A pandemic may test your patience: Be firm and buy Low:
The pandemic Covid ’19 appears to re-enter in disguise world over, India being not an exception, may pose a temporary distraction to the investors from the point of view further investment into the markets but let us not deny the fact that the undercurrent is fundamentally strong. Although TCS has done reasonably well despite many threats from the business and health sectors, there is a small correction in its valuations and the same may rebound in the days to come. So it may not be inadvisable to do some bottom-fishing in the market of some selected shares particularly of Profitable PSBs, Pharma, I.T etc.,
While the second wave of the pandemic is a cause of concern, it does not warrant a panic reaction in the market. Lockdowns & restrictions will only be localized and unlikely to severely impact economic recovery. The fact that we have vaccines will pre-empt extreme fear and panic. Also, businesses have learned to adapt to the new normal. TCS’ results confirm that we are in a multi-year upcycle in IT. So it makes sense to remain invested in top-quality IT names along with pharma. Bank Nifty is down 18% from the peak on asset quality concerns arising out of the second wave. Weakness in the Financials segment will give opportunities to investors to buy high-quality names in leading banks, mortgage and fintech companies”
Recent correction is indeed a buying opportunity; IT, pharma good defensives:
Analysts believe that the recent correction in the market is a buying opportunity. According to them, IT and pharmaceuticals are good defensives to have in a portfolio. “As the vaccine rollout accelerates, as we are seeing in places like the UK and the USA, these things do not last very long and therefore, this is a buying opportunity,” Sanger said in an interview with CNBC-TV18. On sectors, Sanger said, “IT and pharma are good defensives in a portfolio to have and they have done well. We like some of the banks like ICICI Bank, Axis Bank, and State Bank of India (SBI), and we like some of the high-quality non-banking financial companies (NBFCs).”
TCS share price drops 4% post Q4 results, profit-booking; IT index dips 2%
Tata Consultancy Services (TCS) share price dropped nearly 4 percent on Tuesday after the IT major’s March quarter results came in below analysts’ expectations and as investors took to profit-booking. The company reported a 6.26 percent YoY rise in its consolidated net profit at Rs 9,246 crore in Q4. The profit, however, was slightly lower than CNBC-TV-18’s estimates of Rs 9,317 crore. The stock fell as much as 3.7 percent to its day’s low of Rs 3,210.8 per share on the BSE. The sentiment impacted other IT stocks as well with the sectoral gauge also down 2 percent. Infosys, MindTree, Tech Mahindra, Mphasis and Coforge also lost over 2 percent each following TCS’ results.
Among brokerages, Credit Suisse and Macquarie have an ‘outperform’ rating on TCS after the country’s largest software services exporter reported its March quarter numbers.
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