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Nifty Outlook

Markets remained range bound but managed to settle marginally in the green. After the flat start, the benchmark drifted further lower in the initial hours however rebound in the select index majors helped the index to recover all the losses and close around the day’s high as well. Consequently, the Nifty index ended 0.3% higher at 15,722 levels. Amongst the sectors, consumer durables, banking and realty witnessed traction while metals and capital goods ended in the red.

We may see further consolidation in the index ahead however movement on the stock-specific front would keep the traders busy. Among the sectors, we like defensive viz. pharma, FMCG and IT while the underperformance of the banking index is still a concern. Participants should align their positions accordingly and keep a close watch on global markets for cues.

News

* Bharti Airtel announced the launch of its latest innovation Airtel Black – India’s first all-in-one solution for homes.

* Marico announced that India business delivered +30% revenue growth in Q1. Saw robust double-digit volume growth in Q1FY22. Parachute coconut oil delivered ahead of medium-term expectations. Saffola edible oils posted low double-digit volume growth, despite a high base. Foods portfolio revenue more than doubled YoY in Q1. International business posted constant currency growth in low 20s in Q1.

*  Laurus Labs has received the licence from Defence Research & Development Organisation (DRDO) to manufacture and market of 2-Deoxy-D-Glucose (2DG).

Derivative Ideas

PIIND FUTS added around 7% 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 PIIND in cash as per below levels.

Strategy:- BUY PIIND BETWEEN 3005-3010 STOPLOSS 2960 TARGET 3100.

Investment Pick - Finolex Industries Ltd.

Finolex Industries (FIL) Q4FY21 results were above our estimates. Revenue grew by 62.5% YoY to Rs 1,249cr largely driven by better volumes from resin business and realization from both businesses. Resin segment posted growth of 112% YoY to Rs 920.2cr while the company’s pipes and fitting segment grew by 43% YoY to Rs 901.7cr. EBITDA stood at Rs 410.1cr, up by 296% YoY while its margins witnessed strong improvement of 1936bps to 32.8%. Its net profit grew by 410% YoY to Rs 298.8cr with margin expansion of 1629bps.

FIL is well placed in the plastic pipe segment with a strong presence in agri pipes and manufacturing of resin. Going ahead, it has plans to grow in the non-agri segment, expand its manufacturing of PVC resin, increase distribution network and change product mix which will aid in earning better revenues as well as profits. Besides it has strong brand recall value, healthy balance and decent cash flow which bode well for the future growth of the company. So, we maintain a Buy rating on the stock with a target price of Rs 222.

Buy - Finolex Industries Ltd. @ 9-12 Months CMP 183.8 TGT 222

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