to 18 per cent revenue/EBITDA CAGR in FY19-22E", it said.

The broking house also said the telco has a solid growth outlook for Africa. "We forecast a 9 to 11 per cent revenue/EBITDA CAGR in FY19-22E for Bharti's Africa business (24 per cent of FY19E revenue) driven by data and mobile money." 

"Its valuation is at t 8.5x CY20E EV/EBITDA, Bharti trades higher than its own historical average (of 7.3x) and its Asian telco peer median (of 7.1x). However, we expect Bharti's EBITDA growth over the next two-to-three years to be more than 3x its Asian telco peers and view a higher multiple as justified; Bharti trades in line with Asian peers on CY21 EV/EBITDA. 

"Our 12-month Discounted Cash Flow-based Trading Price of Rs 415 implies 15 per cent upside; our bull/bear scenarios suggest 40 per cent upside vs. 13 per cent downside."

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The share touched its 52-week high Rs 234.90 and 52-week low Rs 104.05 on 30 May 2019 and 16 August 2018

Shares of IOL Chemicals and Pharmaceuticals rose nearly 4 percent intraday on August 21 as the company made pre-payment of its term loan.

The company has made the pre-payment of the term loan of Rs 9.52 crore due to banks in addition to scheduled repayment, as per BSE release.

The company has made the pre-payment of the term loan of Rs 107.70 crore till date to reduce the term debt, which remains at Rs 123.45 crore as on date.

IOL Chemicals and Pharmaceuticals was quoting at Rs 189.75, up to Rs 5.65, or 3.07 percent on the BSE.

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USFDA inspected Vadodara facility between August 12, 2019, to August 20, 2019, for Bioequivalence Bioanalytical and Bioequivalence Clinical

Shares of Alembic Pharmaceuticals added 3 percent intraday on August 21 after the company received no observation from the US Food and Drug Administration (USFDA) for its Vadodara facility

The facility was inspected between August 12 and August 20 for bioequivalence bioanalytical and bioequivalence clinical.

They were issued Form 483s at the end of the inspection.

The share had touched its 52-week high of Rs 664 on September 27, 2018, and a 52-week low of Rs 435.10 on June 21, 2019.

Currently, it is trading 21.84 percent below its 52-week high and 19.28 percent above its 52-week low

Alembic Pharmaceuticals was quoting at Rs 519.00, up to Rs 8.65, or 1.69 percent.

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Until Monday, Mahanagar Gas Ltd’s (MGL’s) shares had fallen about 25% from their highs in end-March. One of the key reasons was the overhang of a potential stake sale by Shell India, which owned a 10% stake in the Mumbai-based city gas distributor

While Shell India has eventually sold its entire stake, and that too at a slight discount to prevailing prices, the news had a rather dramatic effect on MGL’s shares. With the stake sale out of the way, the shares rose as much as 8% on Tuesday to 848.60.

Shell sold 9.88 million shares at a price of 780 per share, according to data from the stock exchanges.

“We do not foresee the exit of Shell to have any negative fundamental impact on MGL since they have been in the business for more than 20 years and it is more process-driven from hereon," analysts at Jefferies India Pvt. Ltd said in a note to clients.

The sharp underperformance of MGL shares since April also meant that valuations were relatively low at 12.6 times estimated FY20 earnings. This gave further impetus to the relief on Tuesday.

“Now that the technical overhang has lifted, MGL’s valuations could well be rerated and investors’ focus can shift to fundamentals," says Nitin Tiwari, vice-president at Antique Stock Broking Ltd.

He adds: “MGL’s strong Ebitda margin did not warrant a big discount on valuations compared to its peers such as Indraprastha Gas and Gujarat Gas. Even though MGL’s volume growth has been relatively slower than peers, on the profitability front, it has done far better than its peers." Ebitda stands for earnings before interest, tax, depreciation and amortization.

MGL’s volume growth of 3.3% in the recently concluded June quarter was lower than Street expectations. On the other hand, its Ebitda performance was robust. “MGL reported strong results in 1QFY20 driven by Ebitda margins at 10.1 per standard cubic meter (SCM) leading to a 9% beat on our street-high Ebitda estimate," said the analysts at Jefferies India in a report on 8 August.

To be sure, whether Ebitda margins sustain in the coming quarters remains to be seen. For now, MGL investors are celebrating the fact that key event risk is out of the way.

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Zambian President Edgar Lungu will not meet the chairman of Vedanta Resources to discuss the disputed liquidation of its Konkola Copper Mines (KCM) on his visit to India this week, a statement from the Zambian State House said on Tuesday

Mumbai-listed Vedanta said earlier on Tuesday it would meet Lungu and his team for further discussions on KCM, but the Zambian State House said there was no meeting planned between the president and Vedanta Chairman Anil Agarwal or his representatives.

Vedanta has been locked in a dispute with the Zambian government since May when Lusaka appointed a liquidator to run KCM, which is 20% owned by Zambia's state mining company ZCCM-IH and the rest by Vedanta.

Zambia has accused KCM of breaching the terms of its licence, which Vedanta denies.

"The president is expected to meet representatives from 12 Zambian-based Indian companies, and KCM, whose majority shareholder is Vedanta, is not one of them," the State House said.

"His Excellency the President has already stated that the Zambian government will follow the Zambian people's wish over the KCM issue."

The miner had said it was looking forward to engaging with Lungu and his team in India and to building on discussions held last week in Lusaka.

The dispute at Africa's second-largest copper producer has intensified concerns among international miners about resource nationalism in Africa.

Vedanta has taken the matter to arbitration and tried in the meantime to block KCM's liquidation via courts in both South Africa and Zambia. However, the government has continued with the process and said in July it expected numerous bids for KCM within weeks.

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This project is funded by the Department of Telecom (DOT), Government of India and BSNL has been appointed as the nodal agency by the DoT for project execution

Shares of Himachal Futuristic Communication (HFCL) surged 8.5 percent intraday on August 20 after the company received purchase order worth Rs 2,467 crore.

The company has received a purchase order worth Rs 2,467 crore from Bharat Sanchar Nigam for setting up the converged nationwide IP /MPLS backbone & access network for armed forces under the network for spectrum (NFS) programme of the government.

The scope of work also includes operation and maintenance for a period of 10 years including 3 year warranty period for which Rs 862 crore will be paid by the Indian Defence Services after the warranty period is over.

This project is funded by the Department of Telecom (DOT) and the Government of India. BSNL has been appointed as the nodal agency by the DoT for project execution.

Himachal Futuristic Communication was quoting at Rs 19.85, up Re 1, or 5.31 percent on the BSE.

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The company reported standalone net loss during the quarter stood at Rs 87.35 crore as compared to net loss of Rs 55.24 crore in the previous year quarter. Net revenue of the company declined substantially by 74.78 per cent at Rs 37.82 crore in April-June quarter of this fiscal as against Rs 149.94 crore in the corresponding period last year. During the April-June quarter, operating expenses dropped by 41.50 per cent to Rs 103.47 crore from Rs 176.88 crore in a year-ago period.

Other Income grew by 266.04 per cent at Rs 1.94 crore versus (Jun'18 Rs 0.53 crore). Operating Profit surged by 143.69 per cent to Rs -65.65 crore as against Rs -26.94 crores in the year-ago period, while Operating Profit Margin (OPM) contracted year-on-year to 866.00 per cent in June quarter. Interest declined by 22.25 per cent y-o-y to Rs 18.14 crore

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Shares of Apollo Hospitals Enterprise Ltd have gained 10% since it announced its June quarter results on 13 August. With the performance reassuring investors on asset optimization and profit metrics, the stock hit a new 52-week high of 1,4687 on Friday

Losses the company’s new ventures, housed under Apollo Health and Lifestyle Ltd, reduced significantly. And, higher revenues at its pharmacy and hospitals improved operating earnings by 27%. Consolidated profit margins rose to 11.4% year-on-year, taking it to the highest levels in recent quarters.

However, the quarter saw a moderation in inpatient growth compared to the year-ago period. “Inpatient volume growth moderated in the quarter to 5.9% for the healthcare business and pricing/mix was the key driver of the 15% (revenue) growth," said Jefferies India Pvt. Ltd in a note.

Even so, the profitability gap between new and established hospitals remains enormous and has scope for improvement. Additionally, per-store metrics of relatively new pharmacy stores have room to improve.

“Two of Apollo Hospitals Enterprise’s businesses are yet to fuel return on capital employed (RoCE), as new hospitals with about 2,100 crores in capital employed are running at 63% occupancy; Apollo Health and Lifestyle, with about 600 crores in capital employed, is clocking about 35% utilization," said analysts at Edelweiss Securities Ltd in a note.

Comparatively, its peer Narayana Hrudayalaya Ltd, which trades at a lower valuation, has better margins at the consolidated level. Narayana Hrudayalaya turned its focus on asset-optimization and improving profit metrics.

Another peer, Fortis Healthcare Ltd, is beginning to see the benefits of management change. It aims to improve profitability through better utilization and cost optimization.

All three companies are not strictly comparable though, given their presence in a range of services from pharmacy to diagnostics to hospitals. But for the financial performance-focused investor, the peers seem to be offering a compelling recovery narrative.

“While we expect an improvement in margins, going forward, we believe that competitive risks are still high and that valuations leave no room for upside," said Jefferies India in a note to clients.

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In a major blow to the defaulting company IL&FS' auditors Deloitte and BSR and Associates, the Mumbai bench of the National Company Law Tribunal (NCLT) on Friday said that it has jurisdiction over these firms and the authority to ban them under the Companies Act for their alleged role in financial misappropriation

Deloitte Haskins and Sells (Deloitte) and global advisory firm KPMG arm BSR had challenged the NCLT's jurisdiction to prosecute the companies and ban them after the Corporate Affairs Ministry (MCA) had sought such a five-year ban on them. 

The tribunal said that the order is "appealable" and it was aware of the fact that the case could move ahead to the National Company Law Appellate Tribunal and the Supreme Court. 

Both the audit companies have been under the MCA's scanner after the probe by the Serious Fraud Investigation Office (SFIO) found that Deloitte had disregarded the Reserve Bank of India's (RBI) regulations and turned a blind eye to the defaulting firm IL&FS Financial Service Ltd's (IFIN) "evergreening" of loans, and never cross-checked any of the certificates used by the company to mislead lenders. 

BSR too was found to be involved in such gross negligence and violation of norms.

Reacting to Friday's order, a Deloitte spokesperson said: "The NCLT's ruling is unfortunate. While we need to review the written order before determining our further course of action, we continue to believe the NCLT lacks the jurisdictional authority to adjudicate this matter."

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Such sharp rallies are often a result of some pep talk or some relief measure which often fizzles out trapping the bulls who bought on the hopes that a new rally will begin

The Indian market snapped a four-week losing streak to close with gains of over 1 percent. The Nifty rose 1.02 percent while the S&P BSE Sensex closed with gains of 1.25 percent for the week ended August 9.

The S&P BSE Sensex is now back above 37,000 while the Nifty also managed to reclaim 11,100 levels for the first time since July 31.

The broader market performed in line with benchmark indices as the S&P BSE Midcap index rose 0.92 percent while the S&P BSE Smallcap index closed with gains of 1.62 percent for the week ended August 9.

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A slowdown in its European operations dragged down Tata Steel Ltd’s overall operating margins, which in turn took a toll on its stock price. The stock fell as much as 4.03% on Thursday, before closing 3.77% lower. Given the weak outlook, analysts have not ruled out a further derating

The double whammy of lower steel prices and higher raw material costs have been impacting steel producers. Steel prices have softened significantly in the past quarter leading to lower realizations. As a result, globally diversified firms such as Tata Steel have been hit.

Revenues from its European operations dipped by 11% year-on-year to 14,495 crores in the June quarter. Volume growth was lower than what the Street had pencilled in. Operational issues further dragged down performance. In fact, the European operations face headwinds from lower economic growth and uncertainty around Brexit.

Tata Steel’s Indian operations, though, held up somewhat, despite a slowdown in the domestic economy. Steel production rose 23% year-on-year to 4.5 million tonnes (mt), while sales increased by 18% year-on-year to 3.96 mt. As a result, domestic revenues rose by 12.7% from a year earlier. Higher operating costs, however, saw its domestic net profit shrink marginally, though subdued economic activity and liquidity issues will weigh on domestic consumption.

A rise in production could not perk up revenues because steel realizations were lower in the first quarter. Consolidated steel production rose 11% year-on-year to 7.15 mt, while sales increased 5% year-on-year to 6.34 mt. Domestic production surged 23%, while sales grew 18% from a year ago.

Nevertheless, lower realizations dragged down Tata Steel’s consolidated Ebitda (earnings before interest, tax, depreciation and amortization). Ebitda margins came in at 15%, which saw a sharp contraction of 200 basis points year-on-year.

Tata Steel has cut back on its domestic expansion plans due to slowing demand. Capital expenditure plans have been cut by 20-25%. This is also to help the company keep its deleveraging plans on course.

“Tata Steel has reiterated its deleveraging plan of $1 billion in FY20 relying on cash flows from 

a) downward revising FY20 capex by 20-25%

b) working capital release of  2,000 crores, and 

c) potential stake sale of south-east Asia business," said analysts at JM Financial Institutional Securities Ltd in a note to clients.

Still, its overleveraged balance sheet, coupled with a weak earnings outlook, could continue to weigh on the Tata Steel stock in the medium term.

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Shares of HCL Technologies Ltd lost about 10% since its March quarter results, underperforming the Nifty IT index, due to concerns over growth and profitability. The June quarter results will reassure investors to some extent

Constant currency revenues grew 4.2% from the March quarter, better than the most optimistic estimate on the Street. From a year ago, they are up 17%, the highest in recent years. Excluding the benefit of a recent acquisition, sequential revenue growth stood at 3.8%, which is healthy.

However, the benefit of revenue acceleration was negated by a steep fall in profitability to 17.1%. It is down a good 1.8 percentage points from the March quarter. As a consequence, operating earnings (earnings before interest and tax ) in dollar terms fell 6.3% sequentially. “Management already guided that Q1 margins will be weak owing to IBM products acquisition led transition costs while revenues would be absent and flow only from Q2. However, the quantum of margin drop is steep," said an analyst on condition of anonymity.

Apart from IBM product acquisition-related costs, a significant part of the incremental growth last quarter is on-site dependent, which has a low margin.

Even so, the company retained the 18.5-19.5% margin guidance for the full year. “I know that there is a bit of a climb from 17.1%, but we have an action plan," said C. Vijayakumar, president and chief executive officer of HCL Technologies.

The plan involves cost rationalization and revenue generation from recent investments. The IBM products acquisition will begin generating revenues from the current quarter, covering the costs of this investment. Investments and spends in the engineering division are projected to moderate. Further, the management plans to optimize the on-site-offshore mix and rationalize several other costs.

The steps will aid HCL Technologies’ profitability. But how well the management will succeed in eking out the gains will be known only when it delivers the September quarter results. Otherwise, it is confident of delivering 14-16% constant currency revenue growth it had guided for FY20.

Deal bookings moderated a bit last quarter, but the pipeline is strong. This should help the HCL Technologies stock, especially given its undemanding valuations and recent underperformance. “Potential acceleration in revenue growth, encouraging investments in applications business and momentum of large deals have been completely ignored," Kotak Institutional Equities said in a note. “To be clear, we do not like the products strategy of HCL, but find valuations at 12 times FY2021 estimated earnings difficult to ignore."

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