Sustained selling pressure by foreign institutional investors FIIs due to a slowdown in the US and Europe, and worries over rising interest rates dragged 11 Nifty stocks down by over 20 per cent from their 52 week highs. A fall of 20 per cent or more by a stock or index from its recent high is considered a bear grip.
The forthcoming quarterly results will pave the way for the domestic equity market going ahead. On January 6, it was 90 against its 52 week high of Rs 4,045. On January 7, 2022, another IT major Wipro fell 47 per cent from its 52 week high of 721.55 to 382.50. Infosys fell 44 per cent, and HCL Technologies 24 per cent were among the other major losers from the IT space.
HDFC Securities said the IT sector is expected to post a soft quarter, impacted by Q 3 seasonality and worsening macro. Even though long-term drivers are unchanged, growth has moved towards pre-Covid due to the elements of macro volatility.
The current market price is up 10 per cent as the brokerage has an add rating for Tata Consultancy Services with a target price of Rs 3,545.
HDFC Securities is bullish on Infosys target price: Rs 1,815 HCL Technologies target price: Rs 1,090 Wipro target price: Rs 430 and Tech Mahindra target price: Rs 1,150 In the IT space, market participants should zero in on the commentary and progression on client budgets, as well as commentary on the pipeline, bookings trajectory, and hiring intensity. HCL Technologies and Infosys will announce their Q 3 results on January 12, while Wipro will report its earnings on January 13.
Aluminum major Hindalco Industries is another major loser on the list. The company's shares fell 27 per cent to Rs 463.95 on January 5 against its 52 week high of Rs 636 on March 29, 2022.
Tata Motors, Divi s Laboratories, Oil and Natural Gas Corporation, Bajaj Finance and Bajaj Finserv have also declined somewhere between 23 per cent and 28 per cent from their 52 week highs.
Expectations that Tata Motors may report a narrowing of losses in the December quarter, while Maruti Suzuki and Mahindra Mahindra M&M may post strong bottom-line growth in the quarter gone by.
Prabhudas Lilladher, a stockbroking company, has a target of Rs 520 on Tata Motors, Rs 10,000 on Maruti Suzuki and Rs 1,560 on M&M for now. The premium trend will continue to play out across segments, according to the company.
On January 25th, Tata Motors is set to announce its Q 3 FY 23 results. Prabhudas Lilladher said that JLR volumes will grow in mid-single digits and that the service of an order book and semiconductor supply will improve.
Prabhudas Lilladher said that NBFCs reported mixed earnings in Q 3 due to strong AUM growth of around 4.25 per cent and slight margins due to rising costs of funds. We expect NBFCs to report margins of around 10.19 per cent against 10.20 per cent in Q 2 as strong disbursements and yield transmission cushions rising costs of funds. Prabhudas Lilladher prefers Bajaj Finance with a target price of Rs 8,953 in the NBFC space. The company also likes the Cholamandalam Investment Finance Corporation target price: Rs 792 and Manappuram Finance target price: Rs 144 in the broader space.
The BSE Sensex and NSE Nifty barometer indices fell by 5 per cent from their 52 week highs.