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Nifty Outlook

Markets managed to end marginally higher amid volatility, taking a breather after the recent fall. After the initial uptick, the benchmark drifted lower and retested the previous session’s low. However, recovery in the select index majors in the final hours helped the index to pare losses and end in the green. Amid all, the sectoral indices traded mixed wherein IT, Consumer Durables and Oil & Gas ended with gains while Auto, Banking and Capital Goods ended with losses. The broader markets also witnessed selling pressure as both Midcap and Smallcap ended with 0.6% and 0.8% losses, respectively.

As all the major events are over now, we feel the performance of the global markets would be critical in days to come. At the same time, we expect the buzz to continue in the primary market. Among the sectors, only the IT pack looks decisive to us while others are witnessing mixed trends. Participants should plan accordingly.

News

* Tata Steel executed a long-term agreement with Angul Sukinda Railway (ASRL), for the construction, operation and maintenance of an alternate railway line. The agreement is for a period of 20 years to meet the logistic requirements of TSL’s Kalinganagar Steel Plant.

* The first 3-phase Ethernet-based AC Mainline Electric Multiple Unit (MEMU) equipped with BHEL manufactured electrics has rolled out from RCF Kapurthala to Asansol MEMU shed, Eastern Railways. The 12 coach MEMU train is equipped with 3-phase IGBT-based converter and inverter designed and developed by BHEL.

* CreditAccess Grameen's consolidated gross loan portfolio grew by 18.0% YoY to Rs 14,071 cr in Nov-21 and consolidated disbursements of Rs 1,505 cr in Nov-21. Consolidated branch network grew by 13.5% YoY to 1,575 branches in Nov-21. It opened 187 new branches over the last 12 months, primarily across newer markets.

BHARTIARTL closed at 681.4 after losing 0.59% on 16th Dec. The Scrip is looking weak after falling for 7 consecutive sessions and is poised to test its support at 650 levels.

Strategy:- BUY BHARTIARTL DEC 680 PE@7-8, SLOSS AT 4, TRGT 15.

Investment Pick - Kansai Nerolac Ltd.

Kansai Nerolac Paints Ltd (KNPL) posted mixed numbers for Q2FY22. Its revenue grew by 17.1% YoY to Rs 1,619.6cr, while its EBITDA and PAT witnessed de-growth of 39% YoY and 48% YoY. Demand from decorative was steady while lower demand from the industrial segment impacted the performance.

KNPL is one of the leaders in the industrial paint segment wherein it garners 40-45% revenue from the industrial segment while remaining from decorative. Going ahead, the company’s strategy is to innovate products in both its segments, expand reach, and focus on product mix as well as gain market share from unorganized segments. Besides, focus to remain on managing cost and operating efficiency which will help in margin growth. Over the medium to long term, we have a positive view on the stock and have maintained a buy with a target price of Rs 705.

Buy - Kansai Nerolac Ltd. @ CMP :- 582.7 Recommendation Price 605 Target 705 Duration 9-12 Months.

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