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Nifty Outlook

Positive momentum continued for the second consecutive day as markets ended near day’s high with gains of more than half a percent. After the flat start, the benchmark traded lackluster in the initial hours however noticeable traction in banking, FMCG (mainly ITC) and energy changed the tone as the day progressed. The announcement of the PLI scheme and relief to the telecom sector by the government boosted sentiments. Consequently, the Nifty witnessed a healthy closing at 17,630 levels, up by 0.6%. The broader markets too ended in the positive range of 0.2-0.4%. However, a mixed trend was witnessed on the sectoral front.

Markets are continuously hitting new highs on the back of positive news and improvement in the economic scenario. This time the PLI scheme announced by the government has helped banks to rally along with other sectors. Importantly, the banking index has also reclaimed its record high and we expect the momentum to continue. Amid the recent buoyancy, we reiterate our view to focus on stock selection and overnight risk management as a minor fall in the index usually triggers a sharp reaction in stocks especially when the markets are at a record high.

News

BHEL has successfully commissioned India’s largest floating Solar PV plant of 25 MW which covers an area of 100 acres and is located at NTPC Simhadri in Andhra Pradesh.

TVS Motor announced the launch of ‘TVS Raider’ in the 125cc segment for the aspirational young customers in India and globally.

M&M Financial Services announced its entry into the leasing and subscription business. The new vertical would operate under the brand name ‘Quiklyz’.

Derivative Ideas 

BANKNIFTY FUT has added around 4% in open interest in as fresh long build up was seen in it. Current chart pattern also indicates further up move in its price. We suggest buying in BANKNIFTY 38500 23rd SEP Call option as per below levels.

Strategy:- BUY BANKNIFTY 23rd SEP 38500 CE@100-110, sloss at 60, trgt 190.

Investment Pick - Phillips Carbon Black Ltd.

Established in 1960, Phillips Carbon Black Ltd (PCBL) is an integral part of the RP-Sanjiv Goenka Group. Over the decades, they have built scale, expanded global footprint and set up world-class R&D facilities to address diverse customer requirements. At present, they are the largest carbon black manufacturer in India with 603,000 MT of annual production capacity. Also, it has four strategically located state-of-the-art plants at Durgapur (West Bengal), Palej & Mundra (Gujarat) and Kochi (Kerala) along with R&D Centre in Asia and Innovation Centre in Europe. Further, PCBL is a strong global player with a significant customer base in 45+ countries and offices in Japan, Germany, Belgium, China, South Korea and Vietnam.

PCBL is a leader in carbon black having a strong presence in India as well as globally. The company’s products, i.e. carbon black and speciality black, demand is likely to be driven by increase in global demand, the focus of the Indian government on the manufacturing sector and recovery in the automobile sector. In addition, its focus on manufacturing high-performance new grades products, improving operating efficiency and increasing specialty black portfolio across inks, coatings and paints segments will further drive growth. We have a positive outlook on the company from the long term perspective and have initiated a ‘Buy’ on the stock with a target price of Rs 306.

Buy - Phillips Carbon Black Ltd @ 9-12 Months CMP 254.45 TGT 306

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