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Nifty Outlook

It was a roller coaster ride for equity markets as the benchmark oscillated in a broader range and finally settled in the red. After the flat opening, weakness in global indices started weighing on the sentiment which pushed the index lower. However, rebound in the select index majors trimmed the losses as the session progressed. Finally, the Nifty index ended with losses of 0.2% at 15,713 levels. Amongst the sectors, a mixed trend was witnessed as Telecom, Metal and Capital Goods ended with gains whereas Banking, Auto and Consumer Durables closed lower. The broader market indices, midcap and smallcap, also traded in tandem with the benchmark and lost nearly 0.4% each.

Markets will react to the US FOMC meeting outcome in early trade on Thursday. The FOMC is expected to maintain status quo on rates however their commentary on the inflation trajectory and any timelines on interest rate revision would be actively tracked. Back home, the earnings announcement from key Nifty majors and monthly derivatives expiry would keep the participants busy. On the index front, a move above 15,770 would trigger further rebound else profit taking will resume. Traders should continue with a selective approach and wait for further clarity.

News

* IDBI Bank posted the Q1FY22 results where net interest income was up 41.4% YoY at Rs 2,505.7cr against Rs 1,772.4cr, YoY. The net profit of the company is at Rs 603.3cr against Rs 144.4cr in Q1FY21.

* Heritage Foods consolidated revenue was up 1.4% at Rs 648cr versus Rs 639cr, YoY. The net profit fell 68.6% YoY at Rs 30.3cr in Q1FY22 against Rs 96.4cr in Q1FY21.

* Pfizer revenue was up 45.5% in Q1FY22 at Rs 749.2cr against Rs 515cr YoY. The net profit also rose 60.6% at Rs 199.9cr versus Rs 124.4cr YoY

Derivative Ideas

INDUSTOWER AUG FUTS added around 56% in open interest as LONG buildup was seen in it. Current chart pattern also indicates further up move in its price. We suggest buying in INDUSTOWER in cash as per below levels.

Strategy:- BUY INDUSTOWER BETWEEN 229-230 STOPLOSS 224 TARGET 242.

Investment Pick - CSB Bank Ltd.

Established in 1920, CSB Bank Ltd (known as The Catholic Syrian Bank) is one of the oldest private sector banks in India. It has a significant network in Kerala, Tamilnadu, Karnataka and Maharashtra. At present, 90% of the branches are in these four states and the remaining 10% is spread across other states in India. The bank operates mainly in four business areas namely SME banking, retail banking, wholesale banking and treasury operations.

We believe CSB bank is well placed as it has a strong gold loan book, prudent management team and steady financials with improved asset quality. Further, a well-planned strategy like betting on less risky businesses such as agriculture, food & service, etc. and avoiding risky unsecured loans augurs well for future growth. From a long term perspective, we are optimistic on the company’s growth prospects thus initiating a Buy on the stock with a target price of Rs 432.

Buy - CSB Bank Ltd @ 9-12 Months CMP 343.1 TGT 432.

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