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Nifty Outlook

Markets recovered strongly and gained over a percent, after trading subdued for the last three consecutive sessions. Upbeat global markets triggered a gap up start which strengthened further as the day progressed. It witnessed a marginal dip in the middle but recovered almost vertically in the last hour to close around the day’s high. Consequently, the Nifty closed near 15,824 levels, up by 1.2%. All the sectoral indices ended in the green with metals, realty and IT being the top gainers. The broader markets too ended in a positive range of 1.2-1.5%.

Markets are currently dancing to the global tunes and earnings announcements are further adding to the volatility. As the signals are still mixed, we expect volatile swings to continue. Keeping in mind the scenario, we reiterate our cautious view and suggest keeping a check on leveraged positions.

News

* HUL reported jump of 12.8% YoY in Q1FY22 revenue at Rs 11,915cr. Its net profit stood at Rs 2,061cr as against Rs 1,881cr YoY.

* Bajaj Auto’s Q1FY22 revenue was up at Rs 7,386cr as agaisnt Rs 3,079cr YoY. It posted net profit of Rs 1,061cr as against Rs 528cr, YoY.

* CSB Bank Q1FY22 NII jumped 44.5% YoY at Rs 267.8cr. Net profit grew 13.9% at Rs 61cr. Gross NPA and NNPA were higher as compared QoQ at 4.9% and 3.2%.

Derivative Ideas

ABFRL FUTS added around 5% 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 ABFRL in cash as per below levels.

Strategy:- BUY ABFRL BETWEEN 218-219 STOPLOSS 214 TARGET 232

Investment Pick - CSB Bank Ltd.

Established in 1920, CSB Bank Ltd (known as The Catholic Syrian Bank) is one of the oldest private sector banks in India. It has a significant network in Kerala, Tamilnadu, Karnataka and Maharashtra. At present, 90% of the branches are in these four states and the remaining 10% is spread across other states in India. The bank operates mainly in four business areas namely SME banking, retail banking, wholesale banking and treasury operations.

We believe CSB bank is well placed as it has a strong gold loan book, prudent management team and steady financials with improved asset quality. Further, a well-planned strategy like betting on less risky businesses such as agriculture, food & service, etc. and avoiding risky unsecured loans augurs well for future growth. From a long term perspective, we are optimistic on the company’s growth prospects thus initiating a Buy on the stock with a target price of Rs 432.

Buy - CSB Bank Ltd @ 9-12 Months CMP 322.85 TGT 432.

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