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Nifty Outlook

Markets continued to decline for a third straight session on the back of unsupportive global cues. The Nifty index ended lower by 0.6% at 17,226 levels. Most of the sectoral indices traded in tandem with the benchmark and ended lower. The broader markets too witnessed selling pressure as both Midcap and Smallcap ended lower by 0.5% and 0.3% respectively.

All eyes will be on the US Fed meeting tonight and we’re going to see the reaction in early trade on Thursday. While the majority expects that the committee would hold rates citing the possible challenges due to the new COVID variant, commentary on tapering, inflation and growth would be critical. Besides, we have weekly derivatives expiry scheduled so expect choppiness to remain high. Participants should wait for some clarity over the direction and limit positions.

News

* TVS Motor Company and BMW Motorrad today announced that they are extending and expanding their long-term partnership with the joint development of new platforms and future technologies, including Electric Vehicles.

* Genus Power Infrastructures has received Rs 325 cr worth of orders. These orders are across exports geography and domestic geography.

* Anupam Rasayan has signed a long term binding contract worth Rs 135 cr with a Japanese multinational customer for supplying an existing life science related speciality chemical.

Derivative Ideas

BATAINDIA after shedding 2.35% closed at 1911.55 on 15th Dec. The Scrip is looking weak after falling for consecutive 3 sessions. We expect it to test its near support at 1860 Levels.

Strategy:- BUY BATAINDIA 1920 PE@28-32, SLOSS AT 14, TRGT 60.

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 :- 589.1 Recommendation Price 605 Target 705 Duration 9-12 Months.

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