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Nifty Outlook

Markets resumed the uptrend after the minor pause and gained over half a percent, tracking firm global cues. The benchmark opened the gap up and traded range bound thereafter however movement on the stock-specific front kept the participants busy. Amongst the sectors, all the indices ended in green wherein Consumer Durables, Realty and Capital Goods were the top gainers. The broader markets continued its outperformance and ended higher by a percent each. On the benchmark front, Nifty finally settled at 15,690 levels; up by 0.7%.

All eyes would be RBI monetary policy tomorrow i.e. June 4 wherein the majority expect status quo on key rates. However, their commentary on growth and inflation would be closely watched by the participants. We may see volatile swings during the day so traders should plan their trades accordingly.

News

* Arvind Fashions consolidated revenue was up 14.2% YoY to Rs. 769 cr. Its net loss came in at Rs. 65.7 cr as against loss of Rs. 195 cr in the same quarter last year.

* Lupin's board of directors has approved the company’s entry into the digital healthcare space with a focus to provide a digital therapeutics platform for doctors and patients in India.

* Zydus Cadila has received tentative approval from the USFDA to market Osimertinib Tablets in the strengths of 40 mg and 80 mg used to treat lung cancer. The drug will be manufactured at the group’s formulation manufacturing facility at the SEZ, Ahmedabad.

Derivative Ideas

MPHASIS 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 MPHASIS in cash as per below levels.

Strategy:- BUY MPHASIS BETWEEN 1895-1900 STOPLOSS 1870 TARGET 1960.

Investment Pick - Crompton Greaves Consumer Electricals Ltd.

Crompton Greaves Consumer Electricals (CGCE) reported strong set of numbers for Q4FY21. Its consolidated revenue grew by 48.3% YoY led by strong growth across geographies and different product categories. The net profit was boosted (+144% YoY) by a one-time tax write back and a sharp rise (+72.2% YoY) in other income. In the near term, demand would be impacted on account of on-going restrictions and expect normalcy by Q2FY22.

We like CGCE for its strong growth potential, consistent rise in market share in its key segment coupled with healthy dividend pay-out ratio, strong cash flow generation, lean working capital cycle and robust return ratios. Factoring the impact of demand uncertainty in the near term, we have lowered our estimates for FY22E. We maintain a Buy on the stock with a target price of Rs. 479.

Buy Crompton Greaves Consumer Electricals Ltd. @ 9-12 Months CMP 410 TGT 479

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