Hello there, Espresso Lovers. Relieved that the weekend is here? You bet we are. With the kind of week that went by, one could only count down to the weekend, which, with absolute certainty, will feel like it went past by the time you finish reading this episode!
Mereko to aisa Dhak Dhak ho rela tha when the first ticks of the indicative closing price flashed on Friday during the Closing Auction Session. They were below 22,421, the level the Nifty needed to close above to prevent a ninth straight weekly loss. A cat has nine lives; the Nifty does not need nine red weekly candles for sure! While we sat before our screens, just the way we wait for India to win the World Cup final, the heavens chose to have some mercy on the bulls. It was a weekly gain. Even if it was just 100 points, even if it was short-covering, a dead-cat bounce, whatever, it was a green tick. And as we say in cricketing terminology, inside edge or outside edge, it still went to the boundary. We’ll take it.
At the end of every family drama Hindi film, it is the proverbial Khota Sikka (black sheep) that turns out to be the hero and the knight in shining armour. Indian IT stocks have been the same Khota Sikka for our markets in 2026. Beaten out of shape, they led the market gains on Friday, ensuring that a green candle appeared on the Nifty chart. TCS’ results infused some sense of optimism. It turned out to be the “no bad news is good news” kind of quarter. Adding to the optimism was the sell-off in AI stocks on Wall Street after OpenAI’s revenue disclosure fell short of expectations. The street liked it, and for one day, every other headwind was forgotten. Who are we to complain!
Happy, emotional music started playing in the background, similar to the one in a Hindi film when a mother found her long-lost child after 25 years, when Trent reported 23% revenue growth in its provisional business update for the quarter. Quarter after Quarter of delivering revenue growth that disappointed the street, which left no mercy in bashing the stock after every business update, the 23% number indeed felt as if it had come after 25 years! For a change, the stock was up 12% the following day and ended the week as the third-best Nifty 500 performer. We’ll stop short of using the “FORM IS TEMPORARY, CLASS IS PERMANENT” analogy simply because this should not be a one-off. When consistency comes, analogy will follow, ma broda! Analogy kahaan jaane wali hai! Still a beaten-down stock, still away from 52-week highs, well away from record highs, the Trent bulls would now hope that it finally clicks to deliver all-round performance, thereby taking the stock back to its previous days of glory. That’s our stock of the week!
Once upon a time, there was a character named Shehenshah, who was rishte me sabka baap, made his own laws, caught criminals himself, heard their cases himself, and punished them himself too. And then there is Donald Trump. The biggest proponent of the odd-even scheme, and he doesn’t even live in New Delhi! On an odd day, he says no deal with Iran; on an even day, he says we are having “productive negotiations” with them. One day he will bash Russia; the next day, strike a deal with them to buy their oil and diesel. Wait a minute! Did they not pass a “Lindsey O. Graham Sanctioning Russia and Iran Act of 2026?” that allowed him to impose tariffs of as much as 100% on countries that brought Russian oil and their products? So will President Trump impose tariffs on the US as well? Is the US now going to be funding Russia’s war machine, as many countries, including India, have been accused of? We would love to see the Administration defend this one. Many memes loading. Brace yourselves.
Jefferies is starting to favour largecaps over the broader markets because the risk-reward appears more favourable. Unfortunately, there has only been risk, with barely any reward for a largecap investor over the last few years. The index, from its September 2024 peak, is down, most of the stocks have delivered negative returns, and some relentless FII selling continues to pressure these names time and again.
During Editor’s Playbook on Friday, we were trying to decode whether HRITHIK will dance again. Back in the day, the HRITHIK stock portfolio was a well-known market acronym comprising HDFC Bank, Reliance Industries, ICICI Bank, TCS, Hindustan Unilever, ITC and Kotak Mahindra Bank. But just as our OG Hrithik has delivered one dud after another in recent times, the HRITHIK stock portfolio has been a dud too. A film that hit the theatres at 9 AM on Friday and was pulled down by 3 PM. Many years, zero returns. HDFC Bank down 11% in the last five years, HUL down 30%, TCS down 45%, Kotak up 13%, ITC up 15%. The only one that has stood out here is ICICI Bank, which is up 90%.
Everybody has had a rough time trying to remain convinced about investing in largecaps. Valuations have corrected. Most of these stocks are trading below their historical averages. In an ideal time, these would be what analysts call “Screaming BUYS”. But we live in times that are anything but ideal. Still no buyers for them. HRITHIK is still struggling. And since HRITHIK commands a significant weightage on the Nifty, the index is struggling too. This is not only a test of investor patience, but also a test of analysts who continue to ascribe “buy” ratings on them with lofty price targets. HDFC Bank is still a near-consensus “buy”. M&M, which is at a 52-week low, has no “sell” ratings. 90% of the analysts who track Maruti, also at a 52-week low, have a “buy” rating on it. Investors should also start a Make HRITHIK Dance Again campaign, maybe then the tide turns for them!
You may want to keep watching Geopolitics, but the real market mover has arrived again. It’s EARNINGS TIME BABY! And contrary to the first quarter, where there were absolutely zero expectations and the results turned out to be 1 to 1.5 or even 2 versus the zero expectations, this time around, there are expectations. That results will be good. There will be healthy topline growth; there will be healthy profitability growth. However, margins may be under pressure, as we saw in the case of TCS, but that might also be on a case-by-case basis. The problem of expectations is that when you fall short of them, the punishment is a severe one these days. Earnings miss ki sazaa milegi. Barabar milegi. We know the drill.
TCS has set the ball rolling with the IT results, and the onus is now on Wipro, HCLTech, Tech Mahindra and Persistent Systems to justify the optimism that TCS has infused in the minds of investors, that it is not doomsday for Indian IT afterall. It may take time, but they’ll find their own niche in a world obsessed with AI. Besides these, HDB Financial, Bajaj Consumer, CEAT, ICICI Lombard, Karur Vysya Bank, Nestle India, among many others, will also be declaring their results. And then, of course, comes SUPER SATURDAY again when every bank decides in unison to report results. For now, Axis Bank, HDFC Bank, ICICI Bank and Yes Bank are on the list along with some other non-bank lenders. Don’t be surprised if more get added to this list. We’re ready. You’ll get ready too!
To all the largecap and stock market investors who have not made much or have lost money during the last two years, we know it has been painful, we know it hurts, we know it has been a test, but while it is easy to throw in the towel, courage and optimism also comes with a price. Just as the good times don’t last forever, the bad times won’t last forever either. And what better song to summarise this than this one, which was the anthem of us boys during school days – “Fatela Jeb Sil Jayega, Jo Chahega Mil Jayega, Tere Din Bhi Aayenge Chote, Accha Khasa Hil Jainga. Rukneka Nahi, Thakneka Nahi, Life Me Chalte Rehneka!” Whether this is to comfort the underperforming largecaps or to those who are still invested in them, it goes both ways.
It’s time for Durga Puja, and we can only pray to Maa Durga that the Mahishasura of losses sees its Vadh at the earliest and the bleeding portfolios turn green again! We’ll see you next week, but on SUNDAY this time because of our Super Saturday. So do like, share and subscribe to our Espresso and follow us on our Social Media Handles! Until then, lights will guide us home!