Kotak Mahindra Bank likely to post robust profit growth in Q1, asset quality to be stable

Kotak Bank has maintained its asset quality at a pristine 2 percent level (gross non-performing assets).

Kotak Mahindra Bank, country's third largest private sector lender by market capitalisation, is expected to report healthy year-on-year growth in profit and net interest income, with stable asset quality on sequentially in Q1.

Profit growth in Q1 could be up to 40 percent on fall in provisions, and net interest income over 20 percent compared to a year-ago with stable NIM and strong loan growth.

"Most metrics like business growth, CASA, NIMs and earnings will be strong, while we also don't see major hiccups in asset quality with credit cost close to 50-55bps," said Prabhudas Lilladher that expects 35 growth in profit and 22 percent in net interest income for the quarter YoY.

The brokerage expects gross non-performing assets at around 2.16 percent in Q1FY20 against 2.14 percent in Q4FY19 and 2.17 percent in Q1FY19.

Kotak Bank has maintained its asset quality at 2 percent level (gross non-performing assets).

Motilal Oswal expects the bank to report loan growth of around 22 percent YoY and deposit growth of around 19 percent YoY in Q1FY20. It said margins are likely to remain at around 4.4 percent in June quarter against 4.48 percent in the previous quarter and 4.3 percent year-ago.

CASA retention would be a key driver of NII and NIM, the brokerage said, adding with strong digital initiatives and fast-paced customer acquisition, fee income would be a key growth driver for the bank.

Motilal Oswal, which expects 33 percent growth in profit YoY, further said it factored in other income growth of around 8 percent in Q1FY20, driven mostly by healthy fee traction and expects the trend to continue.

Most brokerages expect pre-provision operating profit growth could be over 15 percent YoY.

Key issues to watch out for would be guidance on balance sheet growth, CASA and fee income growth; trend in customer acquisition post the Aadhaar verdict; GNPAs in the MSME segment; and update on the stake reduction.

MORE WILL UPDATE SOON!!

Rupee extends losses, trades lower at 68.99 per dollar

On July 19 the Indian rupee ended 17 paise higher at 68.80 against the US dollar as market participants pinned their hopes on an aggressive rate cut by the US Federal Reserve later this month.

The Indian rupee has extended the morning losses and trading lower by 19 paise at 68.99 per dollar versus Friday's close 68.80.

On July 19 the Indian rupee ended 17 paise higher at 68.80 against the US dollar as market participants pinned their hopes on an aggressive rate cut by the US Federal Reserve later this month.

MORE WILL UPDATE SOON!!

Stock picks of the day: Grasim, Adani Ports & Bajaj Finance top shorting ideas

If Nifty trades below 11,485 levels then we may see some profit booking initiating in the market, which may correct up to 11,330-11,245-11,090 levels.

 

The Nifty started the week on a flat note and extended positive momentum in the initial half, but selling pressure at higher levels dragged the index towards the lower to end the week on a negative note. The Nifty closed at 11,419 with a loss of 133 points for the week ended July 19.

On the weekly chart, the index has formed a bearish candle forming lower High-Low compared to the previous week indicating negative bias. On the daily chart, Nifty has decisively broken down its past eight sessions Up-sloping Trendline support on a closing basis which signals further weakness.

The chart pattern suggests that if Nifty crosses and sustains above 11,500 levels then it could upward momentum which would take the index towards 11,580-11,700.

However, if the index breaks below 11,400 levels it would witness selling which would take the index towards 11,320-11,260. The Nifty is trading below 20, 50 and 100-day SMA's which are important short term moving average, indicating negative bias in the short term.

The Nifty continues to remain in a downtrend in the short term, so buying near to major supports on dips continues to be our preferred strategy. For the week, we expect Nifty to trade in the range of 11,550-11,270 with a negative bias.

The trend deciding level is 11,485. If NIFTY trades above this level then we may witness a further rally up to 11,575-11,725-11,815 levels.

However, if Nifty trades below 11,485 levels then we may see some profit booking initiating in the market, which may correct up to 11,330-11,245-11,090 levels.

Here is a list of top three stocks which could give 4-7 percent return in the next three-four weeks:

Grasim Industries (Aug Fut): Sell| selling range: Rs 888-900| LTP: Rs 881.30| Target: Rs 855-840| Stop Loss: Rs 911| Downside 4-6 percent

On the daily chart stock, the price has decisively broken down from its Horizontal Channel levels of 950-885 on a closing basis and is also sustaining below the same.

This breakdown is accompanied with an increase in volumes which supports bearish sentiments ahead. The daily strength indicator RSI and the momentum indicator Stochastic both are in negative territory which supports downside momentum to continue in the near term.

The stock price has broken its 20 and 50-day SMA which supports bearish sentiments ahead.

Adani Ports (Aug Fut): Sell| Selling Range: Rs 410-418| LTP: Rs 408| Target: Rs 395-387| Stop Loss: Rs 423| Downside 5-7 percent

On the daily chart, the stock price has again failed to cross its resistance zone and witnessed selling pressure at higher levels.

This breakdown is accompanied with an increase in volumes which supports bearish sentiments ahead.

The daily strength indicator RSI and the momentum indicator Stochastic both have turned negative which supports downside momentum to continue in the near term.

The stock price has broken its 20 and 50 day SMA which supports bearish sentiments ahead.

Bajaj Finance (Aug Fut): Sell| Selling Range: Rs 3,380-3,420|LTP: Rs 3,346.60| Target: Rs 3,260-3,180| Stop Loss: Rs 3,500| Downside 4-6 percent

On the daily chart, the stock price has decisively broken down from its Upsloping Trendline levels of Rs 3,475-3,480 levels on a closing basis and sustaining below the same.

This breakdown is accompanied with an increase in volumes which supports bearish sentiments ahead. The weekly strength indicator RSI and the momentum indicator Stochastic both are in negative territory which supports downside momentum to continue in the near-term.

The stock price is sustaining well below its 20 and 50-day SMA which supports bearish sentiments ahead.

MORE WILL UPDATE SOON!!

Two-thirds Nifty stocks trade at 10-70% discount to their 52-wk highs; should you buy?

Sensex stocks are also following a similar trend and 18 of them are trading at 10-70 percent lower than their respective 52-week highs.

Over two-thirds of Nifty stocks are trading at a double-digit discount to their respective 52-week highs, which has also pulled the index 5 percent lower in June-July.

These 34 stocks include Cipla, Titan, ONGC, Hero MotoCorp, ZEE Entertainment, Sun Pharma, JSW Steel, M&M, Maruti Suzuki and YES Bank, among others.

Sensex stocks are also following a similar trend and 18 of them are trading at 10-70 percent discount to their 52-week high.

Experts suggest investors wait for the cues rather buying due to attractive valuations. “Nifty has time and again disappointed the Street and the macros are also not lifting the sentiment either. In the midst of so much negativity, it is best to wait rather than jump into any stock.

There is still room for further decline. "Investors should look at the return on equity, free cash flows, exposure to debt, promoter pledge, operating efficiency, and other fundamental factors before catching a falling knife,” he added.

Table: Top 20 stocks based on returns that have fallen 10-70 percent from their respective 52-week highs.

The situation in the broader market is not encouraging either. 56 stocks in the top 500 on the NSE are trading at a discount of 50-90 percent from their respective 52-week highs.

They include SREI Infra, Jain Irrigation, Central Bank, Infibeam, HEG, Graphite India, Reliance Capital, Jet Airways, DHFL, Reliance Communications and Cox & Kings Ltd, among others.

These stocks though have fallen far from their respective highs and look reasonably valued, but unlikely to see a reversal soon, suggest experts. Hence, long term investors should stay away.

Table: Top 20 of NSE500 stocks that have fallen the most from their 52-week highs. 

The underperformance in the broader market is mainly a result of weak domestic sentiments and muted earnings expectations for Q1FY20.

Investors generally prefer investing in stable markets. Political uncertainty, unexciting earnings growth dampen their sentiments and keep them away from the markets.

In volatile markets, investors should avoid catching the falling knife and rather focus on fundamentally sound stocks with strong corporate governance, healthy balance sheet, comfortable valuations and good growth prospects.

MORE WILL UPDATE SOON!!

Market Live: Indices recover with Nifty around 11,350, Sensex falls 250 pts; Yes Bank rises 7%

Among the sectors, except metal all other indices are trading lower led by bank, pharma, infra, FMCG and IT.

Rupee Update: The Indian rupee has extended the morning losses and trading lower by 19 paise at 68.99 per dollar versus Friday's close 68.80.

Lupin’s Nagpur facility wins ENR global best project award: Lupin has won the Engineering NewsRecord’s (ENR) Global Best Project Award of Merit in the Manufacturing category. The award was given to Lupin’s Oral Solid Dosage (OSD) and Injectable Pharmaceutical Manufacturing Facility at Nagpur, India.

• Brokerages bullish on Dabur after strong Q1 growth
• Shares of Dabur India gained nearly 2 percent intraday as global brokerages remained bullish on the stock, citing strong earnings growth though management commentary was cautious about demand outlook ahead.

  The brokerages expect the stock to return 10-22 percent over a period of one year.

Nifty Around 11,350:

Benchmark indices extended losses for third consecutive session with the Sensex falling 273.84 points to 38,063.17 and the Nifty declining 70.30 points to 11,349 amid asset quality concerns.

More than two shares declined for every share rising on the BSE.

Results Today

Kotak Mahindra Bank, United Spirits, Lakshmi Machine Works, Dewan Housing Finance Corporation, Oriental Bank of Commerce, Can Fin Homes, Hindustan Media Ventures, TVS Motor Company, Aptech, ICICI Securities, Just Dial, GlaxoSmithKline Pharmaceuticals, Just Dial, Wendt (India), Cupid, Mastek, Coromandel International, Allsec Technologies and Srikalahasthi Pipes will announce their June quarter earnings today.

HDFC Bank Falls Nearly 3%

Brokerages retained their positive stance on the stock on strong operating performance and expect stock to return 14-16 percent over a period of one year, but they concerned about moderation in loan growth (due to slowdown in auto & retail segment) and hike in provisions related unsecured book & NBFC/HFC accounts.

MORE WILL UPDATE SOON!!

IndianMarketPulse-The startup ----Coming Soon

IndianMarketPulse-The startup ----Coming Soon

People have been wondering where the author of this blog has disappeared.I Apologize to all our esteemed viewers for being busy as was I was in the process of opening a startup and was planning to do the same with the blessings of the viewers and was in the process of evaluation and processing of the team.I Should be starting a startup and here is a glimpse of what we aspire to provide in terms of research and how we want to differentiate our self from others.

I am Doing this alone and I hope I will get support of my blogging family to achieve my aim of startup.

Here is a little glimpse of what we are aspiring to do and a little information about myself.

About Me

My Name is Arun Singh and I have started IndianMarketPulse blog keeping in mind that people with limited  capital market knowledge needs to be updates about the stock market  and since money is involved in trading and investment ,people needs to be updated on real time basis about the changing financial and economic environment around the world which have a direct impact on our investment as well as trading position.My aim is to provide technical analysis i.e chart analysis  and fundamental analysis to all our viewers who are seeking quality research and for this purpose I have made the blog IndianMarketPulse.I would also be providing investment tips to all our viewers based on sound and quality research on daily basis so that our viewers do not have to go for ultra high paid services to have the same research.Our Endeavour is to make research more affordable for those seeking help in investing and trading in capital market research.

I am a Former Senior Technical & Derivative Research Analyst with rich  experience in the capital market research filed across various financial instruments .My Last Designation was at  research firm namely IndiaMarketView.I Am a CRISIL Approved Certified Financial Research Analyst and also a legally certified Research Analyst as per the SEBI (Security & Exchange Board of India) and completed all the relevant certifications as per directive of SEBI and fully capable to do the above mentioned research.I also have a MBA degree in Marketing and Finance as major from Amity University Rajasthan. For any market related query viewers may feel free to contact me and ask any query and I will be most highly obliged to solve it and I will give my best to reply you with the appropriate answer.

I also have a mechanical & Automation degree from Amity Institute of Engineering and technology.Below are few of my certifications as follows:

NISM -Series XV: Research Analyst Certification Examination -(SEBI Approved)

NISM-Series X-A:Investment Advisor (Level 1) Certification Examination-(SEBI Approved)

NISM-Series X-B:Investment Advisor (Level 2) Certification Examination-(SEBI Approved)

NISM-Series XII: Securities  Market Foundation Certificate Examination-(SEBI Approved)

NISM-Series-V-A: Mutual Fund Distributors Certification Examination(SEBI approved)

Certified Financial Research Analyst(CFRA) from Magnum Educorporates Institute-(CRISIL Approved)

Since I Have Cleared NISM Mutual Fund Certifications laid down by SEBI ,I am also a certified Mutual Fund Distributor my AMFI Registeration No is as follow.

ARN-135186 and EUIN - E226370

Whats app no:91+7568143768

My Personal Email is arun1991s@gmail.com

IndianMarketPulse Email:-indianmarketpulse@gmail.com

IndianMarketPulse:The Startup

Looking at the success of my blog indianmarketpulse ,I have decided to go for a stratup under the same name and make a name for myself in the field of capital market research.IndianMarketPulse is a startup with objective of growth of our clients as well as empoyees in synchronization by following moto of Truth ,honesty quality research and abve all respect to all.

As we continue to grow in our endeavours towards a startup, IndianMarketPulse has adopted a set of statements that represent our Mission, Vision, and Values. These are more than simply words on a page; they are how I believe business should be done.

OUR MISSION STATEMENT

“To Become and Remain Our Client’s Most Trusted Advisor”

Our mission is what we seek to accomplish every day.

OUR VISION STATEMENT

“To Be Recognized for Delivering a Superior Combination of Successful Investment Solutions and Exceptional Customer Service”

Our vision reminds us that Clients do business where they are welcome and stay where they are appreciated.

OUR VALUES

Respect for our Clients

Integrity in Both Thought and Action

Teamwork Supported by Sound Investment Strategies

Strong Commitment to Excellence

Our values represent the core of our beliefs in terms of how we want to operate.

What We Do:

IndianMarketPulse startup will provide Service/expertise in research to clients in the following ways.

In Equity Segment

-Providing equity Stock ( cash/Future/Option ) trading calls on intraday as well as positional  basis.

-Providing equity Index ( Future/Option ) trading calls on intraday as well as positional  basis.

-Providing equity Stock BTST/STBT ( cash/Future/Option ) trading calls on intraday basis.

-Providing equity Index BTST/STBT ( Future/Option ) trading calls on intraday basis.

In MCX Segment

-Providing Bullion (Gold & Silver) Trading calls on intraday as well as positional basis.

-Providing Base Metal (Lead,Zinc,Nickel,Aliminium,Copper) Trading calls on intraday as well as positional basis.

-Providing Energy (Crude,Natural Gas) trading calls on intraday as well a positional basis.

-Providing Bullion Trading calls on intraday as well as positional basis.

In Currency Segment

-Providing  trading calls in all major currency pairs and dollar index on intraday and positional basis.

In Research Report Segment

-Providing Equity Research Report

-Providing Bullion Research Report

-Providing Commodity Research Report

-Providing Energy Report

-Providing stock Research Report

Multibagger Stock  Research

-Providing Multibagger Stock Report with 5 Stocks

-Providing Multibagger Stock Report with 10 Stocks

-Providing Multibagger Stock Report with 15 Stocks

Note:All Above research in given segments will be available to clients and they may chose it in the form of packages or in combination of packages in a way that chooses their investment need or trading requirement.Clients may get further benefits if they choose combination of packages.

What clients get on buying packages:

Apart from chosen service package clients will get:

-Unlimited access to research team which will solve their queries on real time basis regarding personal trading positions in market in any segment.

-Daily ,Weekly and Monthly research reports with quality technical and fundamental insights which will help make investors make more informed decisions while making positions in market or investing.

- Free Investing ideas and trades from our blog.

-Access to blog for real time analysis and market insights.

-Free Mutual Fund investment Advisory from SEBI registered and AMFI  Registered Analysts.

-Availability of service at all platform like Whatsapp,Messenger,Hangout,Telegram,Instagram,Email,Phone SMS etc.

-A dedicated representative for the client for faster service.

MORE WILL UPDATE SOON!!

Why Q3 earnings will be keenly watched by D-Street

We have quarterly earnings around the corner which will further decide the market direction and we expect companies to deliver robust number.

   

The Indian equity market emerged as one of the best performers globally in 2018 in the wake of resilient macroeconomic factors despite heavy volatility. The Nifty index delivered a positive return compared to a negative return by major global indices.

With the controlled crude prices, strengthening rupee and positive macros India is likely to record even better economic performance during 2019. Also, with a major correction in international oil prices, trade and current account positions are likely to improve considerably.

However, we expect the market to remain volatile for the first half of the year driven by a series of global and local events like the US Fed’s rate action, the progress of US-China trade war, US' action against Iran’s oil exports and Central election.

Also, North Korean Kim Jong Un's warning to President Trump on taking a 'new path' in nuclear talks if the US didn’t relax economic sanctions adds up to the worry.

The auto sales number for December 2018 did not meet street expectations. Quarterly earnings that are around the corner and expected to be robust will chart the market direction.

Here are the stocks we are bullish on:

Asian Paints | Rating: Buy | Target: Rs 1,491

Asian Paints is India’s leading paint company and Asia’s third largest paint company, with a group turnover of ₹169 billion.

The company has to its credit a leadership position in its market, proven track record of adapting to changes in market conditions, professional management, history of innovative strategies in marketing, efficient manufacturing and logistics in place and prudent financial management.

In terms of growth, we continue to expect the Indian paints industry to grow at around 8-12 percent in the next few years and demand factors remain strong in terms of growth.

At CMP, We recommend a BUY on the stock with a target price of Rs 1,471 per share.

Indraprastha Gas | Rating: Buy | Target: Rs 319

The recent Supreme Court decision, which proposes that Indraprastha Gas buy Haryana City Gas Distribution will add to volumes and provide visibility for growth in the years ahead. Delhi’s green budget with plans to provide concession of 50 percent on the registrations of CNG cars will promote the cleaner fuel.

Environmental concerns in Delhi have brought to the fore the urgency of using cleaner fuels, which puts IGL in a sweet spot. IGL has a unique identity of a company with a rare mix of volume growth and strong margins, supported by relatively lower gas prices and supportive governmental initiatives.

We expect the volume growth momentum to continue for the company as State government will add 2,000 new buses in FY19, and expansion of its pipeline network in the new areas- Karnal, Rewari and part of Gurugram will add volumes from H2-FY19 onwards. We maintain our BUY rating on the stock with a target price of Rs 319 per share.

Hindustan Unilever | Rating: Buy | Target: Rs 2,250

Hindustan Unilever Limited (HUVR/HUL) is India’s largest fast-moving consumer goods (FMCG) company with a heritage of over 80 years.

With HUL being the largest FMCG Company with one of the largest footprints in terms of products and distribution network and its strategy to target volume growth primarily should drive healthy growth in medium term.

The company has also entered into health drinks segment with the proposed amalgamation of GSK Consumer business which we believe is value-neutral while earnings accretive for HUL at current ratio.

In terms of per capita, FMCG consumption India stands lowest within its developing country peers at just around US$29 as against Indonesia which amounts to almost double while China at four times India’s consumption.

For the H1-FY19, HUL has reported a growth of 11.2 percent in its revenues of which volume growth was around 11% for the period.

We expect HUL to grow at a CAGR of 13.5 percent in the next two years. We estimate the company to report revenues of Rs 401,280 million in FY-19E and Rs 457,561 million in FY-20.

MORE WILL UPDATE SOON!!

PSU banks look attractive after recent developments

All eyes would be on last budget of the current government to be presented before the general elections.

 

We expect volatility to remain in the market and street participants would now track global cues and Q3 earnings season. We believe Q2 earnings season has been mixed bag but Q3 can be much better. The monthly sales numbers of auto companies have been subdued in December 2018.

All eyes would be also on the last budget of the current government to be presented before the general elections. We do expect volatility as the central government may resort to populist measures to gain back popularity amongst the rural community especially farmers, after its loss in key states like Madhya Pradesh, Rajasthan and Chattisgarh.

The strategy at present should be to invest in a phased manner in companies which are not connected to any political party, have a robust business model, strong earnings and cash flow visibility, low debt and backed by quality management especially on the corporate governance front.

Considering the above factors, investors can have a stock specific approach in midcaps and smallcaps as there are many companies which are trading at a discount of 50-70 percent to their peak price in early 2018. We believe the falling crude oil prices will benefit paint companies. On the other hand, there would be significant inventory losses for OMCs.

Last week, Finance Minister Arun Jaitley said on Thursday that creditors are expected to get Rs 70,000 crore as some of the big cases, including Bhushan Power & Steel and Essar Steel, are likely to be resolved in this financial year.

They have already recovered Rs 80,000 crore from 66 cases resolved by the National Company Law Tribunal (NCLT). According to FM, increase in conversion of NPAs (non-performing asset) into standard accounts and decline in new accounts falling in the NPA category show a definite improvement in the lending and borrowing behaviour. All these factors would augur well for PSU banks which are trading at depressed valuations.

For short-term investors, the strategy can be to sell on rise and buy on declines up to the general elections. On a safer side, we would suggest long-term investors to have a look at pharma MNCs, consumption stocks, auto stocks, PSU banks – trading at depressed valuations (looking better after the cleanup of NPA mess, progress made under the NPA resolution framework under IBC, faster resolutions under NCLT and proposed recapitalisation), IT sector and private insurance companies at the current moment.

Stock Ideas

3M India | CMP: Rs 20,357 | | Target: Rs 24,800 | Upside: 22 percent

We like 3M India due to its unique and sound business model. The company’s products touch life of citizens on a daily basis in some way or the other with products in different segments like abrasives, automotive, casting and splinting, dental, filtration, food service and hospitality, hand hygiene, marine maintenance and repair, medical device and optical components, orthodontic, painting equipment & supplies, patient monitoring, safety products, securement and immobilization-dressing securement, skin and wound care, sterilization monitoring, surgical solutions, tapes and adhesives, vascular access and wire and cables.

With renewed rigour around priority market segments such as automotive, infrastructure, energy and retail, the company is well aligned to address customers’ challenges with its strong expertise in science and innovation.

There is no similar and comparable company in India with its unique products. As the country prepares for the 2019 general election, there are expectations of more focus on execution and increased expenditure on infrastructure by the government. All this augur well for the company’s business segments that are focused on domestic growth in the future.

The company enjoys a strong balance sheet with virtually zero debt company. The significant correction in the stock price gives investors an opportunity to take a pie of this great company who had missed the bus earlier.

In the recent turmoil, the stock has corrected from levels of Rs 26,662. At difficult times like now, it is better to accumulate companies of such kind which can give you multibagger returns over the horizon of 5-10 years. In the near term, we expect an upside of 22 percent.

Eicher Motors | CMP: Rs 20,103 | Target: Rs 25,129 | Upside: 25 percent | Horizon: 9-12 months

The company's motorcycle division (flagship brand – Royal Enfiled) reported subdued monthly sales numbers in December 2018 which resulted in steep correction of the stock price in the previous week.

Royal Enfield aims to lead and grow the mid-weight (250-750cc) motorcycle segment globally, and Interceptor 650 and Continental GT 650 will help the company accomplish this. The company’s strategy of new exclusive stores format introduced in India and international market is also auguring well.

Volvo Trucks is the market leader in the premium truck segment. VE Commercial Vehicles Ltd, a Volvo Group and Eicher Motors joint venture, reported 2.4 percent increase in sales for December 2018 to 6,236 units.

We believe this company is available at cheap valuation only at distressed times. One may argue that Royal Enfield market share might be impacted owing to competitors introducing new range of bikes to compete with Royal Enfield.

We believe, the company will be able to manage competition in a good manner owing to its strong technical capabilities and high brand recall among customers. Brand loyalty for Royal Enfield is huge.

Regarding the LMD and HD vehicle production, we expect the company to increase the same to an average of about 300 vehicles a day in next three months of this financial year as against about 260 vehicles a day, till December 2018.

We advise investors to stick with a quality company like Eicher Motors during difficult times as history has proved that great companies always bounceback when bull run starts.

MORE WILL UPDATE SOON!!

IT firms expected to deliver strong Q3 earnings; slowdown in US could be a risk

FY19 guidance by Infosys and HCL Technologies, and next quarter guidance by Wipro will also be the key metrics to watch out for.

 

Indian software companies, which will kick off Q3 earnings season later this week, are expected to continue to do well in December quarter driven by consistent growth in US business and BFSI segment, and rupee depreciation, brokerage houses said.

But the only risk, they see, is any slowdown in the US economy going ahead.

According to brokers, the range for revenue growth in constant currency (CC) could be around 1-5 percent along with cross-currency headwinds, largely aided by big deal wins.

Despite seasonal weakness due to furloughs in Q3, we expect the top 5 Indian IT largecaps to register healthy USD sales growth of 1.5-4.8 percent QoQ in CC (with Infosys at the lower end and HCL Technologies at the upper end) with cross-currency headwinds of 50-80bp," CIMB said.

The research house expects robust growth in financial services (BFSI) across most companies. "Increasingly, the ramp-up in large deal wins for most companies should help boost growth."

Edelweiss also agreed and said as seen in previous quarters, robust growth in digital and large transformational deal wins should accelerate revenue and lead to positive management commentaries.

In a seasonally weak Q3 attributable to furloughs and holiday season, the research house expects the top-5 IT players—Tata Consultancy Services, Infosys, Wipro, HCL Technologies and Tech Mahindra—to clock 2–3.3 percent QoQ revenue growth in constant currency.

Depreciation of major global currencies against the USD is likely to hurt revenue growth again by 40–70bps QoQ, but at the same time, the INR's depreciation against the USD would lift margins 40–60bps QoQ, it said.

The rupee fell nearly 10 percent against the US dollar in 2018 as the dollar appreciated by 1.3 percent against pound and 1.9 percent versus euro in Q3.

On the operational front, margin expansion is expected to continue in December quarter on rupee depreciation and operational efficiencies, and as a major portion of the cost increase was already witnessed in the first half of FY19.

CIMB expects the top 5 Indian IT companies (except Infosys) to report a 10-30bp QoQ rise in adjusted EBIT margins, led by marginal currency benefits, ramp-up of deal wins and ongoing operational efficiencies.

With increasing supply-side issues in onsite locations, management’s views on margin outlook in near-medium term will be a key thing to watch.

Edelweiss expects the maximum margin expansion sequentially for the quarter.

The broker expects margins at the top-five IT companies to expand 70–100bps driven by INR depreciation and operational efficiencies.

During Q3FY19, the INR on average depreciated 2.7 percent against the USD, which should increase margin by 40–60bps for the quarter. Headwinds such as visa costs and wage hike are behind now. However, the impact will be limited due to lower utilisation owing to furloughs, investments in digital and localisation, and training of freshly inducted employees.

In the case of Infosys' full-year revenue guidance, most brokerages expect Infosys to maintain its guidance, but CIMB and Motilal Oswal expect the IT firm to revise up its lower-end of USD sales growth guidance to around 7-8 percent, from 6-8 percent in CC terms, with its increasing order book. However, Edelweiss, Jefferies, PhillipCapital and Nirmal Bang expect the company to retain FY19 revenue guidance.

For HCL Technologies, brokers do not expect any changes in its USD sales growth guidance of 9.5-11.5 percent for FY19 in CC terms. For both companies, they also do not expect any change in their EBIT margin guidance for the full year.

Key things to watch out for would be the commentary on the deal-flow and CY19 IT budgets, commentary surrounding Brexit, US tariffs on Chinese imports, commentary from largecaps on client IT spending, pricing pressure, growth in digital services, BFSI outlook, Europe revenue growth rates, and changes in employee matrix, viz., hiring and attrition.

FY19 guidance by Infosys and HCL Technologies and next quarter guidance by Wipro will also be the key metrics to watch out for.

Commentary on 2019 outlook will be keenly watched especially given recent concerns over US economy and growth uncertainty indicated by Accenture.

MORE WILL UPDATE SOON!!