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Nifty Outlook

Markets ended almost unchanged in a volatile trading session, taking a breather after a strong surge. Initially, supportive global cues led to a firm start however profit-taking in the latter half trimmed all the gains. On the benchmark front, the Nifty index settled above 15,100 levels.

In line with the benchmark, the broader markets too ended flat. Amongst the sectors, a mixed trend was witnessed wherein Auto, IT and Metal ended with losses and other indices like Consumer Durables, Capital Goods and Telecom managed to settle with decent gains. We might see some consolidation in the index ahead and it would be healthy.

We thus advise using intermediate corrective moves to accumulate quality stocks on dips and avoid contrarian trades.

News

* Berger Paints announced its results wherein revenue was up 24.9% YoY to Rs. 2,118 cr. Its net profit was up 50.7% YoY to Rs. 275 cr.

* Bharat Electronics have signed a contract with Ministry of Defense for procurement of Software Defined Radio Tactical (SDR-Tac) worth over Rs 1,000 cr.

* Lupin announced that it has received approval for its Tavaborole Topical Solution, 5%, from US FDA, to market a generic equivalent of Kerydin Topical Solution, 5%, of Anacor Pharmaceuticals, Inc.

Derivative Ideas

ADANIPORTS FUT added around 5% 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 ADANIPORTS as per below levels.

Strategy:- BUY ADANIPORTS BETWEEN 574-576 SL 565 TARGET 598.

Investment Pick - Castrol India Ltd.

* Castrol India (CIL) reported muted set of numbers which were below our estimates. While volumes witnessed decent recovery sequentially, it declined by 3.7% YoY. On the segment front, automobile volumes continued to remain below pre-COVID level whereas the industrial segment witnessed decent growth in Q4CY20.

* Given the muted performance in CY20, we have marginally lowered our estimates for CY21E and CY22E. From a long term perspective, we like CIL given its strong brand equity, continued efforts towards brand building, distribution expansion and new launches. On the financial front, zero debt levels, high dividend payout ratio and strong return ratios make it one of our preferred pick in the sector. Hence, we maintain a Buy on the stock with a target price of Rs. 148.

Buy Castrol India Ltd @ 9-12 Months  CMP 130.4 TGT 148

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