Sensex Today | Share Market Live Updates: Nifty hits record high; Sensex jumps 700 points as IT stocks zoom

We upgrade core earnings for by 10.5%/15.1% led by strong equity MAAuM growth in FY24 YTD (+46% for HDFC AMC vs +37% for industry). The company saw a good quarter yet again. QAAuM was a bit lower; revenue was in-line suggesting tad better realization at 48.7bps (49bps in Q2’24). Change in TER slabs for 61% of active equity was offset by increase in equity mix by 2.9% QoQ and fall in debt/liquid, protecting blended yields. Equity performance within 1-yr and 3-yr buckets remains best-in-class which has resulted in strong net flows’ market share of 23% over Apr-Nov’23 (vs 8.6% in FY23). Hence equity market share at 12.6% further expanded (+26bps QoQ). Over FY23-26E we see core PAT CAGR of 18.0% (earlier 12.5%). Stock is trading at 34.4x; rolling forward to FY26E core EPS we raise multiple to 39x from 35x (5yr avg. of 40x) since HDFC AMC should continue to deliver better than industry equity returns. Our TP rises to Rs3,900 from Rs3,000. Retain BUY.

§ Healthy equity growth drives better revenue: QAAuM was a tad lower at Rs5514bn (PLe Rs5538bn) growing by 5.1% QoQ; equity QAAuM grew by 10.5% QoQ. Revenue was exactly in-line at Rs6.71bn led by increasing equity share. Hence annualised yields were slightly ahead at 48.7bps (PLe 48.5bps). Opex was largely as expected at Rs1.76bn (PLe Rs1.79bn). ESOP cost was Rs130mn for Q3’24. Led by strong revenue, core income was higher at Rs4.96bn (+0.8% ahead of PLe) resulting in operating yields at 36bps (35.6bps last qtr). Other income was ahead at Rs1.4bn (PLe Rs1.1bn). Tax rate was a bit lower at 23.3% compared to 25.7% last quarter due to increase in DTA led by certain investments transitioning from short-term to long-term. Hence core PAT yields were a shade better and inched up to 27.6bps from 26.4bps QoQ. PAT was 4.0% ahead of PLe at Rs3.81bn due to higher other income.

§ Equity share continues to improve protecting yields: During Q3FY24, due to strong equity market growth, 61% of equity AuM (incl. balanced) saw a change in its TER threshold causing tailwinds to yields. However, this was offset by increase in (1) Equity mix (incl. balanced) QoQ from 55.1% to 57.9% (2) fall in debt/liquid share by 1.5%/1.7% to 23.3%/11.3% respectively, protecting blended yields. Driven by superior equity performance leading to market share gains in net equity flows, market share in equity+bal QAAuM has been enhancing post Q1FY23; it improved QoQ by 26bps to 12.6%. As of Dec’23, basis weighted average equity performance, HDFC AMC remains the top performing fund (rank 1) in the 1-yr and 3-yr bucket.

§ Retail contribution increasing; 24 branches added in Jan’24: Retail AuM (stickier) is enhancing; in Nov’23 individual MAAuM accounted for 70% of total, compared to 59% for the industry. Over the last 1-yr the market share in unique investors has enhanced from 17% to 21% while incremental market share in a quarter was strong at 50%. Yields as at Dec’23 end were: equity-63bps and debt at 28-29bps. On opex, 24 branches were in Jan’24 of which 22 were opened in B-30. Hence, as per the company, additional cost in Q4’24 may not be material. On staff cost, management had hinted last quarter that annual increase in employee cost could range between 10-12%.

Rating: BUY | CMP: Rs3,501 | TP: Rs3,900

The company is likely to report a 6.3% growth in net profit to ₹4,063 crore, driven by robust revenue expansion and a 5.47% sequential uptick in EBIT to ₹5,204 crore, During the second quarter, HCL recorded profit at ₹3,832 crore, and revenue from operations at ₹26,672 crore.

Polycab was in the spotlight over the last few sessions amid reports of tax evasion allegations against the company. Amid this backdrop, the company shares tumbled from ₹5,404 apiece to ₹3,878.45 apiece. Polycab later clarified it has not received any written communication from the IT department regarding the outcome of the December raids and that there is no material adverse impact on the financial position of the company.

Infosys share price rallied over 6% in early trade on Friday after the IT services major reported better-than-expected earnings for the third quarter of FY24, despite a fall in revenue and net profit.

At 0902 am, Sensex was up 300 points at 72,020.31. TCS, Infosys, M&M Ultratech Cement, LIC, HG Infra will be in focys today.

TCS, Infosys, M&M, Wipro, HCL Tech, Ultratech Cement, LIC, HG Infra are some of the stocks to watch today. 

HCL Technologies, Wipro, HDFC Life Insurance Company, Tata Metaliks, Anand Rathi Wealth, Artson Engineering, Bharat Bijlee, Aditya Birla Money, Den Networks, Just Dial, Harshil Agrotech, Hathway Bhawani Cabletel & Datacom, Hi-Tech Pipes, JTL Industries, will announce their quarterly earnings on Friday.

State Bank of India (SBI) has long avoided payment transactions for Russian oil bought by state-run refiners to avert US sanctions that came into force on 5 December 2022, two people aware of the matter said.

SBI, India’s largest lender, is the authorized dealer bank for foreign transactions of state-run refiners. The sanctions of the US treasury department’s Office of Foreign Assets Control on maritime transportation of the Russian Federation-origin oil took effect on 5 December 2022, and for seaborne transportation of petroleum products on 5 February 2023.

Tata Consultancy Services (TCS) Ltd grew faster than its closest rival Infosys Ltd in the December quarter and beat profit estimates, even as both IT industry heavyweights remain at risk of clocking some of their weakest growth numbers in 2023-24.

At least a third of TCS’s incremental growth in the third quarter was driven by the large contract it secured from state-owned telecom firm Bharat Sanchar Nigam Ltd (BSNL). Excluding that, its performance was only a tad better than that of Infosys, which posted a third straight quarter of muted performance with both revenue and profit falling short of Street expectations.(read more)

The Central government’s net direct tax receipts after refunds rose 19.4% year-on-year to ₹14.7 trillion this fiscal till 10 December 2023, showing strong tax buoyancy.

Net direct tax receipts so far this year make up 80.61% of the budget estimates for direct taxes for the current fiscal.

The Centre had a direct tax collection target of ₹18.2 trillion this financial year, expecting to collect 10.5% more than the year before. 

Oil prices rose as the US and its allies launched airstrikes against Houthi rebel targets in Yemen, stepping up retaliation for attacks on ships in the Red Sea. While Brent rose as much 2% to near $79 a barrel, West Texas Intermediate was close to $74.

US consumer prices increased more than expected in December. The consumer price index (CPI) rose 0.3% last month after nudging up 0.1% in November, the Labor Department’s Bureau of Labor Statistics said on Thursday. In the 12 months through December, the CPI rose 3.4%.

The number of Americans applying for unemployment benefits fell to its lowest level in nearly three months last week. Jobless claim applications fell to 202,000 for the week ended 6 January, down by 1,000 from the previous week, the Labor Department reported.

China’s consumer prices fell for a third straight month in December, a sign of weak domestic demand that’s leading economists to call for more stimulus. The country’s consumer price index fell 0.3%. The producer price index, which measures factory-gate prices, fell 2.7% on-year. (Bloomberg)

Equity markets in Asia were mixed Friday as traders digested conflicting signals in US inflation data. Japanese stocks opened higher on Friday, extending gains from the previous day’s session. Australian shares and Hong Kong equity futures fell. US futures were little changed after the S&P 500 ended Thursday flat. The tech-heavy Nasdaq 100 closed 0.2% higher overnight.