Market Performance - Stock markets closed lower for the third consecutive session, with the benchmark Sensex dropping nearly 314 points due to selling in IT and auto shares as foreign fund outflows dampened investor sentiment [1] - The 30-share BSE Sensex fell by 313.70 points or 0.37 percent to settle at 84,587.01, with 24 constituents closing lower and six gaining [3] - The 50-share NSE Nifty declined 74.70 points or 0.29 percent to 25,884.80, having dropped 307 points or over 1 percent in three sessions since Friday [4] Sector Performance - Major laggards among Sensex stocks included Tata Motors Passenger Vehicles, Trent, Infosys, Power Grid, HDFC Bank, HCL Tech, Kotak Mahindra Bank, ICICI Bank, and Bajaj Finance [4] - Gainers included Bharat Electronics, State Bank of India, Tata Steel, Eternal, Bharti Airtel, and Reliance Industries [6] Institutional Activity - Foreign institutional investors (FIIs) offloaded equities worth Rs 4,171.75 crore on Monday, while domestic institutional investors (DIIs) bought stocks worth Rs 4,512.87 crore in the previous trade [6] - The domestic market experienced sharp volatility driven by a weakening INR and continued FII outflows [6] Investor Sentiment - Caution prevailed as investors awaited clarity on a possible rate cut in the upcoming FOMC meeting and progress on the Indo-US trade deal, despite some improving signals [7] Global Market Context - In Asian markets, South Korea's Kospi, Japan's Nikkei 225 index, Shanghai's SSE Composite index, and Hong Kong's Hang Seng index settled in positive territory [8] - Brent crude, the global oil benchmark, dipped 0.69 percent to $62.93 per barrel [8]

HDFC Bank, The S&P BSE Sensex dropped 314 points, or 0.37%, to close at 84,587 while the NSE Nifty 50 declined 75 points, or 0.30%, to settle at 25,884.In the 30-share Sensex pack, only BEL, SBI, Sectorally, Nifty IT, Auto, FMCG and Oil & Gas were the top drags, falling up to 0.6% on November 25. Infosys, TCS, On the flipside, Nifty PSU Banks were the top Canara Bank, Live EventsExpert views "The domestic market witnessed sharp volatility on monthly expiry day, driven by a weakening INR and continued FII o ...

Core Points - The TCS-DXC technology case involves a trade-secret lawsuit where Tata Consultancy Services (TCS) was found liable for misappropriating trade secrets from Computer Sciences Corporation (CSC), now part of DXC Technology [4][5][13] Summary by Sections Legal Proceedings - CSC alleged that TCS accessed its confidential materials while working for Transamerica and used this information to secure a $2.6 billion contract and expedite the development of its BaNCS platform [3][4] - The US district court ruled against TCS, awarding $56 million in compensatory damages and $112 million in punitive damages, which the appeals court upheld [6][8] Financial Implications - TCS is required to make necessary provisions in its financial statements to reflect the expected outflow due to the court ruling [10] - The financial impact, while significant, is considered a low single-digit percentage hit relative to TCS's annual profits, indicating it will not jeopardize the company's solvency [11] Brand and Market Perception - The ruling has raised concerns about TCS's brand credibility, especially given the finding of willful and malicious conduct [13][15] - Despite the legal challenges, clients are expected to focus on TCS's delivery record and security measures rather than solely on litigation outcomes [16][18] Industry Context - Trade-secret disputes are common in the IT sector, but serious verdicts against top-tier firms are rare, signaling the need for stringent internal controls [19][24] - The case emphasizes the importance of clear policies regarding the use of client information and the risks associated with rebadging employees [21][23]

Fund Performance - The FPA Queens Road Small Cap Value Fund returned 7.46% in Q3 2025, underperforming the Russell 2000 Value Index which returned 12.60% [1] - For the first three quarters of 2025, the Fund achieved a return of 13.77%, outperforming the index's return of 9.04% [1] - The fund's strategy focuses on a diligent, disciplined, and patient approach, expecting to outperform in down markets and lag in speculative markets [1] Company Overview: Science Applications International Corporation (SAIC) - Science Applications International Corporation (SAIC) is a government contractor providing engineering and IT services, with a revenue split of approximately 50% from defense and 50% from civilian agencies [3] - As of November 21, 2025, SAIC's stock closed at $85.17 per share, with a market capitalization of $3.992 billion [2] - The stock experienced a one-month return of -8.63% and a 52-week decline of 30.31% [2] Market Context and Challenges - SAIC's stock has been negatively impacted by government spending cuts promised by the Trump administration, leading to uncertainty among investors regarding the extent of these cuts [3] - The company reported a 3% decline in revenue and reduced fiscal year estimates during its September 4th earnings release, contributing to a significant sell-off of its shares [3] - Current valuation of SAIC is approximately 10 times earnings, which may reflect an overly pessimistic outlook on potential cuts to its programs [3] Investment Sentiment - SAIC is not among the 30 most popular stocks held by hedge funds, with 33 hedge fund portfolios holding the stock at the end of Q2 2025, down from 39 in the previous quarter [4] - While SAIC is recognized for its potential, certain AI stocks are viewed as offering greater upside potential with less downside risk [4]

Core Insights - Kyndryl has launched new AI-powered services that enhance managed services delivery for IBM Z customers, combining mainframe expertise with agentic AI and hybrid IT capabilities to improve application development and operational agility [1][2][3] AI-Powered Services - The new agentic AI mainframe services are designed to help IBM z/OS customers adopt innovative technologies, facilitating faster decision-making and simplifying complex processes in application and infrastructure management [2][3] - Kyndryl's AI services integrate with the Kyndryl Bridge platform, providing intelligent automation, predictive analytics, and insights across mainframe infrastructure and applications [4][5] Collaboration and Expertise - Kyndryl collaborates with IBM to enhance AI capabilities in core business systems, enabling clients to leverage advanced AI on mainframes for improved decision-making and operational agility [5][6] - The company utilizes its intellectual property and expertise in mainframe transformation, along with technologies from cloud hyperscalers, to drive innovation for customers [6][7] Market Insights - According to Kyndryl's 2025 State of Mainframe Modernization Survey, 88% of respondents have implemented or plan to implement AI in their mainframe environments, with expected benefits including increased business agility (37%), faster operational actions (32%), and cost savings (31%) [8][9] - The survey predicts that AI will generate $12.7 billion in cost savings and $19.5 billion in increased revenues over the next three years, with key use cases in performance enhancement, fraud detection, and security [9]

Company Overview - EPAM Systems, Inc. is valued at a market cap of around $10 billion and is a global provider of digital platform engineering and software development services, offering solutions in cloud and data services, customer experience design, cybersecurity, and full-cycle product development across various industries including financial services, retail, technology, healthcare, and media [1] Stock Performance - Over the past 52 weeks, EPAM shares have declined by 26.2%, while the S&P 500 Index has increased by 11%. Year-to-date, EPAM shares have dipped 22.6%, compared to the S&P 500's 12.3% return [2] - EPAM's stock has underperformed the Technology Select Sector SPDR Fund, which has seen over a 17% increase in the same period [3] Recent Financial Results - On November 6, EPAM reported stronger-than-expected Q3 2025 adjusted EPS of $3.08 and revenue of $1.39 billion. The company raised its full-year adjusted EPS forecast to between $11.36 and $11.44 and increased its expected revenue growth for 2025 to 14.8% - 15.2%, driven by strong demand in AI, cloud, automation, and modernization spending [4] Analyst Expectations - For the fiscal year ending in December 2025, analysts expect EPAM's EPS to rise 1.9% year-over-year to $9.04. The company has a promising earnings surprise history, having beaten consensus estimates in the last four quarters. Among 17 analysts covering the stock, the consensus rating is a "Moderate Buy," with 10 "Strong Buy" ratings, one "Moderate Buy," and six "Holds" [5] Price Target and Analyst Ratings - Mizuho analyst Sean Kennedy increased EPAM's price target to $228 while maintaining an Outperform rating. The mean price target of $209.40 represents a 15.7% premium to EPAM's current price levels, and the Street-high price target of $255 suggests a potential upside of 40.9% [6]

Core Insights - Two major Indian IT services companies, Tata Consultancy Services (TCS) and Wipro, are facing patent infringement lawsuits, indicating challenges in their service expansion efforts [1][6] - The Indian IT sector, valued at $283 billion, is already experiencing low demand for IT services, and the rise in patent disputes adds to the difficulties [1][6] Group 1: Patent Infringement Cases - Calibrate Networks LLC filed a lawsuit against TCS for allegedly using and selling technology that infringes on its patent related to software application naming [2][3] - The lawsuit claims TCS knowingly continued to use the patented technology even after being served with the complaint [4][6] - Wipro is facing a similar lawsuit from Mobility Workx LLC, which accuses it of infringing on three patents related to wireless testing and 5G services [8][9] Group 2: Legal and Financial Implications - Both TCS and Wipro are experiencing revenue declines, with TCS facing its first-ever revenue drop and Wipro undergoing a turnaround after two years of decline [23] - The ongoing legal battles may affect client confidence in scaling AI and cloud programs, as legal issues surrounding intellectual property can raise concerns during deal cycles [24] - TCS has recently been fined $194 million for trade secret theft, adding to the financial pressures faced by the company [6][21] Group 3: Industry Trends - The shift from traditional IT services to software and platform-based models has increased the risk of intellectual property violations for Indian IT firms [19][20] - Experts suggest that the frequency of patent disputes indicates that global patent holders are closely monitoring the Indian IT sector as it operates in higher value, higher IP zones [20]

Core Viewpoint - Tata Consultancy Services (TCS) faced a ruling from the US Court of Appeals for the Fifth Circuit, which upheld a previous damages decision amounting to $194 million in a trade secrets dispute with Computer Sciences Corporation (CSC), now part of DXC Technology Company [1][3]. Group 1: Court Ruling and Damages - The Appeals Court confirmed the District Court's decision on damages, which includes $56,151,583 in compensatory damages and $112,303,166 in exemplary damages [5]. - Additionally, TCS is liable for $25,773,576 in prejudgment interest as of June 13, 2024 [5]. - The court vacated an earlier injunction and instructed the District Court to reassess the injunction order based on the Appeals Court's guidance [2][3]. Group 2: Company Response and Future Actions - TCS stated that the judgment will not adversely impact its financials or operations and plans to make necessary provisions in its financial statements [5][6]. - The company is exploring options for review and appeal before appropriate courts to defend its position [6].

Investment Rating - The report indicates a positive outlook for various sectors within the technology and communications industry, particularly for 2026, with several companies expected to experience revenue growth and improved margins [1][5][20]. Core Insights - The memory price hike is anticipated to primarily affect low-to-mid end smartphone models, while high-end models are expected to remain largely unaffected [2][4]. - The upcoming foldable flagship smartphones are projected to drive significant upgrades in components such as UTG, hinge spindles, and heatsinks, with a notable focus on AI edge devices expected to launch in late 2026 [3][10]. - The adoption of 200MP CIS is expected to increase, particularly for telephoto and main cameras, contributing to a stronger performance in the semiconductor sector [4][15]. - The IT services and software sector is projected to see low-teen percentage revenue growth in 2026, with companies like Kingdee and ChinaSoft expecting significant improvements [5][16][17]. Summary by Sections Memory Market - Memory price hikes are expected to impact low-to-mid end models but not high-end models, with limited room for further ASP cuts [2]. Hardware - The foldable flagship smartphone is expected to drive upgrades in various components, with a focus on AI edge devices anticipated to contribute to revenue starting in late 2026 [3][10]. Semiconductors - The semiconductor sector is expected to see strong growth in 2026, driven by the adoption of high-resolution CIS and a shift towards computing and automotive segments [4][15]. IT Services and Software - Companies in the IT services sector, such as Kingdee and ChinaSoft, are optimistic about revenue growth in 2026, with expectations of AI-related projects contributing to this growth [5][16][17]. Smart Glasses and XR - The smart glasses market is expected to see significant growth, with total shipments projected to double in 2026, driven by demand from key US customers [13]. Automotive - The automotive sector is expected to experience growth, with companies like AAC and SO projecting significant revenue increases in 2026 [12]. Panelmakers - Panelmakers like BOE anticipate that upcoming sports events will boost TV LCD stocking and prices in 1Q26, alongside growth in IT replacement demand [11]. AI and Edge Computing - The AI edge device market is expected to present opportunities for companies involved in smart device manufacturing, with potential contributions from major players in the supply chain [10].

Company Developments - Marico's digital brands have surpassed Rs 1,000 crore in annual recurring revenue, with expectations that food and premium personal care will contribute 25% of its India revenue [4] - Tata Power has signed agreements to acquire a 40% stake in a special purpose vehicle for Rs 1,572 crore to develop the 1,125 MW Dorjilung hydro power project in Bhutan, which will be the largest public-private partnership hydro project in the country [6] - Adani Green has established two new subsidiaries to enhance its renewable energy operations in Gujarat [7] - Tata Consultancy Services (TCS) faced an adverse judgment from the US Court of Appeals regarding a legal dispute with DXC Technology, confirming damages but sending the injunction back for reconsideration [8] - Kotak Mahindra Bank announced a stock split of one share into five to make shares more affordable and increase retail investor participation [9] - Tata Chemicals' board approved an investment of Rs 910 crore for expanding manufacturing capacities at its plants in Mithapur and Cuddalore, including Rs 135 crore for dense soda ash production at Mithapur [10] Market Insights - Traders are advised to focus on sectoral rotation, particularly in the auto and banking sectors, while maintaining a stock-specific and risk-managed approach [1][12] - The market experienced a decline of nearly 0.5% amid weak global cues, with analysts suggesting that a sustained move above 26,250 could lead to a target of 26,500 [11]