India Morning Report: TCS out of the IT pick gameplay in 6 months? HDFC Bank ticks up on ;well played’

TCS slow growth despite its largest revenues probably never really enthused markets as it was swiftly reduced to an also ran soon after the first results from a Narayan Murthy led Infosys. That is of course a probably over reaction  as the purported weakness in Domestic Business and any other came amidst a good enough 17% bump in revenues, the company choosing to highlight its miss in domestic business in its main PR headlines on Q3 results highlighting quarterly growth in International revenues alone, leaving analysts in no doubt a larger number of independent analysts and brokerages having been following the stock consistently.

We for one do not mind because their growth was never encouraging after their impetus in Europe fizzled after 2009 or 2010 and CSC kept a lot of public /healthcare accounts in the US despite some good purported Financial services wins which probably remained larger deal tickets untranslated into any business.

HDFC Bank revenues and PAT expectations hit home with an NII score of INR 46.34 B up 15% on year and NPAs tick down to 1% (Gross) Markets did wait for Friday results to move up but ITC would probably not come in before Markets close and so the indices close in the red, up for the week.

This edition of the Morning report running late however will be all we give you on Friday.  Markets may still not like the bank’s NII just shy of estimates as it has not been ramping up Fee and Charges in Non Interest Income as we have highlighted earlier and the same is probably advised on he Indian scenario seeing charges apart from interest as a customer service issue and even on pricing.  PAT is up 25% on year, creditable but probably not as much as their run rate has been till now.

HDFC Bank also probably needs to flesh out its Transaction Banking performance in the current scenario.

ICICI Bank tick down from here may shuck some other sector underperformers as banking remains under a cloud. I am waiting for the CAR also to start balancing out at a lower 13% , the 15% Basel I score as the india guidelines do not jump RWA in traditional lending assets, sees HDFC Bank remain the least impacted and thus likely to lend better and higher excet for higher rate concerns on NPAs. the industry wide NPS fear is probably rooted outside rates and clouding others not just from conservative lending which seems to be slowly counting against performers like HDFC Bank and YES Bank at this stage

NIMs at 4.2% underline the problems were outside Central Bank mandated rates and asset quality issues. FX an Derivatives have moved up INR 3.33 Bln

Shorts on Banknify are illvised ( as Ashwinin jums in on Closing trades) considering its Friday

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