HDFC twins, TCS, Infosys among top wealth destroyers

New Delhi: Before investors started buying the dip today, Dalal Street had already lost Rs 8 lakh crore in the last five days of correction. Top 10 companies have contributed roughly about 60 per cent or Rs 4.7 lakh to the correction, data from AceEquity suggests.

Infosys has been the leader among the wealth destroyers, eroding about Rs 1.05 lakh crore of wealth in the last five sessions. The IT major recently released March quarter earnings which disappointed investors.

Majority of the brokerages including Jefferies, Morgan Stanley, JP Morgan, CLSA and Nomura have cut target prices on Infosys by 4-7 per cent after the fourth quarter numbers came in below expectations.

It was followed by merger-bound HDFC twins which dropped up to 13 per cent. HDFC Bank and HDFC have contributed Rs 95,272.39 crore and Rs 57,917.19 crore to the fall, respectively. Majority of the domestic brokerages including Motilal Oswal, Edelweiss, Kotak Securities and Nirmal Bang are positive on India’s largest private lender and have recommended to buy it.

Tata Consultancy Services has lost Rs 77,773.13 crore of m-cap, whereas other IT bluechips Wipro and HCL Technologies have lost Rs 25,000-29,000 crore in terms of their market value.

Tier-I IT companies should deliver revenue growth in a narrow range of 2.8-5.1 per cent sequentially on a constant currency basis, with an exception of HCL Tech due to product seasonality, Motilal Oswal Securities had said in its report earlier this month.

Edelweiss said it prefers HCL, Infosys and TCS among large-caps, whereas Emkay Global said its pecking order would be Infosys, followed by Wipro, HCL Tech, Tech Mahindra and then TCS among Tier-1 names.

Unabated foreign fund outflows, rising inflationary concerns, spike in crude oil price, disappointing India Inc earnings and geopolitical concerns due to war between Russia and Ukraine, have made investors nervous, said market experts.

Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services Ltd, said global markets too came under pressure as sentiments got cautious following the latest Ukraine war developments.

“Further, the prospect of aggressive Fed tightening to rein in inflation also kept investors on the edge. The market is assessing the impact of the Ukraine war and spike in inflation on the ongoing quarterly results,” he added.

Other wealth destroyers include Bharti Airtel (Rs 23,301.88 crore) and Asian Paints (Rs 20,934.5 crore), hurting portfolios. However, the correction in these stocks has not been too steep and are yet to announce their Q4 numbers.

Domestic brokerage IIFL Securities sees Bharti Airtel logging Rs 2,396.10 crore in profit, up 215 per cent YoY over Rs 759.20 crore in the same quarter last year. Emkay Global pegs profit at Rs 2,009 crore, up 142 per cent YoY.

On the other hand, Sharekhan has an estimated target price for Asian Paints at Rs 3,689. The stock is expected to offer a 23 per cent upside in the next one year.

Larsen & Toubro and Bajaj Finserv have also eroded between Rs 16,600-18,100 crore of their market cap in the last five sessions.

In its recent report, JP Morgan maintained an overweight rating with a target of Rs 2,100. On the other hand, Bajaj Finserv may log a 148.5 per cent jump in net profit at Rs 2,400 crore on a 13.7 per cent YoY jump in net sales at Rs 17,500 crore, Motilal Oswal said in a note.

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