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Nifty Outlook

Markets lost nearly a percent in a highly volatile trading session, tracking feeble local cues. After the initial uptick, the benchmark remained in a range in the first half however significant selling pressure in the second half pushed the index in the red. The news of increasing restrictions from state governments to curb the rising cases impacted sentiments. Eventually, the Nifty index ended lower by 0.9% at 14,507 levels. On the sector front, except Oil & Gas which ended positive, all the other indices ended with losses wherein Telecom, Consumer Durables and Auto were the top losers.

We believe volatility is likely to remain high in absence of any major positive trigger. Going forward, the updates on COVID-19 cases, vaccination and earnings announcements especially from Nifty majors would remain in focus. We reiterate our cautious stance and suggest preferring hedged positions.

News

* Alembic Pharmaceuticals reported consolidated revenue growth of 6.1% YoY to Rs 1,280.3 cr in Q4FY21. Its consolidated profit came in at Rs 250.7 cr up 11.6% compared to Rs 224.6 cr in the corresponding quarter of last fiscal.

* Srikalahasthi pipes reported a revenue growth of 19.1% YoY to Rs. 475 cr. Its net profit grew by 21.6% YoY to Rs. 39.8 cr.

* Skipper reported its earnings wherein revenue grew by 13.3% to Rs. 497 cr. Its net profit declined by 68% YoY to Rs. 9 cr

Derivative Ideas

BANKNIFTY FUTS added around 16% in open interest as LONG buildup was seen in it in last 2 days till closing time. Current chart pattern also indicates further up move in its price. We suggest buying Month end option as per below levels.

Strategy:- BUY BANKNIFTY 27 MAY 36000 CE@100-110, SLOSS AT 40, TRGT 200.

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 370.9 TGT 479

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