Running out of steam

NIFTY50: 19,384 ▼ 55 (-0.2%)
SENSEX: 65,393 ▼ 223 (-0.3%)

Hello, friends!

Bears are known to be curious creatures. One such bear was found wandering the campus at the University of Colorado, causing a temporary shutdown. Wildlife officers later found the bear perched in a tree and safely relocated it back to natural territory. Bears are making their presence even in the markets, which snapped their two-day winning streak. More on that later.

• Benchmark indices closed lower after a choppy trading session
• In all, 35 of the NIFTY50 stocks closed in the red
• India’s retail inflation increased to 4.81% in June from 4.25% in May 

Among the NIFTY sectoral indices, PSU Bank (+0.8%) and Media (+0.4%) were the top gainers, while IT (-0.7%) and Bank (-0.2%) were the top losers.

What’s trending

⭐ TCS reports double-digit Q1 growth

For the June quarter, IT services major Tata Consultancy Services (TCS) reported a 12.6% YoY rise in consolidated revenue to ₹59,381 crore. Meanwhile, its net profit jumped 16.8% to ₹11,074 crore. Further, the company’s attrition levels dipped to 17.8% from 20.1% in March quarter. The company also announced an interim dividend of ₹9 per share.

⭐ Wipro to invest $1 billion on AI

IT major Wipro has committed to investing $1 billion into artificial intelligence (AI) over the next three years. It aims to develop its ai360 service as an end-to-end ecosystem for AI integration. However, the company’s shares were down by almost 0.3% today.

⭐ Lupin soars on receiving USFDA report

Lupin shares rose today by almost 3% after the pharma major received an EIR (Establishment Inspection Report) from the USFDA. The EIR with the ‘satisfactory’ status was issued after an inspection of the Pithampur Unit-2 facility that manufactures oral solids and ophthalmic dosage forms.

⭐ Zen Technologies jumps 20% on order win

Aerospace defence solutions provider Zen Technologies shares jumped 20% after the company bagged a significant order win in the export market valued at ₹340 crore. This is the company’s second major order win this month after bagging a ₹160 crore order on 7 July from the Ministry of Defence.

In Focus

Gaming stocks stumble on GST hurdle 

The Goods and Service Tax (GST) Council, in its recent meeting, decided to levy 28% GST on online gaming, horse racing and casinos. This decision was a major setback for the online gaming industry, with all listed stocks seeing sharp declines today. How will this development change the industry landscape? Let's find out.

GST on full value of transaction  

Previously, online betting and gaming was taxed at 28% on gross gaming revenue (GGR) and not on the money deposited by players. GGR refers to the difference between the amount of money players win and the amount that they bring in. However, after the recent announcement, GST will be applicable on the total amount of money deposited by players also known as contest entry amount (CEA).

Stocks witness drastic fall

Following the announcement, shares of Delta Corp closed nearly 23% lower, and the company lost nearly ₹1,500 crore in market capitalisation. The decision was a double blow to the company as it operates casinos as well as real-money apps though its subsidiary Deltatech Gaming. Meanwhile, shares of Nazara Technologies were down over 14% intraday, but covered some lost ground after its management said tax levy to have minimal impact on overall revenue. 

Move could discourage users 

As per industry experts, the GST Council decision may discourage players from online gaming. For instance, users who bring in ₹100 as CEA will be left with ₹72 after GST, leading to lower participation. This could also lead users to illegitimate or gaming platforms based in other countries, which tax the activity based on GGR. 

Industry could see reduced investments

The online gaming industry is one of the fastest-growing sectors within India’s digital ecosystem with multiple companies reporting profitability. As a result, it attracted significant capital, including that from VC firms. However, this decision could lead to less capital inflow into these companies and also limit their ability to expand business or develop new games and technologies. 

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