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Published on 5/08/2020 10:29:07 AM | Source: Religare Broking Ltd

The Nifty ended near day’s high at around 11,100 levels - Religare Broking

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Nifty Outlook

The bulls made a strong comeback, after four consecutive days of profit booking and helped the benchmarks to gain nearly 2%. Supportive global cues, after US manufacturing data and gains in tech stocks, boosted investors’ sentiment in the early trade. And, as the day progressed, healthy buying in auto, banking and energy stocks further extended the rally. Finally, the Nifty ended near day’s high at around 11,100 levels. The broader markets too witnessed healthy buying interest and ended with decent gains of around 1-1.3%.

We believe Indian markets would continue to take cues from global peers and the upcoming RBI policy would the next major trigger. At the same time, as more companies would announce its Q1FY21 earnings, stock-specific action would continue to induce high volatility. We reiterate our advice to focus on stock selection and risk management.

 

News

* Dixon Technologies reported 55% YoY decline in its consolidated revenue at Rs 517 cr in Q1FY21. Its EBITDA was down 68% YoY to Rs 17 cr with margin at 3.3% which decreased by 130bps YoY. Its PAT de-grew by 93% YoY to Rs 1.6 cr.

* Neuland Labs posted its Q1FY21 numbers wherein its revenue was up by 13.5% YoY to Rs 205 cr. Its EBITDA was up by 81% YoY to RS 34 cr and margins increased by 620bps to 16.5%. The company’s net profit stood at Rs 15 cr as against Rs 6 cr YoY.

* Varun Beverages reported Q1FY21 where its revenue declined by 42% YoY to Rs 1,640 cr, while its total sales volumes were down by 46% to 10.48 cr unit cases. Its net profit plunged to 65% to Rs 143 cr due to restrictions imposed by the government.

 

Derivative Ideas

* BHEL FUT added 9% in open interest addition as long buildup was seen in it in previous session. Current chart pattern also indicates further up move in its price. We suggest buying BHEL as per below levels.

* Strategy:- BUY BHEL BETWEEN 35.50-36.20 STOPLOSS AT 34 TARGET 39.50.

 

Investment Pick

* Bharti Airtel reported healthy set of numbers in Q1FY21 considering the impact of lockdown. Its revenue growth was 0.9% QoQ led by stable performance in the Indian mobile services and Africa business. The digital services business registered a healthy growth of 23.4% QoQ.

* Its consolidated EBITDA grew by 2.4% QoQ led by improved margins in India mobile services and digital services business. It reported a net loss of Rs. 15,933 cr due to an exceptional item of Rs. 11,746 cr. Going forward, we continue to maintain our positive stance on Bharti Airtel led by improvement in market share, full benefit of ARPU increase and price hikes in the future, healthy addition of 4G customers, and improved traction in other businesses.

 

 

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