Markets traded range bound and ended marginally higher amid weak global cues. The benchmark opened in the red but buying in the select index majors especially from IT and banking majors pared the losses in no time. It hovered range-bound thereafter and movement on the stock-specific front kept the participants busy. Finally, The Nifty index settled at 11,897 levels. The broader markets too performed largely in line with the benchmark wherein both Midcap and Smallcap ended higher by 0.5% and 0.3% respectively. On the sector front, Realty, Telecom and IT were the top gainers whereas Oil & Gas, Power and FMCG ended in the red.
Markets are closely following global cues and indications are still mixed from that front. Despite the positive bias, we might continue to see volatile swings so traders should prefer hedged positions and maintain their focus on the selection of stocks.
* Wipro announced that it has won an Application Management and Services Integration & Management contract from Fortum, one of the leading clean-energy companies headquartered in Espoo, Finland.
* Zydus Cadilla announced that it has received final approval from the USFDA to market Solifenacin Succinate Tablets, (US RLD: Vesicare Tablets) in the strengths of 5 mg and 10 mg.
* Granules India announced its numbers wherein company's revenue grew by 22.7% YoY at Rs 858 cr versus Rs 700 cr. Its consolidated Q2 net profit grew by 71% YoY at Rs 164 cr as against Rs 96 cr.
ASIANPAINTS added around 15% 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 Asian paints as per below levels.
Strategy:- BUY Asianpaints BETWEEN 2100-2108 STOPLOSS AT 2060 TARGET 2180.
Investment Pick - Bata India Ltd.
* Incorporated in 1931, Bata is the largest retailer and manufacturer of footwear in the country. It has a strong pan-India retail presence with 1,558 stores across cities, including franchisee stores and around ~3.23 mn sq ft retail space. It has production capacity of ~21 mn footwear pairs per annum. Its brands include Bata, Bata Comfit, Footin, Hush Puppies, Marie Claire, Power, Naturalizer, North Star, Patapata, Scholl, Weinbrenner, Disney, Bubblegummers, etc.
* Over the years Bata has been a consistent performer however Q1FY21 was severely impacted due to lockdown led by Covid-19. As the situation is still uncertain we expect FY21 growth to remain muted. Nonetheless we expect the company to regain in FY22E as the situation stabilises and demand would pick-up on the back of better product mix and higher footfalls driven by increasing presence in e-commerce space and tapping new markets, growing distribution network by expanding in semi-rural market and aggressively promoting brands through advertisements. Also company’s efforts towards its loyalty program-‘Bata Club’ will help in revenue generation and adding new clients. Besides, it has healthy balance sheet and strong cash flows which is an added advantage and this would aid to sustain in tough times. Hence we have initiated a Buy on the stock with target price of Rs. 1,669.
Buy Bata India Ltd @ 9-12 Months CMP 1,369.05 TGT 1,669
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