Upbeat quarterly results key to markets sustaining momentum: Kotak Securities

Trading will commence next week in the backdrop of a slew of negative cues, both domestic and global. India's second-largest IT services exporter Infosys kicked-off Q4 earnings season on a disappointing note on Thursday (April 13). Quarterly results of blue-chip companies will have to be upbeat if the stock market rally has to be sustained, even as rising geo-political tensions in the Korean peninsula pose a significant risk to global stock markets.

"Going ahead, markets will focus on the quarterly results. Valuations are high and quarterly results will need to meet or beat expectations, if markets have to sustain at current levels and move up. Management commentary on the lingering impact of demonetization and their outlook for FY18 will be key factors to watch out for," Dipen Shah, Sr. Vice President - PCG Research at Kotak Securities Limited, said in a note on Saturday.

Companies that will be declaring their Q4 and FY2017 results next week include TCS on Tuesday (April 18), followed by Yes Bank (April 19), Cyient and Mindtree (April 20) and HDFC Bank (April 21).

Infosys's Q4 net profit has remained almost flat at Rs 3,603 crore while revenues rose 3.4 percent to Rs 17,120 crore, YoY. In dollar terms, Q4 revenues came in at $2,569 million.

The company had reported Rs 3,597 crore in net profit and Rs 16,550 crore in revenues in the corresponding quarter of 2015-16 (Q4, FY2016). For the full-year 2016-17, revenues increased 8.3 percent in constant currency terms to $10,208 million and net profit, to $2,140 million.

Infosys gave dollar revenue guidance in the range of 6.5-8.5 percent in constant currency terms for 2017-18.

In related news, India's external trade was upbeat for March 2017, with exports rising 27.5 percent YoY to $29.3 billion though imports jumped by 45.2 percent to $39.7 billion, leaving a trade deficit of $10.4 billion for the month. Gold imports spurted 329 percent to $4,177 million from $973 million in March 2016, according to provisional data released by the commerce and trade ministry.

For the financial year 2016-17, exports rose 4.71 percent to $274.64 billion from $262.29 billion in the preceding fiscal while imports dropped 0.17 percent to $380.36 billion from $381 billion in 2015-16. The trade deficit for 2016-17 stood at $105.7 billion.

During the truncated week ended April 13, TCS lost Rs 19,556 crore to end with a market capitalization of Rs4,58,686 crore while Reliance Industries saw an erosion of Rs 13,387 crore to close at Rs 4,43,595 crore.

On April 13, the BSE Sensex ended 182 points lower at 29,461, while the NSE Nifty lost 53 points to close at 9,151.

India's foreign exchange reserves fell $956 million to $368.99 billion as of April 7, according to RBI's weekly statistical supplement released on Friday evening.

The Indian rupee closed at 64.41 to the US dollar on Friday, while gold and silver prices remained unchanged on Saturday and closed at Rs 29,950 per 10 gm and Rs 43,000 per kg, respectively.