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Nifty Outlook

Markets recovered sharply and posted gains of over a percent, taking a breather after the recent dip. Positive global cues led to a gap up but profit taking trimmed the gains in the initial hours. The tone gradually changed with healthy buying in index heavyweights from the sectors such as IT, realty and energy which supported the market to inch higher till the end. Consequently, the Nifty ended with healthy gains of 1.3% at 18,103 levels. All the sectoral indices ended in the green. The broader markets closed with positive bias in the range of 0.2-0.5%.

Markets will first react to macro data in early trade on Monday. As the result season is almost behind us, the focus will shift back to global markets for cues. At the same time, traction in primary markets will keep investors busy. There are mixed sentiments in the markets so we reiterate our cautious view on markets and let Nifty stabilise above 18,100 to change the bias.

News

Hindalco Industries Q2FY22, consolidated revenue at Rs 47,665cr as against Rs 31,237cr YoY. Its net profit came in at Rs 3,417cr as against Rs 387cr YoY.

* Abbott India Q2FY22 revenue was up 15.8% YoY at Rs 1,222.1cr. It reported a net profit of Rs 192.3cr versus Rs 180.7 crore, a growth of 6.4%YoY.

* Alkem Laboratories Q2FY22 revenue was up 18.5% YoY at Rs 2,800 cr. Its posted 15.3% YoY jump in its net profit at Rs 544.3cr

Derivative Ideas

NIFTY FUT has shed around 1% in open interest as short covering. Current chart pattern also indicates further range bound levels in Index around 17800-18200 levels.

Strategy:- SELL NIFTY 18 NOV 17700 PE@30-35, SLOSS AT 55, TRGT 10.

Investment Pick - The Ramco Cements Ltd.

Ramco Cements Ltd (TRCL) is the fifth-largest cement producer in India and the most popular cement brand in South India. The company is six decades old and manufactures ready mix concrete, dry mortar products and various grades of cement. It has a presence across ten states of India with four integrated plants and six grinding units. Apart from South India, it is growing its presence in East India, Sri Lanka and the Maldives.

We have a positive outlook given its strong brand name, leadership position in South India and product portfolio. In addition, its focus on expanding capacity increasing utilization levels and cost-saving initiatives would further help in improving profitability. We estimate its Revenue/EBITDA/PAT to grow at a CAGR of 12%/13.5%/15.5% respectively over FY21-24E and have initiated a Buy on the stock with a target price of Rs 1,237.

Buy - The Ramco Cements Ltd @ 9-12 Months CMP 1,067 TGT 1,237

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