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Nifty Outlook

Markets managed to settle with the gain of over a percent amid volatility, tracking favourable local cues. Participants reacted positively to the GDP numbers in early trade but the mixed trend across sectors and feeble global cues capped the movement thereafter. Finally, the Nifty index closed around 17,166 levels; up by 1.08%.

Global markets are still rattling in fear due to the new COVID variant and it may continue in near future. At the same time, favorable domestic data may result in some intermediate relief but the possibility of any major directional move seems unlikely. Keeping all in mind, it’s prudent to stay cautious and wait for further clarity.

News

* Maruti Suzuki India posted total sales of 1,39,184 units in November 2021. Total sales in the month include domestic sales of 1,13,017 units, sales to other OEM of 4,774 units and its highest ever monthly exports of 21,393 units.

* Biocon has been selected to be in the Dow Jones Sustainability Index in the Emerging Markets category for its progressive Environmental, Social and Governance practices, which underscore its commitment to the larger goal of sustainable development.

* TVS Motors announced its numbers wherein total sales went down 17.2% at 2.72 lakh units against 3.22 lakh units (YoY). Total 2-wheeler sales slipped 17.2% at 2.57 lakh units against 3.11 lakh units (YoY). Total 3-wheeler sales was up 33% at 14,830 units against 11,190 units.

Derivative Ideas

NIFTY gained around 1% on 1st Dec. But BANKNIFTY outperformed NIFTY as it closed after gaining 1.9%.

Strategy:- BUY BANKNIFTY (30 Dec) 39000 CE @100-120, SLOSS AT 40, TRGT 240.

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 :- 595.05 Recommendation Price 605 Target 705 Duration 9-12 Months.

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