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Nifty Outlook

Markets consolidated in a range and ended marginally lower, in continuation to the previous session’s fall. Weak global cues triggered a gap down start however mixed trends across the sectors capped the movement thereafter. Amongst the sectoral indices, telecom, auto and consumer durables ended with losses whereas oil & gas, capital goods and healthcare ended with decent gains.

Participants are maintaining a cautious stance ahead of the US Fed meeting outcome, which is scheduled on December 15 and we may see a similar trend on Wednesday as well. On the benchmark front, a decisive fall below 17,150 in Nifty would further fuel the negative bias. We reiterate our view to limit leveraged positions and maintain positions on both sides.

News

* Infosys announced that it has been selected by Finland-based Orion Corporation to holistically transform its ERP and planning platforms, enhance employee experience, and drive business value realization.

* Lupin announced that it has received an Establishment Inspection Report from the USFDA for its Goa manufacturing facility.

* Raymond announced that the company is going to consider fund raising via the issue of non-convertible debentures.

Derivative Ideas

NIFTY settled at 17324.9(-0.25%) on 14th Dec. The Data suggests a strong Resistance at 17500 on the basis of huge OI addition.

Strategy:- SELL NIFTY 17600 CE (16 DEC)@28-30, SLOSS AT 48, TRGT 3.

Investment Pick - Kansai Nerolac Ltd.

Kansai Nerolac Paints Ltd (KNPL) posted mixed numbers for Q2FY22. Its revenue grew by 17.1% YoY to Rs 1,619.6cr, while its EBITDA and PAT witnessed de-growth of 39% YoY and 48% YoY. Demand from decorative was steady while lower demand from the industrial segment impacted the performance.

KNPL is one of the leaders in the industrial paint segment wherein it garners 40-45% revenue from the industrial segment while remaining from decorative. Going ahead, the company’s strategy is to innovate products in both its segments, expand reach, and focus on product mix as well as gain market share from unorganized segments. Besides, focus to remain on managing cost and operating efficiency which will help in margin growth. Over the medium to long term, we have a positive view on the stock and have maintained a buy with a target price of Rs 705.

Buy - Kansai Nerolac Ltd. @ CMP :- 587.9 Recommendation Price 605 Target 705 Duration 9-12 Months.

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