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Nifty Outlook

Markets made a smart comeback after yesterday's slide and gained over half a percent. After the initial uptick, the benchmark gradually inched higher as the day progressed and settled around the day’s high. Among the benchmark indices, Nifty ended at 15,738 levels, up by 0.7%. On the sector front, all the other indices, barring auto, ended in positive wherein healthcare, metals and realty were among the top gainers. The broader indices also witnessed sharp recovery and edged higher in the range of 1.3-1.7%

Markets are keenly eyeing the domestic developments viz. unlocking by states and progress of vaccination programs for cues. Going ahead, we feel the update on the monsoon will also be closely watched by the participants. Major global indices are currently seeing consolidation which may continue to trigger volatility in our markets too. Amid all this, we reiterate our bullish view and suggest using dips or further consolidation to accumulate quality stocks.

News

* Tata Digital Ltd, a 100% subsidiary of Tata Sons Pvt. Ltd, announced that it will acquire a majority stake in digital health company 1MG Technologies Private Ltd.

* Cera Sanitaryware has reported 47.2% YoY jump in its revenue at Rs 438.4cr in Q4FY21. Its net profit stood at Rs 45.8cr, an increase of 23% YoY.

* Shankara Building Products Q4FY21 revenue was down 3.7% YoY at Rs 642.3cr. Its net profit fell by 2% YoY to Rs 11.1cr.

Derivative Ideas

HDFCAMC FUTS added around 10% 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 HDFCAMC in cash as per below levels.

Strategy:- BUY HDFCAMC BETWEEN 3050-3060 STOPLOSS 3010 TARGET 3170.

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 172.35 TGT 222

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