July 11 2025

TOP NEWS

Glenmark Pharma : The company’s innovation arm, Ichnos Glenmark Innovation (IGI), and AbbVie have signed an exclusive global licensing agreement for IGI's cancer treatment, ISB 2001. Under the agreement, AbbVie will get exclusive rights to develop, manufacture and commercialize ISB 2001 in North America, Europe, Japan and Greater China. Subject to regulatory approvals, IGI will receive an upfront payment of $700 million and could earn up to $1.225 billion in additional milestone payments. Positive

ZEE: Shareholders rejected the company’s proposal to issue convertible warrants on a preferential basis to its promoters, with the special resolution failing to get the requisite majority of 75 per cent votes in favour. Close to 60 per cent of shareholders who participated in the process voted in favour of the resolution, with the remaining over 40 per cent voting against it. Negative

Lemon Tree Hotels (LTHL): The company has announced its latest signings Lemon Tree Premier, Navi Mumbai, Maharashtra and Lemon Tree Hotel, Jalgaon, Maharashtra. The properties shall be managed by Carnation Hotels Private Limited, a wholly-owned subsidiary of LTHL. Lemon Tree Premier, Navi Mumbai, Maharashtra will feature 67 rooms along with other amenities, while Lemon Tree Hotel, Jalgaon, Maharashtra will feature 100 rooms along with other amenities. These properties will be in addition to LTHL’s 14 operational and 7 hotels in pipeline in Maharashtra. Positive

SPML Infra: The company has secured a Rs. 385 crore project under the Jal Jeevan Mission for developing the Water Production & Supply System in the Kekri-Sarwar Sector (Package-III) in Ajmer, Rajasthan. The project is part of the company’s regular business operation. Positive

JSW Infra: The company has received an LoI for the approved resolution plan of NCR Rail Infra, which operates a private freight terminal in Khurja, UP. The asset includes six rail lines, two warehouses (~0.2 mn sq. ft.), and ~130 acres of land. Final implementation is subject to NCLT and other regulatory approvals. Positive

Enviro Infra Engineers: The company has secured a Rs. 400 crore project from MIDC for pollution control of the Panchganga River through upgradation of CETPs with Zero Liquid Discharge (ZLD) in Kolhapur. The 24-month project involves design, construction, commissioning, and O&M. The order marks EIEL’s foray into advanced wastewater treatment technologies, including Ultrafiltration, RO, and MVR (Multiple Vapor Recompression). Positive

WEAK RESULTS

Indian Renewable Energy Development Agency Ltd (IREDA): The company’s consolidated net profit de-grew by 36% at Rs. 247 crore in Q1FY26. However, NII up by 36% at Rs 691 crore versus Rs 508 crore. Loan disbursements strongly increased 31% year-on-year to Rs 6,981 crore. Outstanding loan book reached Rs 79,941 crore as of June 30, 2025, marking a rise of 27% over a year-ago period. However, asset quality deteriorated, with gross NPA rising to 4.13% from 2.45% in the March quarter, and net NPA increasing to 2.05% from 1.35%. View – Asset quality deterioration led for higher credit cost, impacting profitability, Negative

Tata Elxsi Q1 Result Highlights (QoQ): Revenue declined of 3.9% q-o-q in CC with reported revenue in rupee terms down 1.8% to Rs 892.10 crore versus Rs 908.34 crore. EBIT down 11% to Rs 162.44 crore versus Rs 182.97 crore. EBITDA Margin at 20.9 % compared to 22.9% in Q4FY25. Net Profit down 16% to Rs 144.37 crore versus Rs 172.42 crore.

MACRO WRAP

·        The S&P 500 and Nasdaq closed the day 0.3% d/d and 0.1% d/d up, milder than the 0.4% d/d rally in the Dow, Yields rebounded 0-3bps (prior: -5 to -7bps) across the board and the benchmark 2Y- and 10Y yields closed the day at 3.87% (+3bps) and 4.35% (+2bps). Similarly, 10Y European sovereign bonds were mostly higher by 2-4bps, after closing 0-2bps lower the day before, , the DXY firmed to 97.92, WTI plunged 2.7% d/d to $66.57/barrel, while Brent slid 2.2% d/d to $68.64/barrel.

·        Trump to impose 35% tariff on goods from Canada and said that EU will be next to receive their letter. The other countries will pay a blanket 15% or 20% tariff. US Initial jobless claims were lower-than-expected coming in at 227k for the week of 5 July from 232k the previous week, while continuing claims were in line with expectations 1965k for the week of 28 June.

·        Crude Oil fell over 2% as Trump’s escalating tariff threats sparked global growth concerns. Brent settled at $68.64, WTI at $66.57. Tariff letters hit Brazil, Japan, South Korea and others. Markets remained cautious, given Trump’s unpredictability. Fed minutes showed limited support for near-term rate cuts. OPEC+ plans a September output hike but may pause in October. Sentimentally positive for OMC’s and Indian rupee.

·        Economic data watch: it’s a lighter data day ahead with tariff headlines likely to be the bigger focus.

INVESTMENT CALL

First Cut: TCS Q1FY26 results: Miss on revenue but margin beats estimate. Strong deal TCV.

• TCS reported revenue degrowth of 3.3% q-o-q in constant currency (CC), missing our soft estimates of 0.4% q-o-q decline in CC, chiefly led by ramp down of BSNL deal. International revenue declined 0.5% q-o-q in constant currency. Reported revenue was down 0.6% q-o-q/1.1% y-o-y to $7,421 million, missing our estimate of $7,587 million. Revenue in rupee terms stood at Rs. 63,437 crores, down 1.6% q-o-q/ up 1.3% y-o-y.
• EBIT margin improved ~30 bps q-o-q to 24.5%, beating our estimates of 24.3% aided by better revenue quality, reduced third-party expenses, and currency tailwinds. Net profit stood at Rs.12,760 crore, up 6% y-o-y/4.4% q-o-q, aided by margin expansion and Rs 600 crore one-off from income tax refund interest.
• Order book TCV stood at $9.4 billion, up 13.3% y-o-y stood above company’s comfort range of $7-9 billion with North America TCV at $4.4 billion, BFSI TCV at $2.5 billion and Consumer Business TCV at $1.6 billion. Book to bill stood at 1.3x.
• FY26 international revenue is expected to be better than FY25 based on the order book, customer conversations and demand for multiple service lines
• On a sequential basis, Technology and services grew by 1.1% while Manufacturing grew marginally by 0.2%. BFSI declined by 0.5%, Consumer business declined by 2.2%, life sciences and healthcare declined by 1.2%, communication media declined by 3.1% and ERU declined by 0.6%.
• LTM Attrition rate was up by 50 bps to 13.8% in Q1FY26 from 13.3% in Q4FY25, slightly above the company’s comfort range. Net headcount additions stood at 5090, taking total headcount to 613,069.
• We have Buy rating and will come out with a detailed note.

Result Summary                                                                                                   Rs Crore

Actual Vs Estimates                                                                       Rs Crore

Sector Update – Capital Goods and Power Q1FY2026 Earnings Preview: Strong execution to continue driving growth

·        Our universe is likely to report ~18.7% y-o-y revenue growth in Q1FY2026. Most project[1]based companies would post healthy double-digit revenue growth backed by strong order book. Product-based companies would witness stable growth of ~15.2% (ex-EMS companies Dixon and Amber).

·        OPM would remain flat at 11% showcasing a decline of 12bps y-o-y. Net profit is expected to grow by ~15.4% y-o-y, driven by healthy revenue and operating leverage.

·        Power companies in our coverage are expected to report Revenue/EBITDA/PAT growth of 1.5%/1.5%/5.4% y-o-y. Company-wise PAT growth is as follows: NTPC - 4.4% y-o-y, Powergrid – 5.8% y-o-y, Tata Power – 7.1% y-o-y, CESC – 8.5% y-o-y.

·        Preferred Picks: Project-based companies - We prefer BEL, HAL, KOEL, Triveni Turbine, KEC International and Kalpataru Projects; while in EMS - Dixon Technologies, Amber Enterprises and consumer electricals (products) space, we prefer, Polycab India, KEI and V-Guard. In power, we like NTPC, Powergrid and Tata Powe.

OTHER NEWS

SBI: Meeting of the Central Board of bank is scheduled to be held on Wednesday, 16th July 2025, inter alia, to consider and seek approval for raising funds during FY26 by way of issuance of Basel III compliant capital bonds in INR.

Birla Corp: The Government of Rajasthan has declared the company as the ‘Preferred Bidder’ for the Tadas Limestone Block-II in Nagaur district, spanning 160.39 hectares, at a final bid price of 63.50%.