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Mint
3 hours ago
- Business
- Mint
Can Q1 results drive Nifty 50 to record highs despite the absence of an India-US trade deal?
The Indian stock market has been rangebound for almost a month now. The benchmark index has traded in a range of 24,470-25,670 since June. At first glance, it appears that the Indian stock market lacks fresh triggers to sustain gains above 25,600, which can drive it to fresh highs. However, the Indian stock market has exhibited remarkable resilience since March despite geopolitical tensions, tariff-related uncertainties, and elevated domestic market valuations. The Nifty 50 has been in the green monthly since March. However, in July so far, it has lost about half a per cent. The biggest factor limiting the gains of the domestic market is lingering uncertainty over an India-US trade deal. Despite prolonged negotiations and positive signals from Washington, India and the US have yet to finalise a trade pact. Both countries have now pushed back their deadline to finalise the trade deal to mid-July as US President Donald Trump extended the deadline for reciprocal tariffs to 1 August. While hopes are high that India and the US will strike a deal before the deadline, a full agreement between the two countries could be a multi-phased process. In that case, it is too early to conclude whether a potential preliminary deal will significantly trigger the market. Indian corporates will release their June quarter (Q1FY26) scorecard in the coming days. IT major TCS will report its Q1 results on July 10. Experts say that while an India-US trade deal will be an immediate trigger, the market needs significant earnings growth to sustain gains and touch record highs. Some experts highlight that the market has largely discounted a trade ideal, and it may not push the market beyond a range. "A clear breakout of the upper range of Nifty 25500 may happen on positive news of a trade deal between the US and India. But this is partly discounted by the market and, therefore, will not be sufficient to sustain the rally well beyond Nifty 25,500," said VK Vijayakumar, Chief Investment Strategist, Geojit Investments. The Nifty 50 may see limited upside in the short term, primarily due to muted earnings growth. Profit growth for index-heavy companies is expected to remain in single digits, which could cap gains in the coming months. According to most experts, the June quarter results may not push the market to fresh highs. Experts expect a significant recovery in earnings only from Q3 onwards, even though they highlight that Q1 results will be better than the previous quarter. "The market's move will depend on what kind of deal we get on tariffs. Q1 earnings are expected to be slightly better than Q4, so that may not trigger a broad-based excitement in the market," said Pankaj Pandey, the head of research at ICICI Securities. "We will see more of a stock-specific action. At this time, the market has limited triggers for a breakout. The range-bound trade may continue for some time. We can see significant earnings growth in the second half of the current financial year (H2FY26)," Pandey said. In the near term, with mild earnings growth, stock-specific action is likely to dominate rather than a broad-based market rally. Brokerage firm JM Financial expects Nifty Q1 PAT (profit after tax) to rise 10.4 per cent year-on-year (YoY), led by strong performance in oil and gas. Excluding BFSI, Q1 Nifty PAT is expected to rise at 14 per cent. "Weak BFSI performance can be attributed to moderating loan growth, NIM (net interest margin) compression of 30 bps YoY, weak fee income growth and elevated credit costs," JM Financial said. Barring short-term obstacles, experts say any correction in the market is an opportunity to buy because India's long-term story remains intact. "Most domestic macroeconomic indicators remain supportive. Low inflation, robust GDP growth, strong foreign exchange reserves, a surplus monsoon, and the prospect of RBI rate cuts all paint a favourable backdrop for the economy," said G. Chokkalingam, the founder and head of research at Equinomics Research Private Ltd. However, Chokkalingam added that a key near-term concern is the ongoing trade uncertainty between India and the US. Markets are closely watching for signs of a deal, and sentiment may remain cautious until there is clarity on that front. From an earnings perspective, Chokkalingam believes a meaningful recovery may still be one to two quarters away. "At the current pace of earnings growth, the Sensex could rise another 7–8 per cent during this fiscal year," he said. Amid expectations of moderate gains in the benchmarks, experts believe real opportunities are in the broader market. "With over 4,000 small- and mid-cap stocks, investors have a wide universe to explore compelling opportunities—whether it's unique growth stories, deep-value plays, or acquisition candidates," said Chokkalingam. "The rise in India's retail investor base is also encouraging: more than 22 crore investors are now registered, with nearly six lakh new investors joining every week. This expanding participation bodes well for sustained interest in mid- and small-cap stocks," Chokkalingam added. Chokkalingam suggests investors may consider allocating at least 30 per cent of their equity portfolio to large-cap stocks like those in the Sensex and Nifty, while 60–70 per cent can be exposed to mid- and small-caps, depending on individual risk appetite for the next two quarters. Read all market-related news here Read more stories by Nishant Kumar Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
Economic Times
5 hours ago
- Business
- Economic Times
Trade TCS ahead of Q1 results with Short Iron Butterfly strategy to gain advantage of Theta decay
Tata Consultancy Services shares are experiencing a short buildup. The medium-term trend is sideways to negative. ICICI Securities suggests a Short Iron Butterfly strategy. A positive result could trigger short covering, potentially reaching Rs 3,600. Negative results may add pressure. Support lies in the Rs 3,200-3,250 range. The short-term range for July is Rs 3,200 to Rs 3,700. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Below is the payoff graph of the strategy: The shares of Tata Consultancy Services (TCS) have witnessed a short buildup in the futures segment, and the overall medium-term trend so far has been sideways to negative.'The upward momentum in the stock can be triggered due to a positive outcome from the result, as that can lead to short covering, which eventually will get the stock to its recent swing high of Rs 3,600 or beyond that,' said Jay Thakkar, Vice President & Head of Derivatives and Quant Research at ICICI case the result is negative or below expectations, Thakkar believes that there can be additional shorts, which will add pressure on the most of it seems to be priced in the stock in the previous fall.'Therefore, in case of muted results or guidance, the stock can trade with a sideways to negative bias wherein the support on the lower side is in the range of 3200-3250 levels,' Thakkar on the above analysis, Thakkar noted the short-term range for the July series as Rs 3,200 to Rs 3,700. Currently, the stock is placed in the middle of the range at around Rs 3,400 the upside, the Rs 3,500 strike has the highest call OI, indicating that the market participants are not expecting more upside. Therefore, only above Rs 3,500, one can expect the stock to continue its short-term IVs are at 23.40 levels with IVP of 79 and IVR of 42, indicating that the market move can be quite within a Jay Thakkar suggests deploying a Short Iron Butterfly strategy , which has a limited gain and limited case the stock doesn't react to the result, there is a high probability of theta decay , which will make the strategy Iron ButterflyIn a short straddle, the trader sells a call and a put at the same strike price to receive the premiums on both the short call and short put positions. We deploy this strategy when we expect the underlying to consolidate in a range before taking any further direction. Straddle selling is usually advised for expert traders and for conservative traders, it is best to buy hedges for protection, thus converting the straddle into an Iron Thakkar noted that the total Inflow in this strategy is 90.05 points, which is the maximum gain, whereas the max loss will be of 29.95 risk-reward ratio is 1:3, which is quite the stock trades within the range of Rs 3,470 to Rs 3,290, then the strategy will be profitable and beyond that the loss is limited up to 29.95 points.(Source: ICICI Securities): Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
Time of India
5 hours ago
- Business
- Time of India
Trade TCS ahead of Q1 results with Short Iron Butterfly strategy to gain advantage of Theta decay
Tata Consultancy Services shares are experiencing a short buildup. The medium-term trend is sideways to negative. ICICI Securities suggests a Short Iron Butterfly strategy. A positive result could trigger short covering, potentially reaching Rs 3,600. Negative results may add pressure. Support lies in the Rs 3,200-3,250 range. The short-term range for July is Rs 3,200 to Rs 3,700. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Below is the payoff graph of the strategy: The shares of Tata Consultancy Services (TCS) have witnessed a short buildup in the futures segment, and the overall medium-term trend so far has been sideways to negative.'The upward momentum in the stock can be triggered due to a positive outcome from the result, as that can lead to short covering, which eventually will get the stock to its recent swing high of Rs 3,600 or beyond that,' said Jay Thakkar, Vice President & Head of Derivatives and Quant Research at ICICI case the result is negative or below expectations, Thakkar believes that there can be additional shorts, which will add pressure on the most of it seems to be priced in the stock in the previous fall.'Therefore, in case of muted results or guidance, the stock can trade with a sideways to negative bias wherein the support on the lower side is in the range of 3200-3250 levels,' Thakkar on the above analysis, Thakkar noted the short-term range for the July series as Rs 3,200 to Rs 3,700. Currently, the stock is placed in the middle of the range at around Rs 3,400 the upside, the Rs 3,500 strike has the highest call OI, indicating that the market participants are not expecting more upside. Therefore, only above Rs 3,500, one can expect the stock to continue its short-term IVs are at 23.40 levels with IVP of 79 and IVR of 42, indicating that the market move can be quite within a Jay Thakkar suggests deploying a Short Iron Butterfly strategy , which has a limited gain and limited case the stock doesn't react to the result, there is a high probability of theta decay , which will make the strategy Iron ButterflyIn a short straddle, the trader sells a call and a put at the same strike price to receive the premiums on both the short call and short put positions. We deploy this strategy when we expect the underlying to consolidate in a range before taking any further direction. Straddle selling is usually advised for expert traders and for conservative traders, it is best to buy hedges for protection, thus converting the straddle into an Iron Thakkar noted that the total Inflow in this strategy is 90.05 points, which is the maximum gain, whereas the max loss will be of 29.95 risk-reward ratio is 1:3, which is quite the stock trades within the range of Rs 3,470 to Rs 3,290, then the strategy will be profitable and beyond that the loss is limited up to 29.95 points.(Source: ICICI Securities): Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
Time of India
a day ago
- Business
- Time of India
Swiggy shares rebound 28% from 52-week low ahead of Q1 earnings. What analysts say?
Swiggy shares have staged a sharp rebound ahead of the Q1FY26 earnings season, rallying 27.9% from their all-time low of Rs 297 recorded on May 13 on the NSE. The stock has gained investor traction in recent weeks. This may be fueled by expectations of strong revenue growth in its core food delivery business and improved performance in its quick commerce vertical, Instamart. Domestic brokerage firm Kotak Institutional Equities has downgraded the stock to an 'ADD' rating and raised its sum-of-the-parts-based fair value estimate to Rs 420 from Rs 415 earlier. However, it also noted that the stock is up by 25% from its May bottom and flagged this as a reason for its rating downgrade. 'The recent stock price increase results in a downgrade in rating to ADD,' the brokerage said. For Q1FY26, Kotak expects Swiggy to report a 19% year-on-year growth in food delivery gross merchandise value (GMV), outpacing Zomato's estimated 18% GMV growth for the same period. Swiggy's food delivery GMV is projected at Rs 81 billion, supported by a stable take-rate and steady demand trends. However, it expects a sequential contribution margin (CM) decline of 30 basis points to 7.5%, driven by increased restaurant commissions, higher platform fees, and elevated delivery costs due to the onset of the monsoon. While food delivery remains stable, Instamart's performance continues to weigh on profitability. Kotak estimates Instamart's GMV to rise 113% year-on-year, with revenue growth of 129% year-on-year. Also read: Jane Street shows dangers of finance as shampoo Despite this surge, Instamart is expected to report a contribution margin of -3.4% and an adjusted EBITDA loss of Rs 8.5 billion for the quarter, broadly in line with the Rs 8.4 billion loss recorded in Q4FY25. The brokerage noted, 'We expect Instamart to show meaningful improvement in EBITDA only in FY2027,' adding that FY2026 will likely be a year of 'depressed profitability for Instamart on account of steep store additions and high competitive intensity.' Another brokerage firm, ICICI Securities, has also highlighted similar trends, projecting food delivery GMV growth of 18.5% year-on-year and 9.8% quarter-on-quarter for Q1FY26, with an adjusted EBITDA of Rs 2.2 billion and EBITDA margin of 2.7% of GOV. For Instamart, it expects GMV to increase 110.1% year-on-year and 22.6% sequentially, but pegs adjusted EBITDA loss at Rs 9.1 billion with a negative margin of 15.8%. Overall, the brokerage expects adjusted revenue to grow 8% quarter-on-quarter and 46.6% year-on-year, with adjusted EBITDA loss widening to Rs 7.9 billion from Rs 7.3 billion in Q4FY25 and Rs 3.5 billion in Q1FY25. ICICI Securities also noted that 'Swiggy should marginally gain share in food delivery business,' and observed that e-commerce volume growth is accelerating from the company's lows of FY24/25. 'We remain bullish on Swiggy,' added ICICI Securities. On the technical front, Ajit Mishra, SVP of Research at Religare Broking, noted, 'Swiggy has been witnessing a rebound after spending nearly six months in a corrective phase.' He added that following a breakout in June, the stock faced resistance near the Rs 395 level and is currently trading close to its neckline support. Also read: Vedanta shares down 2% in 1 year but giving 7% dividend. Is it enough to buy the stock? 'It is crucial for the stock to hold the Rs 350–370 zone to maintain a positive bias, while the Rs 410–440 zone is expected to act as resistance. Participants should align their positions accordingly,' Mishra said. ( Disclaimer : Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
Economic Times
2 days ago
- Business
- Economic Times
Textile stocks rally after US hikes tariffs on Bangladesh garments
Mumbai: Textile stocks jumped up to 9% on Tuesday after US President Donald Trump imposed 35% tariffs on garment imports from Bangladesh - one of the biggest exporters of garments to the US - effective from August 1. The move spurred optimism in Indian textile stocks, in anticipation that lower tariffs on Indian exports could lead to better prospects for these companies. ADVERTISEMENT Analysts said a trade deal between India and the US could lead to lower tariffs, which may improve business for textile companies. "The imposition of a higher rate of tariffs on key garment exporters like Bangladesh puts Indian textile exporters in a favourable position," said Kaustubh Pawaskar, VP - lead analyst (consumption), ICICI Securities (retail). "Any positive development in the India-US trade deal could result in further gains." However, until the uncertainty over the deal persists, near-term volatility cannot be ruled out. The stocks gave up some of the gains but still closed higher on Tuesday. Raymond Lifestyle gained 5%, while KPR Mills and Trident advanced 3.6% and 3.3%, respectively. Gokaldas Exports and Garware Technical Fibres rose 2.7% and 2.1%, respectively, while Welspun Living moved 0.6% higher. "The 35% tariffs on Bangladesh and 36% on Cambodia and 40% on Myanmar-major textile exporting nations - may be favourable for India, as the expected trade deal between the US and India may include a lower tariff rate for India, which prompted the buying interest in textile stocks today," said Prerna Jhunjhunwala, VP, equity research - textile and retail, Elara Capital. ADVERTISEMENT Jhunjhunwala said valuations are factoring in structural opportunities from the US Free Trade Agreement, the India-US trade deal, and a potential deal between the EU and India, but near-term uncertainty is expected to persist."With Bangladesh's key exports - woven apparel ($4.78B) and knitwear ($2.63B) - now costlier, India's own exports in knit & woven garments ($2.55B each) and home textiles ($2.21B) are set to gain share," said Dharan Shah, Founder, - an investment platform. "Gokaldas Exports, Vardhman Textiles, and KPR Mills are best positioned to benefit from this sourcing shift, especially in high-demand US apparel segments," he said. (You can now subscribe to our ETMarkets WhatsApp channel)
