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Nifty Outlook

Markets ended almost unchanged in a range-bound session as participants chose to book some profits off the table. Initially, supportive global cues led to a firm start however profit-taking at the higher levels trimmed all the gains as the day progressed. In continuation to the prevailing trend, sectoral indices traded mixed wherein IT, FMCG and banks were the top losers while metals, oil & gas and power ended with gains. Markets are rewarding handsomely to those who are spending time on the selection of stocks and we expect this trend to continue. Also, we’re seeing buying interest across the board but on a rotational basis. Traders should align their positions accordingly and keep a close watch on global indices for cues.

News

* Biocon Biologics, a subsidiary of Biocon, joins hands with The International Diabetes Federation in its mission to promote Diabetes care, prevention and effective management worldwide.

* Glenmark Pharmaceuticals announced that it has launched SUTIB, the generic version of Sunitinib oral capsules to treat kidney cancer in India.

* Varun Beverages posted Q4CY20 numbers wherein its revenue was up 9% YoY at Rs 1,351cr. It posted net loss at Rs 7.2cr in the quarter ended Dec 2020 as against loss of Rs 54cr.

Derivative Ideas

NIFTY FUT added around 3% in open interest addition as LONG buildup was seen in it in till closing time. Current chart pattern also indicates further up move in its price. We suggest buying NIFTY 18th FEB 15350 CALL OPTION as per below levels.

Strategy:- BUY NIFTY 18th FEB 15350 CE@40-45 SLOSS AT 10, TRGT 90

Investment Pick - Britannia Industries Ltd.

Britannia Industries (BRIT) posted mixed numbers wherein revenue was below our expectation while profit grew strong. Revenue came in at Rs 3165.6cr, up by 6.1% YoY. On operational front, its EBITDA grew by 21.7% YoY to Rs 611.5cr, while margin expanded by 248bps on the back of cost efficiencies measures. The company reported healthy growth of 22.4% YoY in net profit at Rs 452.6cr with margin expansion of 190bps YoY to 14.3%. Going forward, we remain positive on the company’s long term growth as the focus would be enhancing sales, improving margins via cost efficiency measures and strengthening distribution reach. Maintain a Buy.

Going forward, BRIT strategy would be to drive strong growth by launching new and innovating products, focus on brand building and strengthening distribution reach. Besides its efforts on improving margins via cost efficiency would be its core agenda. Apart from this, strong growth momentum from rural and international businesses will continue to support and lead to market share gains. Further along with the optimistic management plan the company has strong balance and decent cash flow which would aid growth. Thus, we have a positive view on the stock for long term and have maintained a buy rating on the stock with a target price of Rs 4,265.

Buy Britannia Industries Ltd @ 9-12 Months CMP 3,389.45  TGT 4,265

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