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Nifty Outlook

Markets inched further lower and lost over half a percent, in continuation to the prevailing corrective phase. After a flat opening, the benchmark indices witnessed a gradual fall, led by selling pressure in sectors such as auto and banks and settled around the day’s low.

Amongst the sectoral indices, a mixed trend was witnessed wherein power, oil and gas and metals were the top gainers. We may see further consolidation in markets, in absence of any major trigger. Meanwhile, the focus should be on position management. Nifty has the next major support around the 14850-14,950 zone.

News

* The construction arm of L&T has secured a significant order from Nuclear Power Corporation of India Ltd for its Heavy Civil Infrastructure business in India to construct the Main Plant Civil Works of the Kudankulam 5&6 units.

* Dr. Reddy's Laboratories announces the launch of Fluphenazine Hydrochloride Tablets, USP a therapeutic equivalent generic version of Prolixin Tablets in the U.S. market.

 NTPC announced that its Unit-2 of 800 MW capacity of Gadarwara Super Thermal Power Project has successfully completed trial operation and consequently included in the installed capacity. The total installed capacity of NTPC and NTPC group has become 52110 MW and 64875 MW respectively.

Derivative Ideas

COFORGE added around 11% 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 COFORGE as per below levels.

Strategy:- BUY COFORGE IN CASH AT 2580 SLOSS AT 2540 TRGT 2660.

Investment Pick - Britannia Industries Ltd

Britannia Industries (BRIT) posted mixed numbers wherein revenue was below our expectation while profit grew strong. Revenue came in at Rs 3165.6cr, up by 6.1% YoY. On operational front, its EBITDA grew by 21.7% YoY to Rs 611.5cr, while margin expanded by 248bps on the back of cost efficiencies measures. The company reported healthy growth of 22.4% YoY in net profit at Rs 452.6cr with margin expansion of 190bps YoY to 14.3%. Going forward, we remain positive on the company’s long term growth as the focus would be enhancing sales, improving margins via cost efficiency measures and strengthening distribution reach. Maintain a Buy.

Going forward, BRIT strategy would be to drive strong growth by launching new and innovating products, focus on brand building and strengthening distribution reach. Besides its efforts on improving margins via cost efficiency would be its core agenda. Apart from this, strong growth momentum from rural and international businesses will continue to support and lead to market share gains.

Further along with the optimistic management plan the company has strong balance and decent cash flow which would aid growth. Thus, we have a positive view on the stock for long term and have maintained a buy rating on the stock with a target price of Rs 4,265.

Buy Britannia Industries Ltd @ 9-12 Months CMP 3,389.45  TGT 4,265

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