Markets traded lackluster in a narrow range and ended lower amidst weak cues. Initially, feeble global cues were weighing on the sentiment but failed to trigger any major fall. Consequently, the Nifty index settled at 11,896; down by 0.4%. In between, movement in the broader market kept the participants busy wherein both Midcap and Smallcap index ended higher by 0.6% and 1% respectively. On the sector front, Telecom, Capital Goods and Metals were the top gainers whereas IT, Banking and Healthcare ended with losses.
Markets are currently seeing time-wise correction after a phenomenal recovery and we feel it’s healthy for the markets before the next directional move. However, traders are facing tough times due to recent consolidation in the index while stocks are witnessing volatile swings due to the prevailing earnings season and mixed global cues. We suggest limiting naked leveraged positions in such a scenario and preferring hedge positions. Investors, on the other hand, should use this phase to accumulate quality stocks on dips.
* Asian Paints reported its numbers wherein revenue was up 5.9% YoY to Rs. 5,350 cr. Its net profit grew by 1.2% YoY to Rs. 852 cr.
* Tube Investments reported its Q2FY21 numbers wherein revenue de-grew by 4.3% YoY to Rs. 1,193 cr. Its EBITDA grew by 11.7% YoY to Rs. 175 cr. Its net profit was up 9.6% YoY to Rs. 99 cr.
* Aurobindo Pharma step down subsidiary AuroLife Pharma LLC has received a warning letter from USFDA for its oral solid manufacturing facility situated at Dayton, New Jersey.
MGL added around 11% in open interest addition as long buildup was seen in it in till closing time. Current chart pattern also indicates further up move in its price. We suggest buying MGL as per below levels.
Strategy:- BUY MGL BETWEEN 820-825 STOPLOSS AT 805 TARGET 860.
Investment Pick - Britannia Industries Ltd.
* Britannia Industries has delivered strong set of numbers for Q2FY21 driven by demand, volumes growth, rollout of wide product range in the market and improvement of distribution and supply chain. Its consolidated revenue grew by 12.1% YoY to Rs 3,419 cr. On operational front, its EBITDA grew by 37.2% YoY to Rs 675 cr, while margin expanded by 361bps on the back on benign raw material cost and cost efficiencies. The company reported 23% YoY growth in net profit at Rs 495.1 cr driven by normalcy in all segments. PAT margin expanded by 127bps YoY to 14.5%.
* Further, for the next 1-2 years company’s plan is to drive growth by expanding product portfolio, focus on growing in international markets, rural area and Hindi belt area which is gaining strong momentum, improving operating efficiencies and managing strong distribution and supply channel. Therefore, we maintain a buy rating on the stock with a target price of Rs 4,265.
Buy Britannia Industries Ltd @ 9-12 Months CMP 3,458.35 TGT 4,265
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