Tag Manish Chowdhury

1) Yuvraj A. Thakker, Managing Director, StoxBox

Union Budget 2024-25 marks a transformative phase for the stock market, with a strong focus on infrastructure and defense spending. The increased allocation for infrastructure projects is expected to stimulate economic growth, enhance connectivity, and drive significant investments in related sectors. Similarly, the heightened defense budget reflects a commitment to national security while opening avenues for defense-related industries. These strategic investments are poised to boost market confidence, attract capital inflows, and generate new opportunities across various sectors. Overall, the budget’s emphasis on infrastructure and defence is set to create a favourable environment for sustained market growth and investment.”

2) Manish Chowdhury, Head of Research, StoxBox

– The key highlight of the budget is the fine balance between fiscal prudence and welfare schemes, with a special focus on Bihar and Andhra Pradesh. With most pointers in line with the interim budget, the key takeaway is the downward revision to the FY25 fiscal deficit figure to 4.9% and an increase in capital gains tax. Though there is a tinge of populist measures on expected lines, the government remains focused on job creation, infrastructure development, strengthening the ecosystem for manufacturing, renewable energy, and new sectors, and creating disposable income in the hands of people with a key focus on rural. Though we do not rule out some kneejerk reaction in equity markets, the long-term trajectory and the intention of the government looks pro-economy and adding wings to move the economy towards the USD 5 trillion mark in the near term.

3) Bhavik Thakkar, CEO, Abans Investment Managers Pvt Ltd

– The budget’s primary focus seems to be on employment and job creation which reflects in (a) Employment Linked Incentives which will benefit 82 lac people across 3 initiatives (b) Skilling-related financial support for Skilling Loan of upto ₹7.5 lacs and subvention of 3% interest for education loans (c) Top 500 companies can provide 1-year internships where the government will support almost 90% of compensation and even 10% can be funded through companies’ CSR obligation… this means additional man power resources will be available without significant cost burden.

Infrastructure:

– Before the budget, there was high expectations that the government will increase infrastructure allocation from the interim budget announced amount of ₹11.1 lac cr to higher value given the exceptional dividend received from RBI and robust tax collection but against that government has kept the allocation same which is 11% growth over FY24 allocation and in line with nominal GDP growth rate. One of the reason could be extra allocation to infrastructure may result into continued higher-than-expected inflation which will reduce RBI’s ability to reduce interest rates. The announcement in today’s budget is more focused on DBT (Direct Benefit Transfer) to beneficiaries rather than spending to increase the velocity of demand.

4) Dr. Mayank Joshipura, Ph.D.|Vice Dean, Research & Ph.D., Professor-Finance|School of Business Management, NMIMS, Mumbai

– The Modi 3.0 government’s first budget headline is the target fiscal deficit of 4.9% for 2024-25, which shows unwavering commitment toward budgetary deficit. The increase in STCG and LTCG tax and STT on F&O is a dampener for the stock markets and might spook the market, but an increase in the exemption limit from the current Rs. 1L to Rs. 1.25L will help retail investors and encourage long-term investing. Increasing the standard deduction and revising new personal taxation rates is a significant relief for individuals. Overall, the budget is balanced, focusing on critical areas such as MSME, employment, affordable housing, skill building, ease of doing business, and energy transition without losing focus on infrastructure development and fiscal discipline. The compulsions of coalition politics are visible regarding announcements focused on specific states. The digitalization of land records is a significant step forward in the direction of land records.

5) Vaibhav Shah, Fund Manager, Torus Oro PMS

– Post Economic Survey released yesterday with a specific mention of the rise in speculation and capital market activity, there was nervousness among players that capital gains may be rejigged. The latest annoucement with respect to the increase of capital gains rate is negative as it has caught everyone by surprise. Also from a stable regime now we are witnessing changes to the regime which raises further doubts on the continuity of the rate regime

15/07/2024- LTI Mindtree is projected to experience a marginal revenue increase in Q1FY25 in constant currency terms, driven by broad-based growth across various verticals. The BFSI segment is anticipated to recover, benefitting from the absence of project cancellations that occurred last quarter.

Key factors to monitor include the demand outlook for the BFSI sector, signs of recovery in discretionary spending, progress in merger synergies, elevated senior management attrition in recent quarters, and the visibility of deal ramp-ups.

Comments

Manish Chowdhury, Head of Research, StoxBox

“LTI Mindtree revenue may see a marginal increase in revenue in Q1FY25 in cc terms. We expect broad-based growth across verticals. The BFSI segment should recover due to the absence of project cancellations last quarter. We expect modest margin expansion with bench build-up, investments in sales, deal transition costs and visa costs consuming most of the incremental profitability. Furthermore, management commentary on the demand outlook for BFSI, indications of recovery in discretionary spending, merger synergies progress, elevated senior management attrition in recent quarters, and deal ramp-up visibility would be key things to watch out for.”

12/07/2024- Tata Consultancy Services (TCS), India’s largest software services exporter, has reported a notable increase in net profit for the first quarter of the financial year 2024-2025. The company’s net profit rose by 9 per cent, reaching Rs 12,040 crore, up from Rs 11,074 crore in the same period last year.

Revenue from operations saw a 5 per cent increase, amounting to Rs 62,613 crore for the June quarter, compared to Rs 59,381 crore in the corresponding quarter of the previous fiscal year.

Comment

Manish Chowdhury, Head of Research, StoxBox

“TCS’ Q1FY25 result gave a mild surprise on the upside as sequential CC revenue growth of 2.2% reflected an improving business environment in the US. Large deals made in the last year seem to be getting converted into revenue along with the ramp-up of the BSNL deal. The lowering attrition and the net headcount addition is a major positive and augurs well for the company’s utilization levels and subsequently its EBIT margin. Despite wage hikes in the quarter TCS managed to report a beat on EBIT margin estimates. These positives are bound to lead to an upward revision in EPS estimates but not so much on the revenue side. Key moniterables going forward are 1) updates on the BSNL deal ramp-up; 2) medium-term industry demand trends and impact of macro headwinds on demand; 3) deal wins and deal pipeline; 4) revenue growth and margin outlook for FY25; 5) investments in GenAI partnerships.

Tata Consultancy Services Ltd. (TCS) Q1FY25 Result First Cut – Beat on all fronts, Lowering attrition and net headcount addition augurs well for margins Revenue rose 2.2% QoQ / 5.8% YoY in rupee terms to Rs. 62,613 crores, beating market estimates of Rs. 62,128 crores. This growth can be attributed to a strong rise in India revenue (up 61.8% YoY), BSNL deal ramp-up, and longer working days during the quarter.

• The EBIT margin came in at 24.7% (down 134 bps QoQ /up 146 bps YoY), beating street estimates of 24.5%, aided by higher utilization and a softer impact from the annual wage hikes. EBIT was down 3% QoQ and up 12.5% YoY to Rs. 15,442 crores, surpassing market expectations of Rs. 15,246 crores.
• Net income stood at Rs. 12,105 crores (down 3.2% QoQ /up 5.8% YoY), crossing market estimates of Rs. 11,959 crores. The PAT margin came at 19.3% (down 108 bps QoQ).
• LTM attrition trended downwards to 12.1% in Q1FY25 compared to 12.5% in Q4FY24, complemented by a net headcount addition of 5,452 employees.
• The board of directors has recommended an interim dividend of Rs. 10 per equity share. The record date for the dividend is 20 July 2024.
• Net cash from operations at Rs 11,168 which is 92.8% of net profit.
• TCS reported a workforce of 606,998 employees as on June 30, 2024.”