SENSEX (28102) BSE Sensex opened positive and was hovering near 28350 levels. However, it witnessed sharp selling pressure in the final hours of the trade and ended the session with the loss of around 135 points. Now, the index needs to hold above 28100 levels to witness support base buying towards 28300 and 28500 levels. However, if it fails to hold 28000 levels then bears may drag the index towards 27800 levels.
Stocks in Focus
eClerx posted strong numbers, led by improved operational performance in its 1QFY16 results. Revenue stood at US$46.4mn, 14% qoq based on ~11% impact of CLX integration and 3.4% growth in organic terms.
We note the accelerated growth in top-5 accounts, which grew at the fastest in the last 6 quarters on yoy basis. Operating margins improved to 29.9%, +661bp qoq, which mitigated the impact of wage hike during the quarter.
PAT stood at Rs.734mn, supported by higher Forex gains, favorable currency (+220bp margin impact), margin improvement on lower SG&A and change in amortization policy (+100bp impact on EBIT margin).
We continue to remain positive on eClerx based on
- sustainability of operating margins,
- continued growth momentum in emerging accounts,
- strong pipeline for cable business,
- digital growth opportunities & CLX synergies.
Positional Pick
Tata Communications once again reversed from its 200- days SMA and closed on six day’s highest level.
We believe, the stock will soon resume its uptrend and jump above the prior swing high of Rs.490 & Rs.505 levels in the short term rise in daily Stochastic (5,3) from its oversold zone and upturn in RSI (14,9) from 40-mark are signaling limited downside left for the stock and currently, in favor of probable price rise.
Thus, for today’s trade, long position can be initiated only in Rs.440-430 range for target
of Rs.490-505 with a closing based stop loss of Rs.410.
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