EUR 120.00 For Business Accounts Only

MOSL: MOrning India (4/July/22): 1. Technology - 1QFY23 Preview (1Q dragged by margin and cross currency headwinds); 2. Oil & Gas; 3. HDFC; 4. Avenue Supermarts; 5. IndusInd Bank; 6. Federal Bank; 7. CSB Bank;

Technology (1QFY23 Preview): 1Q dragged by margin and cross currency headwinds

• Our IT Services coverage universe should witness modest median USD revenue growth in 1QFY23E (up 3.3% CC QoQ and 14.3% YoY). EBIT/PAT growth (-1.0%/ -2.8% QoQ) should see further pressure due to wage hikes and continued supply side pressure despite depreciation in INR against USD.
• We would be watchful for any moderation in demand commentary. We expect initial signs of impact in sectors like Retail and Manufacturing in Q1. Reported USD growth will be hit by 1-2% due to significant appreciation in EUR/GPB against USD during Q1.
• While the long term demand environment remains unaltered, we anticipate impact in H2FY23 and FY24 due to elevated inflation and slowdown in macro- economic growth in both US and Europe and are trimming our FY23/24 INR EPS numbers by 2-5% despite 300-400bps positive impact from lower INR (79/USD).

Piping hot news

Govt imposes windfall tax on oil producers, raises import duty on gold

The Centre on Friday slapped a windfall tax on domestic crude oil producers, imposed export duties on petrol, diesel and aviation turbine fuel (ATF), and hiked the import duty on gold in efforts to reduce pressure on the rupee, rein in the current account deficit (CAD), and increase the domestic supply of petroleum products. The government also imposed special additional excise duties of Rs 6 and Rs 13 per litre on the export of petrol and diesel, respectively, following a shortage of the fuel for almost a month. A majority of private outlets had stopped fuel supplies, forcing the government to resort to expanding the universal service obligations (USO) to the private sector as well. The USO required them to maintain supplies at specified working hours and at “reasonable prices”.