The week began with losses led by Infosys post its poor results and guidance for the upcoming year. Markets lost on three of the five trading sessions and gained on one. The fifth session which was the last day of the trading week remained flat. At the end of the week, BSESENSEX lost 775.94 points or 1.28% to close at 59,655.06 points while NIFTY lost 203.95 points or 1.14% to close at 17,624.05 points. The broader indices saw BSE100, BSE200 and BSE500 lose 0.94%, 0.84% and 0.75% respectively. BSEMIDCAP gained 0.50% while BSESMALLCAP was up 0.30%. 

The Indian Rupee lost 24 paisa or 0.29% to close at Rs 82.09 to the US Dollar. Dow Jones gained on two of the five trading sessions and lost on the remaining three. It closed flattish for the week losing 77.51 points or 0.23% at 33,808.96 points. 

Coming to Infosys, the share lost Rs 131 on Monday and closed at Rs 1,258. During the remaining four days of the week, it lost a further Rs 31 to close at Rs 1,227, a weekly loss of Rs 162 or 11.66%. In comparison TCS lost 0.88% and HCL technologies lost 2.15%. Amongst the major IT players, Wipro is yet to declare results and would be doing so on 28th April after its board meeting held over 27-28th April. Very clearly markets have not liked the poor performance from Infosys and its single digit growth guidance for the financial year 2023-24. 

The week ahead sees Mankind Pharma Limited tapping the capital markets with its offer for sale of 4,00,58,544 shares in a price band of Rs 1,026-1080. The issue would garner Rs 4,326 crs at the top end of the price band. The issue opens on Tuesday the 25th of April and closes on Thursday the 27th of April. The company is almost entirely selling its products in India with 97.60% of its revenue of Rs 7,781.55 crs being domestic in the year ended March 2022. It reported a profit after tax of Rs 1,434.12 crs and the EPS was Rs 35.78. In the nine months ended December 2022, revenues have increased to Rs 6,696.76 crs and the profit after tax was at Rs 990.66 crs. The company undertook the creation of a new speciality division in the current year 2022-23 for marketing its products. This one-time cost of approximately around Rs 150 crs, has impacted the profits for the year ending March 23. The PE at the offer price is 28.68-30.18. 

The issue is attractively priced and offers scope for investors with a medium to long term outlook. The company has an active R&D lab and a sizable team to talk about. They would be commercialising a product within the next couple of quarters which would be sold globally and would make them only the second manufacturer of the same globally. Investment in the company would make for a decent investment looking at the sector, its growth and valuations. 

The week ahead sees April futures expire on Thursday the 27th of April. The current value of NIFTY at 17,624.05 points is higher at 679 points or 4.01% compared to the previous close of March expiry at 16,945.05 points. Markets had rallied for a good three weeks before the correction seen this week. The bulls have a clear edge and it looks unlikely that they would surrender this massive lead to the bears. There could however be some pressure and they may concede some ground.  

Reliance Industries Limited declared its results post market close on Friday and they would enthuse the markets when they open on Monday. The key point however is whether the Reliance results are enough to pull the markets and rebuild the momentum which existed a week ago. Looks highly unlikely. Expect market intraday volatility to increase and on a net basis, markets remaining in a broad band. 

The key resistance for the markets would be in the region of 17,850-900 on NIFTY and at 60,550-60,700 on BSESENSEX. If these are breached, then the next levels would be at 18,050-18,100 and at 61,100-61,250 points. On the support side, the immediate levels are at 17,500-17,550 and at 59,250-59,400 points. In case this is breached the next levels would be at 17,250-17,300 and at 58,800-58,950 points.

The trading strategy would be to use intraday volatility to one’s advantage. Further with results season on the sector where results are declared becomes a good area to trade. On a broader perspective, markets would be going nowhere.

The week went by and had four trading sessions and gained on all four of them. What was significant was the fact that the daily gains seem to be getting smaller and markets are giving a sense of tiring out. They seem to be struggling to gain at close. BSESENSEX gained 598.03 points or 1.00% to close at 60,431.00 points while NIFTY gained 228.85 points or 1.30% to close at 17,828.00 points. The broader indices like the BSE100, BSE200 and BSE500 saw the markets gain 1.28%, 1.33% and 1.34% respectively. BSEMIDCAP was up 1.52% while BSESMALLCAP gained 1.53%.
The Indian Rupee gained 3 paisa or 0.04% to close at Rs 81.85 to the US Dollar. Dow Jones gained on three of the five trading sessions and lost on two. It ended the week with gains of 401.18 points or 1.20% to close at 33,886.47 points.
Retail inflation (CPI) in March was at 5.66% against 6.44% in the previous month. IIP or industrial growth in February was at 5.6% against 5.4% in January. Looking at the numbers on inflation and IIP, the decision of the RBI to take a pause in raising interest rates becomes a brilliant move. The move was well timed and gives the economy time to wait for the outcome of the monsoon.
Results season has begun and it could be said that the beginning is not the best one could have hoped for. While TCS was slightly below expectations, at the end of it all the result could be termed as overall acceptable. However, the result from Infosys was disappointing and the guidance for the next year 2023-24 was even more disappointing. Expect the share to be under pressure when trading resumes in the coming week.
The week ahead would see the listing of Avalon Technologies Limited on Tuesday the 18th of April. This is likely to be followed with Mankind Pharma Limited tapping the capital markets with its IPO which would conduct its roadshow in the middle of next week. The issue is a mega issue and would be in the region of around Rs 4,500 crs. The company had reported an EPS of Rs 35.78 for the year ended March 22. As per street expectations, the price band would be a four-digit number in the region of Rs 1,000 plus minus Rs 50. The top line reported was around Rs 8,000 crs and the net profit after tax was about Rs 1,450 crs for the period ended March 2022.
I strongly believed that markets were expecting a lot from the annual results to be declared this time around. If this is the beginning, then one may have to either wait for a series of good results or would by force have to change expectations from results for the year.
We have had a good three-week rally from the lows made towards the end of March. The ensuing rally has been fast and furious. While one expects markets to typically pause for breath or undergo a correction, nothing of that sort has happened in our markets. Maybe the poor set of numbers from Infosys may trigger the correction.
Key resistance for the markets would be at 17,850-900 on NIFTY and at 60,550-60,700 on BSESENSEX. If these are breached, then the next levels would be at 18,050-18,100 and at 61,100-61,250 points. On the support side, the immediate levels are at 17,550-17,600 and at 59,800-60,050 points. In case this is breached the next levels would be at 17,250-17,300 and at 58,800-58,950 points.
The strategy for the week would be to use rallies to sell and buy on sharp dips. While over the last week, my expected correction did not happen, it’s likely to happen this week. Trade cautiously.