Birlasoft Profit Slips Sharply
- 12th February 2025
Aaj Ka Bazaar
Wall Street’s main indexes closed on a mixed note on Tuesday, with gains in Coca-Cola and Apple offsetting losses in Tesla. Investors were closely analyzing the latest comments from Federal Reserve Chair Jerome Powell. He stated that the central bank does not need to rush to adjust interest rates, indicating that officials will be patient before further lowering borrowing costs. In Asia, equities also displayed mixed results. Japanese stocks saw an increase, while Australian shares remained stable in anticipation of the US inflation report scheduled for Wednesday. Additionally, stock index futures suggested potential gains for Hong Kong stocks. Considering the global market cues, the domestic equity benchmark indices, Sensex and Nifty 50, are expected to open cautiously on Wednesday following a significant decline in the previous session and amid mixed signals from global markets. Moreover, Prime Minister Modi’s two-day visit to the US, beginning on Wednesday, comes at a crucial time. As he meets with President Trump to discuss trade, there are hopes for a breakthrough that could ease tariff tensions and restore market confidence.
Markets Around Us
BSE Sensex –75,720.20 (-0.76%)
Nifty 50 – 22,896.15 (-0.76%)
Bank Nifty – 48,983.05 (-0.85%)
Dow Jones – 44,594.63 (0.00%)
Nasdaq – 19,642.78 (-0.36%)
FTSE – 8,777.39 (0.11%)
Nikkei 225 – 38,876.53 (0.19%)
Hang Seng – 21,634.77 (1.56%)
Sector: Computers- Software
Birlasoft shares crack 7%
Birlasoft reported a 1.5% increase in revenue for Q FY25, reaching Rs 13,627 crore, but its net profit fell by 27.4% to Rs 1,169 crore, mainly due to higher employee costs and weak seasonal demand. EBITDA dropped 23.7% to Rs 1,634 crore, and profit margins decreased to 12%, down by nearly 4%. As a result, Birlasoft’s shares fell by 2% to Rs 494.3. Analysts are pessimistic about the company’s performance, predicting further decline in revenue for Q4 due to extended employee furloughs and a weak demand outlook. The company expects growth in the BFSI (Banking, Financial Services, and Insurance) and Energy & Utilities sectors, but manufacturing and life sciences will continue to struggle. Brokerage firms like Nuvama and HDFC Securities have reduced their target prices for Birlasoft shares, indicating limited short-term growth and maintaining a negative or cautious outlook
Why it Matters:
Birlasoft’s weak profit and shrinking margins signal ongoing challenges, affecting investor sentiment. The company faces slower growth due to higher costs and uncertain demand, which could impact future performance. Reduced target prices from analysts reflect a cautious outlook, influencing stock value.
NIFTY 50 GAINERS
TCS – 4015.00 (1.30%)
TECHM – 1684.50 (0.92%)
INFY – 1889.95 (0.76%)
NIFTY 50 LOSERS
M&M – 2965.00 (-3.92%)
BEL – 256.75 (-3.13%)
RELIANCE – 1198.30 (-2.96%)
Secto: Automobile
TVS Motor to invest Rs 2,000 crore
TVS Motor has signed an agreement with Karnataka to invest Rs 2,000 crore over the next five years to set up a Global Capability Centre (GCC) in Mysuru. A GCC focuses on IT and related business functions. The company will also build a new test track and office infrastructure as part of this expansion. TVS Motor, which is the world’s fourth-largest two-wheeler manufacturer with 5.8 crore global users, aims to bring together engineers, designers, and experts in AI and machine learning at the new centre to drive innovation for next-generation bikes. The Mysuru facility, which already employs over 3,500 people and produces 15 lakh vehicles annually, will see efforts to double exports and revenue. This move is in line with Karnataka’s new Industrial Policy, which targets 12% annual manufacturing growth, aiming for Rs 7.5 lakh crore in investments and the creation of 20 lakh jobs by 2030.
Why it Matters:
TVS Motor’s Rs 2,000 crore investment in Karnataka will boost innovation and expand its operations, enhancing production and exports. The move strengthens the company’s global position in the two-wheeler market. It aligns with Karnataka’s growth targets, supporting job creation and economic development.
Around the World
Asian stocks mostly rose on Wednesday, with Hong Kong’s tech sector leading the gains, driven by excitement around artificial intelligence (AI). The Hang Seng index jumped over 2%, fueled by strong performances from Chinese tech companies like Alibaba and BYD, which saw significant stock price increases. Other regional markets were more cautious ahead of a key U.S. inflation report, with investors watching closely for hints about the Federal Reserve’s future interest rate moves. In Japan, the Nikkei 225 rose slightly, while South Korea’s KOSPI and Indonesia’s Jakarta Composite also saw modest gains. Meanwhile, China’s main indices barely moved. U.S. inflation data, along with comments from Fed Chair Jerome Powell indicating the economy is stable, kept traders on edge, as many are worried about the potential for higher interest rates and ongoing trade tensions. Indian and Australian markets showed mixed results, with India’s Nifty 50 slightly down and Australia’s S&P/ASX 200 up.
Option Traders Corner
Max Pain
Nifty 50 – 23,200
Bank Nifty – 50,000
Nifty 50 – 23,149 (Pivot)
Support – 22,908, 22,746, 22,505
Resistance – 23,312, 23,552, 23,715
Bank Nifty – 49,495 (Pivot)
Support – 49,084, 48,766, 48,355
Resistance – 49,814, 50,225, 50,543
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