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Nifty Outlook

Markets remained volatile for the third successive session but settled almost unchanged, taking a breather after the recent fall. The benchmark opened lower on the back of subdued global cues and gradually drifted lower in the initial hours of the trade. However, the bulls made a strong comeback in the latter half which led the index to end on a flat note. On the sector front, except for FMCG and Consumer Durables, all the other indices ended in red wherein Metal, Capital Goods and Auto were the top losers. The broader markets also remained under pressure as both midcap and smallcap index ended lower by 0.8% and 0.7% respectively.

With no major event, global cues will continue to dictate the market trend. On the domestic front, the progress of the monsoon and updates on the vaccination drive will be closely watched. Indications are in the favor of further consolidation in the index but the bias would remain on the positive side till Nifty holds above 15,400. Meanwhile, participants should maintain their focus on the selection of stocks and use dips to gradually accumulate the fundamentally sound counters.

News

* Nazara Technologies signed a binding term sheet to acquire a majority stake in Arrakis Tanitim Organizasyon Pazarlama San Tic Ltd Sti (Publishme), the largest mobile game publishing agency in the Middle East and Turkey.

* PSP Projects announced its numbers wherein revenue was up 9.7% YoY to Rs. 501 cr. Its net profit was up 22.4% YoY to Rs. 42 cr.

* Eveready Industries revenue was up 22% YoY to Rs. 273 cr as against Rs. 224 cr. It reported a net loss of Rs. 443 cr as against Rs. 63 cr in the same quarter last year.

Derivative Ideas

NIFTY FUTS added around 10% 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 NIFTY in OPTIONS as per below levels.

Strategy:- BUY Nifty 15700 CE@ 55-65 sloss at 15 trgt 145.

Investment Pick - Finolex Industries Ltd.

Finolex Industries Limited (FIL) is a leading manufacturer of PVC pipes and fittings and the only backward integrated player in PVC resin. The company offers the latest range of PVC-U pipes and fittings which are used in agriculture, construction and industrial operations. It has strategically located manufacturing plants and a strong distribution network.

FIL is well established in agri pipes and has plans to expand in non-agri segment, its backward integrated manufacturing of PVC resin, strong distribution network and changing product mix would aid in earning better revenues as well as profits. Besides its strong brand recall value, growth plans and expansion in the PVC pipes segment are encouraging which makes it one of our preferred picks in this space. On the financial front, FIL has a healthy balance, decent cash flow and it has lowered its debt to comfortable levels over the years. We have initiated a BUY on the stock with a target price of Rs 222.

Buy Finolex Industries Ltd. @ 9-12 Months CMP 169.35 TGT 222

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