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Nifty Outlook

Markets extended gains for the third consecutive session, in continuation to prevailing buoyancy around the earnings season. Despite caution amongst global peers ahead of the FOMC meet, the benchmark opened gap-up and continues to surge higher. The earnings outcome of companies in the banking and auto space (thanks to Axis Bank and TVS motors) led the up move as it further boosted investor’s confidence. Consequently, the Nifty ended higher by 1.4% at 14,865 levels. The broader markets too ended in positive in the range of 0.7-0.8%. Barring healthcare, metals and capital goods, all sectoral indices ended in the green

Markets will first react to FOMC meet outcome in early trade on Thursday and then focus would shift to the monthly derivatives expiry and earnings. On the earnings front, companies such as Bajaj Auto, Titan and HUL will announce their numbers during the day which will further add to the volatility. We reiterate our positive yet cautious view on markets and expect Nifty to test the 15,000 zone. Meanwhile, traders should maintain extra focus on the selection of stocks and prefer hedged bets, especially for the overnight trades.

News

* Bajaj Finserv reported Q4FY21 numbers wherein revenue rose 15.7% YoY to Rs 15,387cr. Its net profit stood at Rs 979cr as against Rs 194cr YoY, while it was down by 24.1% from Rs 1,290cr QoQ.

* Cipla announced that it has signed a non-exclusive licensing agreement with MSD a tradename of Merck & Co., Inc., USA, for the manufacturing and distribution of Molnupiravir, the investigational oral antiviral drug currently being studied in a Phase 3 trial for the treatment of non-hospitalized patients with confirmed COVID-19.

* Anupam Rasayan announced that it has bagged an order worth Rs 1,100cr from one of the top 10 multinational life sciences company for supplying life sciences related speciality chemicals.

Derivative Ideas

MOTHERSUMI MAY FUTS added around 20% in open interest as LONG buildup was seen in it till closing time. Current chart pattern also indicates further up move in its price. We suggest buying MOTHERSUMI in cash as per below levels.

Strategy:- BUY MOTHERSUMI BETWEEN 215-217 STOP LOSS 209 TARGET 228.

Investment Pick - Crompton Greaves Consumer Electricals Ltd.

Crompton Greaves Consumer Electricals (CGCE) is engaged in manufacturing and marketing of a wide range of consumer products ranging from fans, light sources and luminaires, pumps and household appliances such as geysers, mixer grinders, toasters and irons

We like CGCE for its strong growth potential, consistent rise in market share in its key segment coupled with healthy dividend pay-out ratio, strong cash flow generation, lean working capital cycle and robust return ratios. We recommend a Buy on the stock with a target price of Rs. 479.

Buy Crompton Greaves Consumer Electricals Ltd @ 9-12 Months CMP 400.85 TGT 479

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