- 7 hours ago
The challenges facing IT companies are not temporary, but structural, noting that the business model is shifting from effort-based billing to a more outcome-based approach, says expert.
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00:17good afternoon you're watching the business today show with me Sakshi Batra this is where I get you
00:22all the closing action on the lal street first up let's take a look at what's hot in the corporate
00:26and the financial world a whopping 40,000 crore rupees of wealth wiped out as a steel tech stock
00:36collapses nearly 11% its worst fall in over a decade traders dumped the stock after the company
00:42posts its first annual loss in 16 years brutal triple miss on revenue margins and guidance
00:56the sensex and the nifty snap their three days winning streak as brutal tech sell-off wipes 500
01:01points off the board hormus uncertainties add to the mix with profit booking and high oil prices hitting
01:07the sentiment sugar stocks rally a day after transport minister Nitin Gadkari pushes for
01:15100% of ethanol blending says the country needs to be atma nirbhar and reduce the current 22 lakh
01:21crore rupees oil import bill the rupee falls loses nearly 90 peso this week crashes to a three-week
01:31low despite the RBI is aggressive intervention to defend the currency the double whammy of a US
01:36naval blockade and hundred dollar oil is pushing the rupee to the brink
01:46granataka eases compliance rules for breweries in its new excise policy listing of ingredients and
01:52sugar levels on labels no longer mandatory overall prices to rise stronger brews to cost more than the
01:59drinks with lower alcohol content first up the news that we have been witnessing a massive fall
02:12because of on the last street it's the IT stocks that are seeing a brutal sell-off in trade today
02:17the
02:17nifty IT index has plummeted over 1,300 points but the story that is leading to a staggering wealth
02:25destruction of over 1 lakh crore rupees of a loss for investors money that is wiped out in just a
02:30few
02:30hours of trading session today is because of this IT sector the primary trigger has been a clear sharp
02:37fall in HCL tech shares the stock is down nearly 11 percent its worst single day performance in over a
02:43decade heavyweights like Inquisis and TCS are also down by 3 to 4 percent mid caps are not spared
02:49either persistent systems and Tata Alexei shares have fallen up to 5 percent however bucking the
02:55trend our Oracle financial services software holding firm while tech Mahindra shares have recovered from
03:00intraday lows after the q4 results well we can quickly look at how the markets have been shaping up
03:06through the course of the session it's been all eyes on the IT sector HCL tech which has missed its
03:12q4
03:13numbers in fact the FY 26 guidance has been missed there's a over 3 percent drop in the revenues for
03:21the company even FY 27 forecast is muted one to four percent of a growth is what they expect this
03:28is
03:28despite the fact that HCL tech just a quarter ago while they released their December quarterly results
03:34had projected higher you know earnings report coming in for cure for the entire fiscal year of 2026
03:40they have projected higher growth numbers for the revenues they have missed their own guidance this
03:45time around and there is some concern on the AI disruption as far as the impact that could lead
03:53to in the current financial year that's 2027 as well HCL tech itself has wiped off 40,000 crore rupees
04:01from investors wealth today with that 11 percent crash and nifty IT index together has seen investors losing
04:08one lakh crore rupees as well because of this sharp sell-off just a couple of sessions ago we were
04:14finally looking at the IT sector coming off their long drawn underperformance and finally seeing some
04:21traction but we have now today seen a sharp sell-off on HCL tech that has dragged the IT sector
04:28again
04:28and there is a widespread caution on the IT stocks once again let's look at how the nifty is trading
04:33at
04:34you can see 24,376 onto the nifty we're nearly 200 points lower in trade at this point in time
04:41again a lot of
04:42choppiness that we saw during the course of the session we have again drifted towards the low point of the
04:47day as well
04:48what we're also seeing is that most of the sectors are now coming under pressure IT index is now down
04:53nearly 4 percent
04:54that's the kind of crash that you're looking at on the IT stocks as well when we look at the
04:59other sectors
04:59uh well there is some green that you still see on the screen with regards to uh you know the
05:04small cap
05:05hundred index with regards to the FMCG index so the broader markets are doing better than the nifty and
05:11the nifty bank at this point in time yes the small cap index is now up over a percent so
05:17the market breadth
05:18is shifting towards the broad markets the small and the mid-cap shares as well let's actually welcome our
05:24guest on board devarsh vakil head of prime research htfc securities is with us devarsh first up your
05:29comment on hcl tech the sharp fall that we've seen of 11 percent worst single day fall for hcl tech
05:36shares after the q4 numbers have come in and the company has missed their revenue growth guidance
05:44yes so as you mentioned the uh the numbers revenue numbers were am i audible yes i can hear you
05:52devarsh
05:53okay okay okay yeah great so uh the as as you mentioned the numbers are below market expectation
06:02and the uh problem with the IT companies is that this is not a temporary blip now the whole business
06:11model needs to be changed in a way that earlier the number of hours or the effort-based business which
06:18they were engaging now they will have to uh change the business model towards the outcome based uh
06:25post model and that is impacting the uh business the q4 results were as soft only 0.1 percent qq
06:35constant
06:35guarantee and enrd uh which was down 1.3 percent the normal stock
06:42and that is the reason uh continuation of two large sap programs all these are uh not just weakness or
06:55the
06:55delay which is uh permanent loss of business and that's why they have also reduced their fi 27 guidance so
07:01we have also cut our estimates by about four percent and revised our target lower to around 1465.
07:08okay and on the entire IT sector would you continue to remain cautious
07:13yes we are uh cautious there are stock specific opportunity like uh we saw from persistent uh there the
07:22quarter was good and it was a one more resilient carter there where they have delivered about 3.4
07:27percent qq growth so uh we have to be extremely stock specific and there are some pockets where
07:34pc opportunity but overall uh stands on the IT sector continues to remain cautious okay let's shift focus
07:42to something that's actually looking up into the session today there's a massive boost for the green
07:47fuel economy that we are seeing union minister nithingat kari has made a strong pitch for india to go full
07:53throttle on alternative fuels urging the industry to move toward a hundred percent ethanol run vehicles
07:59the minister believes that switching from expensive imports to homegrown fuel is the only way to drive
08:07integrated growth for both the economy and for our farmers as well let's listen in to his vision for flex
08:13fuel future economic point of view import substitute is the need of the country
08:19technology and export export is the only way to create growth and the most important thing that
08:25we have to do integrated development if we have to do economically so we have to think about agriculture
08:31this industry to be involved and also to think about agriculture but my thought is that when
08:36it comes from the minimum of the energy here will be the same way to this industry
08:42but it comes from the minimum of the energy here right now let's say 100 percent ethanol
08:5925, 35.
09:00Now, once it's done in the time of RTLG, then you know how to do it, so ethanol, isobetanol
09:07as a 100% fuel, electric, hydrogen, and now in alternative fuel, methanol is also a
09:14place.
09:16All right, let me go to Divarsh now, Divarsh, we are also seeing as a reaction, the sugar
09:21stocks are up and about today, you know, of course, Sadhampur, look at Sri Renuka, look
09:27at the others, Avard, all of them are up and about on this kind of news announcement there
09:33that we need to bank more on ethanol to run our vehicles as well.
09:38What is the opportunity that investors can scout here?
09:41What could that mean for the sugar sector?
09:45So the sugar sector where they have the distilleries have actually been outperforming and most of
09:52these cash flow, which these companies have developed over the last five years, they are
09:59making distilleries and making ethanol.
10:06All right, I think there's some disturbance in that line, but you can look at it, how Dalmia
10:11Bharat is up 5% at the day's high and all the sugar stocks are in fact rallying on that
10:16news
10:17announcement from Nitin Gadkari as well. Let's move forward and now look at the liquor stocks
10:22too. Karnataka's liquor policy is set for a big shake up viewers and drinking alcohol
10:26could now dig a deeper hole into your pockets as well. The government's draft proposes a new
10:33tax system where higher alcohol content would mean higher prices, along with key changes to
10:38bottling and to the brewery rules as well. At the same time, a proposal to remove the ingredient
10:44disclosure on beer bottles is also raising concerns over transparency with the move now being seen
10:49as pro-industry and anti-consumer as buyers may no longer get the full information of what they're
10:54drinking. The draft is now open for feedback and the final rules would significantly impact the kind
11:00of prices we would be seeing, the regulation there is and the overall liquor market in the state as
11:05well. For more on this, I'm joined by my colleague from India today, Sagai Raj is here with us.
11:10Sagai, first up, give us an understanding what's been proposed as far as what kind of taxation
11:15increase can we expect on both beer and hard liquor with the kind of proposals that have been brought
11:20about?
11:23Where Karnataka government, which is known for increasing taxes on liquor prices, have once again
11:30have brought an amendment where they will go ahead and increase up to 5%, then the price will be around
11:4112 rupees per barrel of liter of beer. And whereas if it is more than 5 to 8%, then they
11:48have to shell out
11:49close to 20 rupees. So there will be increase of close to 20 rupees on the alcohol, the beer that
11:56the people
11:57are going to buy and it is a major hole for alcohol enthusiastic in the state of Karnataka.
12:04Okay, Sagai, thanks for getting us those details. So I think up to 5%, you'll have about 12 rupees kind
12:11of an increase
12:12as is being proposed. Above 5% alcohol content to 8%, it could be about 20 rupees an increase. There's
12:19also a sharper increase
12:20that's being expected for hard liquor almost 1000 rupees a litre as well. But these are all proposals. Remember, once
12:27these are finalized, we will, of course, get you all those details as well. Let's actually go back to Devarsh
12:34now.
12:34Devarsh, we were talking about the sugar space and now liquor space is in also focus because Karnataka, which is,
12:41you know,
12:42used to of taking stern measures when it comes to increasing taxation on alcohol, is yet again proposing higher
12:49taxes for both beer and hard liquor. Your sense of how should the liquor space be washed into? Is there
12:54any
12:55opportunity for investors to bet on this?
13:03Devarsh, could you hear me?
13:07All right. Okay, we'll get back to you once we sort out that line for all of you viewers. But
13:12remember,
13:13let's come closer to, you know, home. That's Noida. Noida airport operations are likely to be delayed as
13:21a foreigner CEO loses security approval opening in May could actually be pushed further. Operator
13:28Zurich airport is in talks with the government and finding new CEO could now take time. And this is
13:35what is being reported as of now. For more on this, I'm joined by my colleague, Richa Sharma, who's
13:40getting us all those breaking details. Richa, the, you know, Noida airport, the Jewar airport has already
13:48been facing a lot of delays. And once again, there is an indication that the opening could further be
13:54delayed this time around. It's regards to the CEO. Yeah, Sakshi, what we have heard, you know, that
14:01they, that Christoph Schnellman has not got the security clearance. So what initially when the
14:09airport was inaugurated March end, the government had said that it will take another 60, 45 to 60 days
14:15for the airport to get operational, by which standard it should be May end. But now with this issue being
14:21stuck, we could see it's most likely that, you know, that the opening will be pushed away further.
14:27While the, you know, Noida International Authority is in talks, but we don't know what we have heard
14:33that Home Ministry is stringent, you know, they want to pursue with the rules that for a greenfield
14:39airport, a foreign, you know, a foreigner cannot be the head or the CEO. So we may see that Noida
14:47will,
14:48Noida Airport Authority will have to look for a new Indian CEO. And that is likely to take time because
14:54these are high profile posts, there are security clearances even, you know, attached to all those
15:00things. So there is a chance that we may see that it gets, gets further delayed. And people who've been
15:06all looking to fly from the Jaivar airport may still have to wait for a few more days.
15:13Okay, so when is, you know, fair expectation that the airport will be operational and one can access
15:20this airport? The infrastructure has been there ready since long. The launch was happened, the launch
15:26happened amid much fanfare as well. But it's just that the operations are yet to pick up. So what's a
15:32fair
15:32assumption that you have, Richa? By when do we see this airport getting functional finally?
15:38See, what we have heard from the Noida International Airport is that they're still in talks with the
15:44BCAS, the Bureau of Civil Aviation Security. And they've been trying hard, you know, they've cited,
15:52in fact, that when airlines can have, you know, a foreigner as CEO, when it comes to Air India or
15:59Indigo,
15:59so why can't the airport, why can't a Greenfield Airport have? So if it works out with the chances, looks
16:07grim.
16:08So they will start hunting for a new Indian CEO. So we don't know how much time will it take,
16:14but definitely
16:15we expect that it to be pushed mid-year somewhere or even further. So we have to, it's just a
16:21wait and see that
16:22how the NIA now proceeds from here, because they want the airport to be functional very soon.
16:27But they have to come out or they have to start hunting for a CEO to lead the airport.
16:33Okay, thanks a lot for getting us all of those details. Looking forward to get more details on the
16:38same also from Richa. Keep watching out for all the developments and keep us posted on the final
16:44operations as to how long will it really take for the airport to be functional as well. Meanwhile,
16:49let's shift our focus back to the markets. We're just about seven minutes away from the day's close.
16:5524,379. It's been an absolute choppy ride in a range-bound fashion, but it's been very, very choppy.
17:02But as we have seen, it's the IT stocks that have been the biggest, you know, place where we have
17:09seen
17:09an impact today, nearly 3.9% of a fall. Also, the banking space at large has been weakening.
17:16You could see financial services down 0.8%. The private banks also down by almost 0.8%. Autos have
17:22also been driving in a slower lane as well. But the rest of the pockets, the small caps, the media
17:28stocks, the FMCG, real estate, oil and gas names, that's been again in focus as well. Let me go back
17:34to Devarsh and try and understand. Devarsh, how are you looking at the opportunities that present
17:41themselves in this current market? Where are you finding comfort of valuations and signs of a
17:46turnaround, you know, despite the overhang that we are seeing from the world?
17:53Yeah, I hope I'm audible this time. Sorry for the connection issues. Yeah. So, as you mentioned,
18:00the markets are discounting that the geopolitical uncertainty, which was plaguing the market till now,
18:05are more or less over. And there are hopes that these crude oil prices will come down. So,
18:11what we have released recently is a basket of stocks where we find opportunity which were impacted
18:17because of the higher crude oil prices. So, we are assuming that once this geopolitical uncertainty
18:24come gets over, we will see a rebound. So, there we have taken stocks in like aviation, oil marketing
18:32company, construction companies which are exposed to middles like L&T and create a basket of 10 stocks
18:39and we are calling it bounce back theme. So, I think if we are looking for next three to six
18:44months,
18:45once the margins normalize as the crude oil prices come down, all these companies are likely to benefit.
18:52So, that's the one thing which we can play for next six to nine months. And we have seen this
18:56in the historical data that whenever such high prices comes down, eventually these companies are
19:02likely to be the biggest beneficiary in these stock markets. Okay. I wanted to also ask you on the
19:07energy space, the power energy names are coming back into focus. Since the last two to three weeks,
19:14there's been renewed focus on the power space, on the energy space. Look at the index,
19:18it's up by one and a half percent on the energy names. Power stocks are also back up and about.
19:24Irida is up by almost nine percent. This has been a long, long underperformer. There's been a wide
19:29time consolidation. Adani Energy is up in trade. Pick up any stock within the power space also,
19:35you'll be able to see a lot more interest, you know, on these spaces. Does it just have to do
19:41with
19:41what's happening in terms of the season change? Summer is upon us. Or is it again a renewed focus
19:47on how we need to focus on a lot of renewable energy sources, pull them up so that, you know,
19:54overall our energy security needs can be met?
20:00So there are a couple of reasons why we think that the power is a sector to be in and
20:06we are
20:06seeing a lot of demand. One is the record electricity consumption driven by the demand because there
20:13are signs of early summer and industrial activity is also increasing. Increasingly,
20:19the investors are playing for the theme that eventually the electric vehicles or data centers
20:25and all these technological changes will require higher demand from electricity. That's the one
20:31expect coupled with the prediction that there could be a dry monsoon. Only no effect is there. So
20:36that also is anticipation of a higher cooling requirement is fueling the demand. So, and we have
20:44seen that the earnings have been strong. These power companies have reported quarter three numbers,
20:49which was very strong. So I think these all are playing into the power sector and we think that there
20:54we have recently issued some of the reports in the power sector, NTBC, Adani Power, JSW Energy.
21:01These are the stocks. I think they are at a near 52-week highs and they have still room to
21:07go. So we
21:07will continue to hold them in our portfolios. All right. So Devash, on the Adani group stocks,
21:13particularly also there is a renewed amount of interest. You did talk about Adani Power that's
21:17already up, what, 50% in the last couple of months. And, you know, the stock is trading about 6
21:22% higher
21:23even today at 215. Look at Adani Energy, look at Adani Ports, look at what's happening with even
21:29cement majors like Ambuja. All the stocks, barring just here or there, one or two, rest, all of them
21:35are actually up and about in trade. 8% rally on Adani Energy today. So you can
21:39clearly see a renewed amount of focus on the Adani stocks. What's your focus here?
21:45So we have two stocks under our coverage where we like. One is the obviously the Adani Ports,
21:53strong cash flow and record cargo handling capacity. And that is the company which is keep
21:59generating a lot of cash flow, which is one of the strong balance sheet of the group. And
22:08obviously, the Adani Power has a high power reward. And a lot of NCLT assets,
22:14they have a very attractive valuation, which will keep them in good stead for years together. So,
22:21these two are the stocks which we have liking in from the Adani Pack.
22:26Okay, fair point. I hope that this has helped you out in understanding your approach there, viewers.
22:31Let me also ask you, with respect to what's happening in other asset classes, gold and silver.
22:37Gold and silver are trading higher again in trade today. So MCX silver has jumped 4,000 rupees to
22:43trade again at 2.5 lakh rupees a kilo. Gold is up 2,000. Again, trading at 1.53 lakh
22:48rupees at 10 grams as well.
22:50Devarsh, how are you looking at the bullion prices? We've just seen Akshay Tritya. There was reporting of
22:57lower sales vis-a-vis last year's sales this time around. The prices have already had, you know,
23:02run up very swiftly and sharply in the last one year. It's a cool off period that we are seeing
23:07on gold and silver prices right now. But what's your own suggestion to investors at this point?
23:16So, we were recommending a good asset allocation. See, it's a question of asset allocation. In a
23:23portfolio of equity investors, this is around 5 to 10 percent. According to the VCF is right,
23:29they can keep holding silver. We don't expect them to give the kind of return which they have given
23:35last year. So, we should temper the expectation this year. But from these levels, as the war comes
23:43down and geopolitical uncertainty goes down, I think dollar will correct. And once dollar comes down,
23:50all these commodities which are denominated in dollar will start doing well. So, around mid-single
23:57digit to low double-digit returns kind of returns we should expect from bullion this year.
24:03Okay. Okay. Markets have shut shop at 24,367 viewers. But there's a big breaking news that's
24:09coming in on your screens. Remember, we've been talking about the ethanol story. Now,
24:14ethanol is allowed in jet fuel. There are reports that are indicated that government has now okayed
24:18the ethanol ATF blending. And this blending will bring down the jet fuel costs as well. Remember,
24:25over the last couple of weeks, we've been looking at how the ATF fuel prices have been surging,
24:31leading to higher prices of domestic as well as international costs as well. The last time we
24:36focused on this story, remember, we talked about how the government has indicated the entire 100%
24:41ATF fuel price hike will be passed on to the international routes, but about 25% on domestic
24:47story. Now, there seems to be a case that the government is looking at bringing down the ATF fuel
24:54prices. And that could be a way of allowing ethanol to get blended in the jet fuel prices,
24:59jet fuel as well. And this okay would actually again bring back into focus the entire sugar pack.
25:05But let me first go across to my colleague Chetan Bhutani who's joining in. Chetan, this is big story.
25:11Ethanol ATF blending seems to be okayed. What are you picking up from your sources?
25:17The notification is just notified about one hour back. The government of India has updated the
25:21rules governing aviation fuel following, allowing the aviation turbine fuel or the ATF to be blended
25:26with synthetic and sustainable fuels, which includes ethanol as well. This effectively expands the
25:31definition of ATF, which was earlier limited to conventional petroleum-based jet fuel. And with
25:36this change, cleaner alternatives like sustainable aviation fuel can now be officially mixed and used in
25:42aircraft. The move is aimed at reducing the carbon footprint of the aviation sector,
25:47and of course, with the increasing prices of the aviation turbine fuel, which is ultimately
25:51affecting the customers with high ticket prices, along with global decarbonisation efforts led by
25:55bodies like the International Civil Aviation Organization. Importantly, the notification comes
26:00into effect immediately, removing a key regulatory barrier for airlines and fuel suppliers looking to
26:05adopt greener fuel options. Lastly, with this crucial enabling steps, the challenges however remain.
26:10The government has now allowed blending, but however, till the time it reaches the jet engines and the
26:16subsequent impact is seen on the ground. We'll have to wait and watch as to how much ethanol
26:20blending will have to take and how much time does it really take to take off.
26:24Absolutely, Chetan, this is an important story. Thank you so much for getting us all of those details.
26:28We were talking about how, you know, Minister Nitin Katkari is already talking about the way to protect
26:34India from expensive imports of fuel is to bank on alternatives like ethanol blending and he's
26:43talking about 100% running on ethanol fuel as far as vehicles are concerned and now ethanol blending
26:49seems to be okayed for even jet fuel and that's an important update that we're seeing at this point.
26:54Devash, coming to you, how do you see this update coming in government looking at okaying blending of
27:01ethanol for jet fuel?
27:04So, it has two implications. First is, I think this is more towards the immediate availability of the
27:12fuel and allowing our economy not to get impacted because of the unavailability of fuel. There are
27:19reports that countries like Germany are looking at suspending flights because unavailability of the fuel.
27:27I think the sustainable fuel, sustainable aviation fuel, what is called ethanol blended aviation,
27:35it is actually expensive compared to the normal ATF. So, I think, and it requires more burning. So,
27:43it may increase the cost, but it will ensure the availability. So, short term, it is positive that
27:50they will be able to have more availability, but it may increase the cost and reduce the margin. So,
27:56short term, it may impact the aviation companies.
28:01Okay. We have a query coming in from one of our viewers, Devash, for you. This is Shivangi from
28:05Agra. She says that, I bought a few defense-related stocks and I'm making good money now,
28:10but should I hold them for long term? What would you advise on the defense stocks?
28:15I would advise her to hold on. See, the defense is a little longer term story. Obviously,
28:23stocks have done well and many stocks are looking little expensive if we look at the immediate
28:28earnings, but these are the stories which has potential to give earning growth year-on-year CAGR
28:34for next 3-5 years. The kind of geopolitics theater is there. Apart from the European countries,
28:45now we are seeing that the also Japanese companies are also looking to increase their defense spending
28:53and Indian companies are well placed to take benefit out of it. So, these companies have large
28:59order book and this will take 3-5-10 years to get fructify. So, I would advise her to hold
29:05on for
29:05a longer term. Much better days are ahead for defense companies.
29:10Right. Thanks a lot, Devash, for addressing that query and for giving us all those insights onto the
29:14markets as well. Viewers, it's time to wrap up the Business Today show, but you could definitely send
29:19in your questions in case you have on your stocks and investments. We'll be happy to address that with
29:23our top market experts. But before we leave you, the doors have shut on 1-8 Commune near Bengaluru's
29:29Chinnaswami Stadium, which is a restaurant previously co-owned by Virat Kohli over unpaid rent that's
29:36exceeded 2 crore rupees. The outlet has failed to clear dues for nearly six months now, prompting the
29:42landlord to move court, which has now ordered its closure. Sources have indicated that Virat Kohli had
29:48already distanced himself from the restaurant amid repeated compliance issues and fire safety notices.
29:55The outlet, operated by Trio Hills Hospitality, had also faced multiple notices from the BBMP and
30:03action for operating beyond permitted hours. With Kohli's exit and falling footfalls, the business
30:09reportedly has taken a hit and the restaurant will remain shut until all dues are cleared.
30:18It won't.
30:18It's good for the service to help staff on the website.
30:19It'll be a great Ain't that a hot please?
30:19It'll be a long day.
30:19to have a site where you can find the installation of the
30:19that you will be able to do.
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