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Nifty Outlook

Markets resumed the trend and gained over half a percent amid mixed cues. After the flat start, the benchmark gradually inched higher in the first half and traded range bound till the end. It was the healthy buying in IT, Auto and Realty which aided gains while banking traded subdued for second consecutive session. A mixed trend was witnessed on the broader front wherein smallcap ended with gains of nearly 0.7% and midcap ended almost flat

Most of the sectors are participating in the move now however a trader needs to identify the right sector/stock as the markets are almost at record highs. Besides, the scheduled derivatives expiry may result in a volatile session on Thursday i.e. May 27. We thus advise keeping a check on naked leveraged positions and continuing with the “buy on dips” approach.

News

* Berger Paints Q4FY21 revenue was up 49.5% YoY at Rs 2,026.1cr. Its net profit stood at Rs 208.6cr versus Rs 103.2cr YoY.

* J Kumar Infra’s Q4FY21 revenue was up 13% YoY at Rs 992cr. Its net profit jumped 5.1% YoY to Rs 32.7cr.

* Manappuram Finance Q4FY21 revenue was up 1.1% YoY at Rs 1,622.3cr. Its net profit grew 17.6% at Rs 468.3cr as against Rs 398.2cr YoY.

Derivative Ideas

MPHASIS JUNE FUTS added around 24% 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 MPHASIS as per below levels.

Strategy:- BUY MPHASIS BETWEEN 1905-1915 STOPLOSS 1860 TARGET 2000.

Investment Pick - Maruti Suzuki India Ltd

Maruti Suzuki India Ltd. (MSIL) is India’s largest passenger vehicles (PV) company with a commanding market share of ~48% in the domestic market with ~1.2 million vehicles sold in FY21. It is a subsidiary of Suzuki Motor Corporation, Japan. MSIL has two manufacturing plants located at Gurugram and Manesar in Haryana with an installed capacity of ~1.58 million vehicles per year. Further, MSIL boasts of its wide distribution network with ~2,765 channels (including NEXA) and has 3,864 service workshops covering 1,914 cities. Further, MSIL is the largest exporter of passenger cars from India.

we expect margins could remain under pressure in the near term due to rising commodity prices and lower volumes. However, price hikes, better product mix and cost rationalization measures would aid margin improvement in FY22 and FY23. We recommend a Buy on the stock with a target price of Rs. 8,289.

Buy Maruti Suzuki India Ltd @ 9-12 Months CMP 7,034.3 TGT 8,289

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