Markets extended yesterday’s rebound and gained over a percent, following supportive global cues - Religare Broking
Nifty Outlook
Markets extended yesterday’s rebound and gained over a percent, following supportive global cues. After the gap-up start, the benchmark hovered in a narrow range in the first half however buying interest in select heavyweights helped the index to regain momentum and close around the day’s high as well. Consequently, the Nifty closed around 17,463; up by 1.14%. All the sectoral indices, barring energy, ended in green wherein banking, auto and consumer durables were the top gainers. The broader indices too ended higher in the range of 0.6%- 1.2%.
All eyes are on the outcome of MPC’s monetary policy review meet on Thursday and we expect the committee to maintain the status quo on rates, but may change their stance to neutral. Besides, their commentary on growth and inflation would be crucial. On the index front, a decisive break above 17,550 in Nifty would help the index to inch further higher towards the 17,800 zone else profit taking may resume. Participants should align their positions accordingly.
News
* Shilpa Medicare announced at its meeting held on February 8, 2022 has approved the fund raising plans in the transferred entity either from strategic investors through private placement or from investors at large through public issue.
* Abbott India has posted 11.8% YoY jump in its Q3 revenue at Rs 1,224.4 cr as against Rs. 1,095.4 cr and its net profit was up 12.5% at Rs 199.2 cr as against Rs. 177.1 cr YoY.
* Jindal Steel & Power has posted 20% increase in sales volume to 6.95 lakh tonnes in January 22 as compared to 5.81 lakh tonnes in January 21.
Derivative Ideas
BHARTIARTL gained 1.47% and closed at 719.35 on 9th Feb. The stock after taking the support at 700 levels gained 2% intraday. Now with Fresh Longs added in its FUT, BHARTIARTL is poised to test 740-745 zone. We recommend to go Long in BHARTIARTL.
Strategy:- BUY BHARTIARTL @ 712-716, SLOSS AT 700, TRGT 740.
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.
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