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Nifty Outlook

Markets managed to end on a strong note in an unusual session. The benchmark made a decent start, tracking favourable global cues however technical glitch on NSE halted trading for most of the session before resuming again at 3.30 pm. Sentiment boosted in the extended hours, taking note of the news that the finance minister allowed the government businesses to transact with private banks. Consequently, the Nifty index ended with strong gains of nearly 2%. Amongst the sectors, Banking was the top outperformer ending higher by 3.7% followed by Capital Goods which ended higher by 1.8%. The broader markets too participated as both BSE Midcap and Smallcap ended higher by 0.8% and 1.1%.

We expect volatility to remain high on Thursday due to the scheduled derivatives expiry of February month contracts. It would be prudent to avoid naked leveraged positions in early trades and prefer hedged bets.

News

* Granules India announced that the US FDA has approved its Abbreviated New Drug Application for Acetaminophen, Aspirin and Caffeine Tablets USP, 250 mg/250 mg/65 mg (OTC).

* Strides Pharma Science announced that its step-down wholly owned subsidiary, Strides Pharma Global Pte. Limited, Singapore, has received approval for Ibuprofen Oral Suspension USP,100 mg/5 mL (OTC) from USFDA.

* Bharti Airtel has entered the advertising business with the launch of Airtel Ads. Airtel Ads allows brands of all sizes to curate consent based and privacy safe campaigns to one of the biggest pool of quality customers in India.

Derivative Ideas

APOLLOTYRE FUTS added around 12% in open interest addition as LONG buildup was seen in it till closing time. Current chart pattern also indicates further up move in its price. We suggest buying APOLLOTYRE as per below levels.

Strategy:- BUY APOLLOTYRE BETWEEN 231-233 STOPLOSS AT 223 TARGET 247

Investment Pick - Britannia Industries Ltd

Britannia Industries (BRIT) posted mixed numbers wherein revenue was below our expectation while profit grew strong. Revenue came in at Rs 3165.6cr, up by 6.1% YoY. On operational front, its EBITDA grew by 21.7% YoY to Rs 611.5cr, while margin expanded by 248bps on the back of cost efficiencies measures. The company reported healthy growth of 22.4% YoY in net profit at Rs 452.6cr with margin expansion of 190bps YoY to 14.3%. Going forward, we remain positive on the company’s long term growth as the focus would be enhancing sales, improving margins via cost efficiency measures and strengthening distribution reach. Maintain a Buy. Going forward, BRIT strategy would be to drive strong growth by launching new and innovating products, focus on brand building and strengthening distribution reach. Besides its efforts on improving margins via cost efficiency would be its core agenda. Apart from this, strong growth momentum from rural and international businesses will continue to support and lead to market share gains. Further along with the optimistic management plan the company has strong balance and decent cash flow which would aid growth. Thus, we have a positive view on the stock for long term and have maintained a buy rating on the stock with a target price of Rs 4,265.

Buy Britannia Industries Ltd @ 9-12 Months CMP 3,405.55  TGT 4,265

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