Latest news with #DeepakJasani
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Business Standard
7 days ago
- Business
- Business Standard
Nifty IT worst performer so far in 2025, drops 10%; time to bottom fish?
IT stocks in focus: Indian IT stocks have been caught in a storm this year, underperforming the broader market by a wide margin as global and domestic headwinds continue to pile up. Once a darling of investors, the sector has struggled to find its footing in the first half of calendar year 2025, weighed down by persistent FII outflows, geopolitical uncertainty, a sluggish deal pipeline, and global macro risks, analysts said. Between January 1 and June 25, the Nifty IT index has slumped 10 per cent, in stark contrast to the Nifty 50, which is up 6.3 per cent during the same period, NSE data showed. Individually, Infosys has plunged about 14 per cent this year-to-date (Y-T-D), Tech Mahindra remained flat with a negative bias, Wipro and HCLTech slipped over 10 per cent each. LTIMindtree tanked 4.6 per cent, while Coforge fell 2.4 per cent. The divergence is striking even when compared to other sectors. Nifty Auto has gained 4.3 per cent, Nifty Bank has surged 10 per cent, and Nifty Metal is up 8 per cent. Other indices including Nifty FMCG (down 3.5 per cent), Pharma (down 7 per cent), and Realty (down 2 per cent), too, have managed to outperform IT. One of the biggest drags has been sustained selling by foreign institutional investors. FIIs have pulled out a net ₹1.35 trillion from Indian equities in the first six months of 2025, led by heavy outflows in January (₹87,374.66 crore) and February (₹58,988.08 crore). Although March to May saw marginal inflows, selling resumed in June, reflecting growing global caution. Track Stock Market LIVE Updates The rupee's underperformance has added to the concerns. It has depreciated by 0.3 per cent so far this year, ranking among the worst in Asia, Bloomberg data showed. While a weaker rupee usually benefits IT exporters, in this instance, it has done little to cushion sentiment as the global environment remains fraught with uncertainty. The US-China trade conflict has only made things worse. Rising tariffs and protectionist rhetoric have cast a long shadow on global tech spending. Indian IT firms, which earn the lion's share of their revenues from the US, are particularly vulnerable to cutbacks in discretionary spending and delays in outsourcing decisions. Trade tensions have also disrupted supply chains and led to postponement of digital transformation deals. Market veteran Deepak Jasani noted that IT companies are currently struggling with revenue visibility due to the absence of large deal wins. While smaller deals are still taking place, they haven't provided much reassurance to the sector. 'The disruptions driven by artificial intelligence (AI) have created uncertainty among IT spenders and investors regarding where—and whether—to spend or invest in the IT space.' Additionally, ongoing tariff wars, Jasani said, pose a broader risk to global economic growth, which, if it slows, could further pressure IT companies by reducing deal flow. Contrasting this, Kotak Institutional Equities noted that AI adoption is progressing, moving from proof-of-concept (POC) to production in areas like software development, content creation, and BPO services. Tools like GitHub Copilot and Claude are gaining traction, and clients are encouraging vendors to integrate generative AI for efficiency gains. While these efficiencies can be meaningful, they currently fall short of the lofty claims made by hyperscalers. Opinions remain split on AI's deflationary impact. While IT firms expect savings to be reinvested into new initiatives, potentially boosting demand, others in the industry worry that GenAI may ultimately prove a net negative for services revenue. A mixed set of Q4FY25 results from major IT players further weighed on sector sentiment. Infosys, HCLTech, and Wipro all posted subdued performances, citing weak demand and delayed deal ramp-ups. Infosys reported a sequential revenue decline in constant currency and cut its FY26 growth guidance to 0–3 per cent. HCLTech's results were in line, but soft project execution led it to trim FY26 guidance to 2–5 per cent. Wipro posted just 0.8 per cent CC revenue growth and forecast a Q1FY26 decline of 1.5–3.5 per cent, reflecting weak discretionary spending and cautious client sentiment. On the investment front, Jasani suggested focusing on select mid-cap IT stocks, while exercising caution with large-cap names, which appear overowned at current levels.
Mint
25-06-2025
- Business
- Mint
Radhika Gupta cautions against ‘influencer advice' on unlisted stocks: ‘Reality of valuations and financial gravity'
Radhika Gupta, MD & CEO of Edelweiss Mutual Fund has a word of caution for ordinary investors looking for high returns without understanding the risks. Noting that influencers push small investors towards 'crazy investment opportunities' that are meant for more seasoned early stage investors, by playing on the FOMO (fear of missing out) factor, Radhika Gupta pointed to the HDB listing share price as lesson. Writing on social media platform X (formerly Twitter), Radhika Gupta said, ''Industrialists and celebrities are going crazy over this one investment opportunity. It's not mutual funds or real estate. Are you missing out?' Says one influencer video telling people to invest in UNLISTED stocks,' she said. She noted, 'A perfectly good asset class which was meant for early stage investing for high risk takers is now marketed as the next sliced bread. High returns, certainly a better IPO than the unlisted price and great money.' 'This article should be a reality check! Public, private, or in between, there is a reality of valuations and financial gravity,' she added, giving an example of the valuation from the HDB Financial Services' initial public offering (IPO). On June 24, Mint reported that investors who bought HDB Financial Services' unlisted shares are in for a rude shock as the HDFC Bank's non-banking arm IPO has got a price band of ₹ 700-740 — almost half the unlisted shares, which were trading at ₹ 1,250 apiece. HDB Financial's IPO, the largest for an Indian non-banking financial company, opened for subscription today, on June 25, with large institutions bidding a day earlier. For small, retail investors in particular, acquiring unlisted shares always involves risk as regulations and safeguarding by stock exhanges is missing. Speaking to Mint, market expert Deepak Jasani warned that there is a risk of fraud and investors can lose their capital. Notably, grey market activity typically begins in anticipation of the company's public listing. Early activity may start as soon as the draft red herring prospectus (DRHP) is filed, but it typically picks up pace once there is more clarity on the IPO launch. Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
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Business Standard
16-05-2025
- Business
- Business Standard
Banks, defence, OMCs: Which PSU stock to buy now? Analysts pick top bets
PSU stocks to buy: Once Street's favourite, shares of public sector undertakings (PSUs) have not yielded much returns to investors so far this year. Excluding the recent rally in defence shares, only a handful PSU stocks have outperformed the benchmark Nifty50 index during the period. So far in calendar year 2025 (till May 14), the Nifty CPSE index has risen 4.14 per cent, in-line with the Nifty50 index's gain of 4.3 per cent, ACE Equity data shows. By comparison, the Nifty CPSE index climbed 25.25 per cent in CY 2024 and 73.7 per cent in CY 2023 as against the benchmark's rally of 8.8 per cent and 20.2 per cent in the respective years. The trend, analysts believe, may not change much in the coming months and investors should cherry-pick PSU stocks based on valuation comfort along with earnings growth visibility and policy support. "The universe of PSU stocks is huge and diverse. Investors should bet on specific sectors and stocks from the basket as most of them may continue to consolidate after years of outperformance," said Kranthi Bathini, director of equities at WealthMills Securities. Among individual stocks, Bharat Dynamics, Mazagon Dock Shipbuilders, Garden Reach Shipbuilders, Bharat Electronics, Mishra Dhatu Nigam, Hindustan Aeronautics, and Cochin Shipyard from the defence pack have surged between 10.4 per cent and 59.3 per cent this year. While the rally in defence-related PSU counters was on the back of India - Pakistan geopolitical conflict, shipbuilding stocks found favour amid the government's strong focus on improving India's maritime infrastructure and indigenisation push. Outside these baskets, only NBCC (India), Steel Authority of India (SAIL), Bharat Petroleum Corporation of India (BPCL), Indian Oil Corporation, NMDC, and MOIL have outperformed the benchmarks by rising up to 15 per cent during the period. Among stocks, outside of the CPSE basket, PSU banks like Union Bank of India, Bank of India, Indian Bank, and Canara Bank outran the Nifty50 index by rallying in the range of 5.5 per cent to 12 per cent. "PSU stocks are affected a lot by the government policies as the ownership and regulatory control rest with them. Investors should, thus, invest in companies which are, relatively, stable from a policy viewpoint, are non-cyclical in nature, and have high dividend yields," said Deepak Jasani, a stock market veteran. High dividend yield, he added, provides a margin of safety against any decline in stock prices. PSU stocks to buy From an investment perspective, analysts say investors interested in the PSU space could look at opportunities across sectors driven by strong policy support, infrastructure momentum, and improving fundamentals. Industries such as oil and gas, and metals, which are cyclical in nature, may be avoided as cycles are difficult to predict and impacted by macro variables, they advise. "While we have a 'neutral' view on the PSU sector, investors willing to invest in PSU stocks can look at the renewable energy and/or transmission infrastructure sector amid the government's policy push. Defence companies, too, may remain in focus as exports are expected to surge to ₹50,000 crore by fiscal year 2029-30 (FY30) with indigenous production ramping up from ₹1.6 trillion to ₹3 trillion," said Anil Rego, founder and fund manager at Right Horizons PMS. Deepak Jasani, meanwhile, backs PSU stocks from the metal, oil refining, banking space on the back of their dividend yielding potential. "PSU banks are the safest sector to be in. That apart, oil refining companies, and energy-linked companies like Gail (India) and Coal India, which are insulated from global developments, can be a good bet," he said. Echoing similar views, Kranthi Bathini of WealthMills Securities said selective outperformance could be seen in PSU banks, defence, and OMC stocks going ahead.
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Business Standard
05-05-2025
- Business
- Business Standard
Buybacks down to a trickle after tax tweak shifts burden to shareholders
Share buybacks have all but disappeared following a rule change on October 1 last year that shifted the tax burden from companies to shareholders. Under the revised norms, buyback proceeds are taxed as dividends at the shareholders' applicable income-tax rates, significantly increasing the liability for high-networth individuals and institutional investors in the highest tax bracket. Since the change, only two buybacks have been completed: A ₹360 crore repurchase by ferro alloys manufacturer Nava and a ₹72 crore offer by online matrimonial services provider 'Buybacks have dried up since the tax-rule change, which aligned their taxation with dividends. Despite a bear market since October — a period when buybacks typically thrive — activity has been negligible,' said Pranav Haldea, managing director, Prime Database. Dividends and buybacks constitute the primary mechanisms for returning excess cash to shareholders. The new structure seeks to eliminate the tax arbitrage between the two routes. Currently, companies incur no tax outgo on dividend payments, which are taxed solely in the hands of the recipient in accordance with their income bracket. With the parity in tax treatment, market participants are preferring dividends as the more efficient vehicle for capital distribution. Unlike buybacks, dividends do not require the appointment of merchant bankers, face fewer compliance requirements from the Securities and Exchange Board of India (Sebi), and can be executed at a greater speed. Buybacks, in contrast, are administratively heavier and typically take several weeks to complete. Between FY17 and FY19, the share of buybacks in total shareholder rewards increased significantly due to a tax differential. From April 1, 2016, the government introduced an additional 10 per cent levy on dividends, pushing the effective dividend distribution tax (DDT) to 20.6 per cent, while listed company buybacks remained tax-exempt. The proportion of buybacks in total shareholder rewards in FY16 stood at just 1 per cent, rising to an average of 25 per cent over the FY17-FY19 period. To address this tax imbalance, the government imposed a 20 per cent buyback levy from April 1, 2019. Nevertheless, buybacks remained attractive for cash-rich firms as the tax liability rested with the company, not those tendering their shares. The most recent shift in tax incidence has, once again, altered the landscape. A buyback entails a company repurchasing and extinguishing its own shares, thereby reducing its equity base and enhancing metrics such as earnings per share (EPS) and return on equity. 'Companies now prefer dividends to buybacks. The EPS boost from buybacks is marginal, as the buyback amount is small relative to market capitalisation,' said Deepak Jasani, former head of retail research at HDFC Securities. The remaining strategic rationale for buybacks, he said, lay primarily in enabling promoters to consolidate their holdings by not tendering their shares. 'Only firms where promoters seek to raise their stake are likely to pursue buybacks. Otherwise, dividends involve simpler procedures and fewer compliances,' Jasani added.
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Business Standard
23-04-2025
- Business
- Business Standard
Portfolio check: Investors dump this bank stock amid Pahalgam terror attack
J&K Bank share price today: J&K Bank share price tumbled nearly 9 per cent today following a terror attack in Pahalgam, Kashmir, on Tuesday, April 22, 2025. J&K Bank shares declined 8.6 per cent on the BSE in the intraday trade on Wednesday, April 23, and hit a low of ₹103.41 per share. Around 0.70 million shares had changed hands on the stock counter on the stock exchange till 10:30 AM, as against a two-week average volume of 0.52 million shares. Together with the volume on the National Stock Exchange (NSE), 16.10 million shares have changed hands on the J&K Bank counter. Pahalgam Terror Attack: Why are J&K Bank shares falling? J&K Bank shares came under selling pressure on Wednesday after terrorists opened fire at tourists at Pahalgam in Kashmir, in one of the deadliest terror attacks in the valley since the Pulwama Attack in 2019, on Tuesday afternoon. At least 26 people have been killed and several were left injured. ALSO READ | The attack has stoked fears of unrest in the region as searches by the Indian security forces are underway. Besides, the Indian Army killed two terrorists at Sarjeevan, in the Uri Nala region of Jammu and Kashmir's Baramulla district, on Wednesday, foiling their infiltration attempt. "J&K Bank shares saw a knee-jerk reaction on the downside, following the news of a terror attack in Pahalgam. The evolving situation in the region will drive the senitment in the stock over the coming days. The stock may recover with some gap if the situation does not deteriorate further," said Deepak Jasani, a stock market veteran. Meanwhile, Prime Minister Narendra Modi has "strongly condemned" the terror attack in Pahalgam, Jammu and Kashmir. He further vowed that those behind the "heinous" act will be brought to justice. "They will not be spared! Their evil agenda will never succeed. Our resolve to fight terrorism is unshakable and it will get even stronger," he posted on social media platform 'X'. PM Modi will has also returned to India, cutting short his trip to Saudi Arabia, and is scheduled to hold a CCS (Cabinet Committee on Security) meeting later today. J&K Bank latest news The Pahalgam terror attack cut J&K Bank shares' five-day rally. Between April 11 and April 22, J&K Bank shares surged 24.22 per cent on the BSE as against a 5.9-per cent rise in the Sensex index. J&K Bank's market capitalisation has decreased to ₹11,454 crore. The stock hit a 52-week high of ₹147 per share on May 6, 2024, and a 52-week low of ₹82 per share on April 7, 2025. In the March 2025 quarter, Jammu Kashmir Bank recorded a 10.61 per cent year-on-year increase in its Total Business, at ₹2,52,779.14 crore. J&K Bank's total deposits, meanwhile, rose 10.24 per cent Y-o-Y to ₹1.48 trillion in Q4FY25. The bank's gross advances were up 10.32 per cent Y-o-Y to ₹1.06 trillion, and CASA deposits increased 2.6 per cent on year to ₹69,843.5 crore. About J&K Bank Jammu and Kashmir Bank (J&K Bank), a Scheduled Commercial Bank, is headquartered at Srinagar. The bank provides financial services in the Union Territories of Jammu & Kashmir and Ladakh, and is designated by Reserve Bank of India (RBI) as its exclusive agent for carrying out banking business for the Government of Jammu & Kashmir and Ladakh. The bank offers retail credit products, including home, personal loans, education loan, agriculture, trade credit and consumer lending, a number of unique financial products.
