Indian equity benchmarks on Friday staged a rebound, pausing their three-day losing run. The uptick was backed by banks and some IT pockets due to strong quarterly results. The 30-share BSE Sensex pack climbed more than 250 points to trade above 81,280 level, while the broader NSE Nifty index moved over 100 points to top 24,850. Buying interest in stocks Axis Bank, Tata Consultancy Services (TCS), Wipro and index heavyweight Reliance Industries Ltd (RIL) lifted the indices higher.
Private sector lender Axis reported an 18 per cent jump (year-on-year) in its net profit for the September 2024 quarter (Q2 FY25). Profit climbed to Rs 6,917.57 crore in the second quarter against Rs 5,863.56 crore in the Q2 of previous fiscal. Nuvama maintained 'Buy' on the stock with a target price of Rs 1,335, saying Axis Bank valuations offer downside comfort.
The risk-reward ratio on Axis Bank appears favourable with the stock trading at 1.6 times FY26 estimated core banking and less than 11 times its estimated FY26 EPS, ICICI Securities said. Separately, investors would be keenly watching HDFC Bank results, slated to be declared on Saturday, October 19.
Amid the IT pack, Wipro and TCS were seen trading in the green. TCS kicked off the tech earnings season on a positive note. It posted a 5 per cent rise in net profit, at Rs 11,909 crore, for the September 2024 quarter (Q2 FY25) compared with Rs 11,342 crore in the year-ago period. In Q2 FY25, TCS' revenue from operations came at Rs 64,259 crore, up 7.65 per cent from Rs 59,692 crore in the September 2023 quarter.
TCS also witnessed a strong performance in growth markets, analysts said while retaining their 'Buy' ratings on the stock. "BFSI vertical up 1.9 per cent QoQ in dollar terms, higher than company average growth. With the US Fed easing cycle and stable macro prints, the growth recovery narrative still holds true for the IT sector and TCS as a whole, steeping into the second half of fiscal FY25 and the whole of FY26. We have a 'Buy' rating on TCS," said Sanjeev Hota, Head of Research at Sharekhan.
Nuvama Institutional Equities said TCS delivered modest, but in-line Q2FY25 results. "We continue to value TCS at 30 times Sep-26E PE. Maintain 'Buy' with a revised TP of Rs 5,100 (earlier Rs 5,250)," it said.
Wipro recorded a 21.26 per cent surge (YoY) in its September 2024 quarter's consolidated net profit. During Q2 FY25, profit came at Rs 3,208.8 crore against Rs 2,646.3 crore in the year-ago period.
Wipro's order book is a blend of mid-sized and small deals, indicating some short term deals are back in the pipeline, said Nirmal Bang Institutional Equities. It suggested a target of Rs 600 on the stock, as it maintained its 'Hold' rating.
In the case of RIL, shares of the Mukesh Ambani-led conglomerate are in focus after the company fixed the record date (October 28) for the issue of bonus shares in the ratio of 1:1.
However, a few market watchers felt that continuous selling by foreign institutional investors (FIIs) remains a key concern. Looking ahead, a 'sell-on-rise' strategy is advisable, said Hardik Matalia, derivative analyst at Choice Broking.