10:45am Infosys to kick off Q3 earnings season on Friday
Infosys, the second largest software services exporter in India, is expected to report a 1.9 percent growth in profit at Rs 3,157 crore (excluding forex loss/profit) for the quarter ended December 2014, according to the average of estimates of analysts polled Profit in the previous quarter was Rs 3,096 crore.
Revenue may jump by 3.3 percent sequentially to Rs 13,783 crore and dollar revenue may increase by 1 percent quarter-on-quarter to USD 2,222 million during October-December quarter.
Analysts believe the quarterly performance of the company may be impacted by seasonal weakness and cross currency headwinds. Weak outlook during the quarter from TCS already tempered expectations of a positive surprise by IT companies. Hence, reported dollar revenue growth at 1 percent may be lower than constant currency growth of 2.5 percent.
Earnings before interest and tax (EBIT) may grow 2.7 percent quarter-on-quarter to Rs 3,576 crore but margin may be flat at 25.95 percent in the quarter ended December 2014 compared to 26.1 percent in previous quarter.
10:30am Kotak, ING in focus
Shareholders have approved merger of Kotak Mahindra Bank and ING Vysya Bank with a share exchange ratio of 725:1000.
“The amalgamation was approved by 99.30 percent in number representing 99.93 percent in value of the shareholders present. The merger is subject to the approval of Reserve Bank of India (RBI), Competition Commission of India (CCI) and such other approvals as may be required,” a press statement said.
The extraordinary general meeting (EGM) of the members of ING Vysya Bank and Kotak Mahindra Bank was held in Bengaluru and Mumbai respectively.
The merger will be done through a share swap in which 725 equity shares of Rs 5 each of Kotak Mahindra will be issued for every 1,000 shares of Rs 10 each held in ING Vysya Bank.
Post the merger that was announced on November 20, 2014, Kotak Mahindra Bank will become the fourth largest private sector lender in India. The biggest three are ICICI Bank, HDFC Bank and Axis Bank. The combined banking entity will have a widespread network of 1214 branches across the country.
However, employees and officers of ING Vysya Bank had expressed concerns over their future post the merger.
10:15am FII View
Jyotivardhan Jaipuria, Bank of America Merrill Lynch says earnings growth, which weakened last quarter, is unlikely to recover in Q3FY15 with headline Sensex profit growth at a mere 4.2 percent on a consolidated basis and ex-oil growth at only 6 percent.
“A quarter of the Sensex companies are expected to a show a drop in profits. This is in-line with our view that earnings will recover gradually and show sharp growth from H2FY16,” he adds.
“Near-term, we continue to expect markets to be rangebound with bouts of correction due to slower than expected growth," says Jaipuria.
10:00am Market Check
Equity benchmarks saw some profit booking at higher levels but the Sensex still held above the 27000 level supported by banking & financials, capital goods, FMCG and auto stocks.
The index rose 220.78 points to 27129.60 and the Nifty gained 72.70 points at 8174.80. The broader markets outperformed benchmarks with the BSE Midcap and Smallcap indices rising 1.5 percent each.
More than five shares advanced for every share declining on the Bombay Stock Exchange.
Shares of HDFC Bank, HDFC, Tata Motors, ICICI Bank and State Bank of India were major contributors to the Sensex gains, up 1-2 percent. Hindustan Unilever, Sun Pharma, Maruti Suzuki, Bharti Airtel, Wipro, Coal India, Cipla, NTPC, BHEL and Tata Power surged 1-2 percent.
However, ONGC, Reliance Industries and Sesa Sterlite were only losers in the Sensex, down 0.3-0.8 percent.