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Nifty Outlook

Markets extended recovery for the second consecutive session and gained over a percent, tracking favorable global cues. After the initial downtick, the benchmark gradually inched higher as the day progressed and finally settled around the day’s high. Among the benchmark indices, Nifty reclaimed the 17,400 mark; up by 1.4%. All the sectoral indices ended in green wherein IT, oil & gas and metal were the top gainers. The broader markets too performed in line with benchmark wherein midcap and smallcap both ended with gains of a percent each.

We may see a further rebound in the Nifty index however 17550-17600 zone would be difficult to cross. Participants should focus on the pockets which are showing strength and choose the stocks accordingly. Among the sectors, IT looks strongest and seeing noticeable traction while others are showing a mixed trend.

News

* Amber Enterprises has entered into the definitive agreements with Pasio India and acquired 73% stake in the equity share capital of Pasio.

* Lupin Inc., a wholly-owned subsidiary of global pharma major, Lupin has entered into an agreement with TTP pie (The Technology Partnership pie) to acquire the exclusive worldwide rights to develop, manufacture and commercialize inhalation products using TTP's soft-mist inhalation technology platform.

* Larsen & Toubro and ReNew Power announced a partnership agreement to tap the emerging green hydrogen business in India. Under this agreement, L&T and ReNew will jointly develop, own, execute and operate green hydrogen projects in India.

Derivative Ideas

NIFTY gained around 1.37% on 2nd Dec. IT Sector outperformed in today’s session and Looks Bullish for a good Upmove.

Strategy:- BUY WIPRO 660 CE@9-11, SLOSS AT 5, TRGT 22.

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

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