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Nifty Outlook

Markets extended gains in a range-bound session, in continuation to prevailing trend. After the initial uptick, the benchmark hovered in a range till the end however healthy buying in sectors such as metals, IT and auto kept the participants busy. Further, the anticipation of faster economic recovery and vaccination drive picking up pace too boosted sentiments. Consequently, the Nifty ended at 15,799 levels, up by 0.4%. The broader markets ended in positive in the range of 0.1-0.4%.

Markets will first react to the IIP numbers in early trade on Monday. Going ahead, the progress of the vaccine drive and updates on the monsoon will be closely watched by the participants for cues. While the trend is bullish, the underperformance of the banking pack is certainly hurting the sentiment however we expect the bias to improve next week. Meanwhile, traders should focus on other sectors and use intermediate dips to add the selected stocks.

News

* Heranba Industries Q4FY21 sales rose 25.3% YoY to Rs 268cr. Its net profit rose 64.5% YoY to Rs 43cr.

* Goa Carbon Q4FY21 revenue rose 84.6% YoY to Rs 127.9 cr. The company posted a net profit of Rs 6.6cr as against a loss of Rs 4.8cr YoY.

* Solar Industries India announced that it has secured multiple orders from Coal India having contract value of ~Rs 365cr for the supply of Cartridge Explosives and Accessories over a period of two years.

Derivative Ideas

CUB FUTS added around 24% in open interest as LONG buildup was seen in it. Current chart pattern also indicates further up move in its price. We suggest buying in CUB in cash as per below levels.

Strategy:- BUY CUB BETWEEN 167-168 STOPLOSS 164 TARGET 174.

Investment Pick - Finolex Industries Ltd.

Finolex Industries Limited (FIL) is a leading manufacturer of PVC pipes and fittings and the only backward integrated player in PVC resin. The company offers the latest range of PVC-U pipes and fittings which are used in agriculture, construction and industrial operations. It has strategically located manufacturing plants and a strong distribution network.

FIL is well established in agri pipes and has plans to expand in non-agri segment, its backward integrated manufacturing of PVC resin, strong distribution network and changing product mix would aid in earning better revenues as well as profits. Besides its strong brand recall value, growth plans and expansion in the PVC pipes segment are encouraging which makes it one of our preferred picks in this space. On the financial front, FIL has a healthy balance, decent cash flow and it has lowered its debt to comfortable levels over the years. We have initiated a BUY on the stock with a target price of Rs 222.

Buy Finolex Industries Ltd. @ 9-12 Months CMP 171.85 TGT 222

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