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Nifty Outlook

Markets ended marginally higher in a volatile trading session, in continuation to the prevailing corrective phase. The benchmark opened lower citing the recent spike in COVID cases and news of restrictions announced by a few states. However, recovery in banking heavyweights combined with the continuous surge in the IT majors pared all the losses and helped the index to close around the day’s high as well. Both the benchmark indices ended with healthy gains of 0.5%. Amongst the sectors, except metal, all the other indices ended in green wherein healthcare, banking and consumer durables were the top gainers. The broader markets too witnessed decent buying interest.

Markets are facing pressure on every rise and it would only subside if the cases tally remains under control. After the news of night curfews and restrictions on public gatherings by few states, participants now fear strict restrictions which may further dent the sentiment. We recommend keeping a check on leveraged positions amid volatility and letting the markets stabilise.

News

* Adani Transmission Ltd, the transmission and distribution arm of the diversified Adani Group, has won the Asia-Pacific Indian Deal of the Year award from Project Finance International.

* IndusInd Bank has joined hands with the National Payments Corporation of India for offering real-time cross-border remittances to India using UPI IDs, for its Money Transfer Operator partners.

* Lupin has received approval from the USFDA for its abbreviated new drug application Sevelamer Carbonate for Oral Suspension, 0.8 g and 2.4 g packets to market a generic equivalent of Renvela for Oral Suspension, 0.8 g and 2.4 g Packets of Genzyme.

Derivative Ideas

UPL gained 1.31% and closed at 756.6 on 27th Dec. UPL has been consolidating above its important Support zone of 735-740. Now Fresh Longs is being seen in UPL Fut. We recommend to go Long in UPL.

Strategy:- BUY UPL @ 750-753, SLOSS AT 740, TRGT 775.

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

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