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Nifty Outlook

Markets consolidated further in a range and closed unchanged for the fourth successive session. The benchmark started on a positive note following strong global cues. However, profit taking at the higher levels trimmed the gains and pushed the index lower. Amongst the sectors, heavyweights like banking and IT witnessed healthy buying interest whereas other sectors like oil & gas, capital goods, and realty ended with losses. The underperformance continued on the broader front as both midcap and smallcap ended lower by 0.7% and 0.9% respectively

It’s a healthy pause in the benchmark after the recent surge however we’re now seeing selective participation so traders should maintain extra caution in the selection of their bets. We reiterate our preference for banking and financials among the sectoral pack.

News

* MRF’s consolidated revenue was up 70% at Rs 4,184cr versus Rs 2,460cr and net profit at Rs 165.6cr versus Rs 13.5cr, YoY.

* Chemcon Speciality’s revenue was up 25.3 % at Rs 57.2cr against Rs 45.7cr YoY. Net profit was up 51.9 % at Rs 13.4cr against Rs 8.8cr YoY.

* Astra Zeneca Pharma’s revenue was down 9.4 % at Rs 175.4cr against Rs 193.6cr YoY. Net profit was down 45.6 % at Rs 10.2cr against Rs 18.8cr YoY.

Derivative Ideas 

TECHM FUTS added around 10% 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 TECHM as per below levels.

Strategy:- BUY TECHM BETWEEN 1260-1270 STOPLOSS 1235 TARGET 1320.

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 325 TGT 432

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