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Equity Futures: Put writers inactive on LTIMindtree before earnings

Informist, Tuesday, Oct 17, 2023


By Anjana Therese Antony


MUMBAI – The options chain of LTIMindtree showed that 5,050 rupees strike price could be a strong support ahead of the company’s Jul-Sep earnings that are scheduled on Wednesday. “Put writers don’t really seem confident about the stock,” said a technical and derivatives analyst at a domestic bank-sponsored broking firm. 


A massive surprise is not expected for the stock as earnings are largely anticipated to be in line with market view, the analyst added. “In case of a surprise, 5,300 rupees could be a hurdle for the stock.”


For Jul-Sep, the company’s consolidated revenue is seen up 2.0% on quarter at 88.73 bln rupees, while net profit is likely to have fallen 1.7% on quarter to 11.32 bln rupees, according to an average of estimates from 11 brokerage firms. This translates into a year-on-year rise of 7.9% in revenue, but a 4.8% decline in net profit. 


Today, shares of LTIMindtree closed nearly 1% higher at 5,213.75 rupees. 


On the puts side, the premium of 5,050 strike price expiring on Oct 26 declined by 31% to 49.20 rupees. The premium of 5,100 strike price also declined by 30% to 62.25 rupees. 


Meanwhile, on the calls front, the premium of 5,200 rupees strike price rose by 10.8% to 129.95 rupees. This level had the highest addition of open interest. The premium of strikes above this level rose marginally, with that of 5,300 strike increasing by 7% to 82.55 rupees. 


Various broking firms believe the company may report better revenue growth compared to its larger peers, but its net profit is unlikely to indicate a growth as the recent salary hikes could hit the bottomline.


Amid the earnings season, the overall equity market is likely to trade in a thin range on Wednesday. Some analysts said investors are likely to continue to focus more on global cues until more domestic firms come out with their quarterly results. For the benchmark Nifty 50 index, the near-term resistance is pegged at 20000 points and 19800 is seen as a strong support.


Today, Nifty 50 and Sensex closed 0.4% higher each at 19811.50 points and 66428.09 points, respectively. 


“There could be short covering towards 20000 points (of Nifty 50) if there will be a gap-up open tomorrow (Wednesday). Writers are active at 19800 and 19850 strikes,” another derivatives analyst said. 


Amid optimism, the October futures contracts of the Nifty 50 closed 0.4% higher at 19809.00 points and open interest rose by 1.9% to 9.51 mln.


–Nifty 50 Oct closed at 19809.00, up 68.60 points; 2.50-point discount to spot index

–Nifty 50 Nov closed at 19933.00, up 64.80 points; 121.50-point premium to spot index

–Nifty 50 Dec closed at 20036.55, up 62.40 points; 225.05-point premium to spot index


HDFC bank, Maruti Suzuki India, Bajaj Finance, Tata Motors, Reliance Indutries, State Bank of India, ICICI Bank, Polycab India, Infosys, Coal India, and IndusInd Bank were among the most actively traded underlying stocks. End


Edited by Vandana Hingorani



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Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.


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Source: Cogencis

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