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Nifty Outlook

Markets managed to end marginally higher after hovering in a range for nearly a week. The bias was positive from the beginning, tracking firm global cues which further strengthened with buying in select index majors as the session progressed. The Nifty index ended with gains of 0.5% to close at 16,364 levels. After the recent underperformance, the broader market indices showed decent traction as both midcap and smallcap ended higher by 1% and 2% respectively. Amongst the sectors, all the indices ended on a positive note wherein Capital Goods, Realty and IT were the top gainers.

Markets will react to the macroeconomic data viz. IIP and CPI Inflation in early trade on Friday. We expect Nifty to maintain a positive tone but the participation of banking is critical for any momentum. Meanwhile, traders should limit their leveraged positions and use dips to add quality stocks.

News

* Natco Pharma’s consolidated revenue went down 27.2% at Rs 410.3cr against Rs 563.4cr, YoY and net profit also fell 38.6% at Rs 75cr against Rs 122.1cr in Q1FY21.

* BPCL’s revenue grew 77.1% at Rs 89,687.12cr against Rs 50,616.92cr, YoY and net profit was at Rs 1,501cr against Rs 2,083.13 in Q1FY21 which means it has declined 28%, YoY.

* Mazgaon Dock Shipbuilders revenue was up at Rs 1,214.2cr versus Rs 383.9cr and net profit also rose from Rs 101.6cr in Q1FY22 against Rs 14cr in Q1FY21.

Derivative Ideas 

MINDTREE FUTS added around 4% 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 MINDTREE as per below levels.

Strategy:- BUY MINDTREE BETWEEN 2905-2910 SL 2860 TARGET 3040.

Investment Pick - CSB Bank Ltd.

CSB Bank reported a mixed set of numbers wherein net interest income was down by 2.9% QoQ and total income was down by 11.3% QoQ due to lower other income. However, its pre -provisioning profit was up 39% due to lower employee and depreciation cost. PAT grew by 42.2% QoQ to Rs 61cr. We believe with unlocking and improving economic conditions, the CSB bank business would witness growth for the long term. Maintain Buy.

We believe CSB bank is well placed as it has a strong retail portfolio with a gold loan book and a prudent management team. Going forward, its focus would be on expanding digital presence, betting on less risky businesses and growing gold loan business. We believe with easing restriction, demand for loans in SME, MSME and 2-wheelers segments will get back on track. From a long term perspective, we are optimistic on the bank’s growth prospects and thus maintain a buy on the stock with a target price of Rs 432.

Buy CSB Bank Ltd @9-12 Months CMP 319.15 TGT 432

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