Infosys, HCL Tech, L&T Infotech, Granules, Laurus Labs hit record highs

Reliance Industries, Larsen & Toubro Infotech and Dr Lal Pathlabs from S&P BSE500 index hit record highs today.

Shares of three information technology (IT) companies – Infosys, HCL Technologies and Larsen & Toubro (L&T) Infotech – hit their respective record highs on the BSE on Wednesday after IT services major Wipro reported a better-than-expected performance in June quarter of FY21 (Q1FY21), as its profitability improved despite a contraction in revenues on a sequential basis.

Besides, Reliance Industries, Granules India, Laurus Labs, Dr Lal Pathlabs, and Coromandel International from the S&P BSE 500 index too touched their respective record highs today. These stocks rallied by up to 8 per cent during the session. In comparison, the S&P BSE Sensex was up 2 per cent at 36,739 points at 11:19 am.

Infosys, the top gainer among these stocks, surged 8 per cent to hit a new high of Rs 848 on the BSE, after Vanguard on Tuesday announced it will partner Infosys as part of its ongoing strategy to enhance and evolve its full-service defined contribution (DC) business.

“This deal will involve taking over 1300 employees of Vanguard. They will be paid the same salary for 12 months. Hence, we believe the deal would be margin dilutive in the near term. However, it is positive from a long term perspective,” the brokerage firm ICICI Securities said.

Meanwhile, after peers Tata Consultancy Services (TCS) and Wipro, Infosys is scheduled to release its financial results for the April – June quarter of the fiscal year 2020-21 on Wednesday, July 15. The IT major is expected to report subdued numbers due to disruptions caused by the Covid-19 pandemic. However, the fall in the earnings before interest and tax (EBIT) margin could be limited due to the benefit from rupee depreciation, cut in travel costs, and optimisation on variable costs, according to analysts. CLICK HERE TO READ FULL REPORT

The board of directors of L&T Infotech is also scheduled to meet today to consider the un-audited financial results of the company for Q1FY20. The company remains a strong Tier II player backed by strong and stable leadership and execution track record, which reflects in the steady rise across client revenue buckets and a steadier margin profile (unlike volatility seen in most Tier II techs as well as a few in Tier I), say analysts.

Granules India was up 6 per cent at Rs 249 in intra-day trade, gaining 19 per cent in the past one week. The pharmaceutical company is scheduled to announce its Q1FY21 numbers on Friday, July 17. Analysts at Emkay Global Financial Services expect a relatively strong quarter for Granules led by deferred sales from Q4 and operating leverage.

“Strong revenue growth will be led by the resumption of Paracetamol exports and deferred sales from Q4. Margins should improve QoQ due to higher US$ realizations, higher contribution from formulations, and US$ 3 million one-off impairment charge in Q4 base,” the brokerage firm said in the pharma sector update.

Laurus Labs hit a new high of Rs 636.90, up 3 per cent today, surpassing its previous high of Rs 634 recorded on June 12, 2017. The company is leveraging its API skills and forward integration capabilities to supply finished dosages, which would enable it to expand margins. The Formulations business led by Low Middle-Income Countries (LMIC) tenders delivered significant growth in a very short time.

“With an enhanced focus on growth opportunities arising from LMIC markets, the contribution from the Finished Dosage Forms (FDF) business is expected to improve. The API division maintained its growth pace due to the addition of new high-value products,” the management said in the 2019-20 annual report.

Going forward, the company has a solid foundation in place and, with its streamlined and strengthened portfolio; the company is well-positioned in attractive markets, it said.

COMPANY

LATEST ALL TIME HIGH PREV HIGH PREV DATE COROMANDEL INTER 770.55 783.40 778.35 08-Jul-20 DR LAL PATHLABS 1928.35 1935.00 1922.90 14-Jul-20 GRANULES INDIA 245.25 248.90 244.85 13-Jul-20 HCL TECHNOLOGIES 617.60 627.80 624.00 17-Feb-20 INFOSYS 832.75 848.00 847.40 06-Sep-19 L & T INFOTECH 2274.00 2308.00 2252.40 14-Jul-20 LAURUS LABS 634.15 636.90 634.00 12-Jun-17 RELIANCE INDUSTR 1962.60 1964.50 1947.00 13-Jul-20