Markets traded lackluster and ended marginally lower - Religare Broking
Nifty Outlook
Markets traded lackluster and ended marginally lower. The benchmark witnessed flat opening amid mixed global cues and oscillated in a band thereafter. Finally, Nifty settled at 17,516 levels; down by 0.25%. Mostly sectoral indices ended lower wherein PSU banks, media and realty were the top losers. The broader indices too ended with losses in the range of 0.7-1.7%.
Global markets, especially the US, have turned extremely volatile during the earnings which are impacting sentiment in our markets as well. And, we feel it may continue in the near future. On the domestic front, markets will first react to SBI numbers on Monday and the upcoming RBI monetary policy review will also be on the radar. Their commentary on inflation and economic growth will be key factors to watch amid the hawkish stance from the US Fed. In our opinion, while the benchmark may consolidate further, volatility on the broader front would be hard to handle. We thus recommend maintaining a cautious stance and keeping a check on leveraged positions.
News
* Devyani International posted Q3FY22 earnings wherein revenue was up 64.7% YoY to Rs 624.4cr. Its net profit jumped 44.1% to Rs 63.1cr.
* Monte Carlo posted Q3FY22 revenue at Rs 462cr, an increase of 14.4% YoY. Its net profit declined by 2.4% YoY to Rs 77.4cr as against Rs 79.3cr in Q3FY21.
* ABFRL announced its plans to set up a platform for foraying into the direct-toconsumer business.
Derivative Ideas
JKPAPER gained 0.4% and closed at 239.7 on 4th Feb. The stock has shown convincing up move after taking the support at 205 levels. Now fresh breakout is seen above 235 level with decent volume. Holding 232, the stock is poised to test its resistance at 250. We recommend to go Long in JKPAPER.
Strategy:- BUY JKPAPER @ 235-237, SLOSS AT 231, TRGT 245.
Religare New Year Pick - Sudarshan Chemical Industries Ltd.
Sudarshan Chemical Industries (SCI) is one of the leading producers in India and has been serving for over 70 years in Indian and global pigment markets. It manufactures an extensive range of organic, inorganic, effect pigment and dispersions. It has two manufacturing facilities located at Roha and Mahad in Maharashtra, India and 2 dedicated R&D centre globally. In addition, it exports to 85+countries and has 10 sales offices in India, US, Europe, China, Mexico, and Japan.
We believe SCI is well placed to capitalize opportunities in the global as well as Indian pigment sector driven by positive industry growth trend, high entry barrier in the sector and wide range of products in their portfolio. Besides, they’re highly cost competitive amongst the peer group. On the financial front, the company’s track record has been decent and we have estimated its revenue and PAT to grow at a CAGR of 14.5% and 14% over FY22-24E. We have a positive view on the company and have initiated a Buy on the stock with a target price of Rs 720.
Buy - Sudarshan Chemical Industries Ltd. @ CMP :- 586.8 Recommendation Price 576 Target 720 Duration 9-12 Months.
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