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Nifty Outlook

Markets inched marginally higher in continuation to Thursday’s rise and settled around the day’s high. After opening on a positive note, the benchmark witnessed profit taking and turned flat in no time. However, healthy buying in banking, metals and auto stocks supported the markets to regain some strength as the session progressed. Consequently, the Nifty closed at 15,860 levels, up by 0.4%. The broader markets too ended higher in the range of 0.5-1.1%. On the sector front, all indices ended in positive, except for FMCG and Energy.

The benchmark is hovering near a record high largely led by a gradual pickup in economic activities, as states start unlocking, the expectation of better earnings and ramp-up of vaccination. On the flip side, the possibility of the third wave of Covid can impact market sentiments. We remain cautiously optimistic on the markets and suggest aligning the positions accordingly.

News

* Godfrey Phillips Q4FY21 revenue was up 17.5% YoY at Rs 705.9cr. Its net profit came in at Rs 95.2cr as against Rs 38.7cr YoY.

* Indraprastha Gas reported Q4FY21 numbers wherein its revenue was up 7.2% QoQ at Rs 1,550.6cr. Its net profit was down 1.2% QoQ at Rs 331cr.

* PNC Infratech revenue was up 38.4% YoY at Rs 1,864.3cr for Q4FY21. Its net profit jumped 66.4% YoY at Rs 150.4cr

Derivative Ideas

LICHSGFIN FUTS added around 8% 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 LICHSGFIN in cash as per below levels.

Strategy:- BUY LICHSGFIN BETWEEN 460-462 STOPLOSS 450 TARGET 485.

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 173.95 TGT 222

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