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Nifty Outlook

Markets settled marginally lower as participants preferred to book some profits off the tables after the recent surge. After the gap-up start, the benchmark inched further higher initially but profit taking in the index majors across the board trimmed all the gains. Consequently, the Nifty ended at 17,585 levels, down by 0.3%. The broader markets too witnessed selling pressure and ended lower in the range of 0.7-1.3%. On the sector front, most of the indices, barring banking and media, ended in the red.

It’s healthy to consolidate after a trending move and we may see further consolidation in Nifty ahead. Meanwhile, buoyancy in the banking pack, which holds considerable weight in the index, would help in capping the downside. In short, Nifty may hover within the 17,400-17,800 zone for the time being. Meanwhile, participants should maintain extra caution in midcap and smallcap space citing the possibility of further decline.

News

* Rajesh Exports announced it has bagged a prestigious order worth Rs. 691cr of designer range of jewellery from Germany. The said order is to be completed by December 2021.

*  Bajaj Finance announced that it has approved an investment upto Rs. 284cr in Bajaj Finserv Direct Ltd.

* ECLERX informed that it has approved Thursday, September 30, 2021 as the 'Record Date' for buy-back of shares

Derivative Ideas 

VOLTAS FUT has added around 6% in open interest in as fresh long build up was seen in it. Current chart pattern also indicates further up move in its price. We suggest buying in VOLTAS 1260 STRIKE CALL OPTION as per below levels.

Strategy:- BUY VOLTAS 1260 CE @20-21, SLOSS AT 14, TRGT 34

Investment Pick - Phillips Carbon Black Ltd.

Established in 1960, Phillips Carbon Black Ltd (PCBL) is an integral part of the RP-Sanjiv Goenka Group. Over the decades, they have built scale, expanded global footprint and set up world-class R&D facilities to address diverse customer requirements. At present, they are the largest carbon black manufacturer in India with 603,000 MT of annual production capacity. Also, it has four strategically located state-of-the-art plants at Durgapur (West Bengal), Palej & Mundra (Gujarat) and Kochi (Kerala) along with R&D Centre in Asia and Innovation Centre in Europe. Further, PCBL is a strong global player with a significant customer base in 45+ countries and offices in Japan, Germany, Belgium, China, South Korea and Vietnam.

PCBL is a leader in carbon black having a strong presence in India as well as globally. The company’s products, i.e. carbon black and speciality black, demand is likely to be driven by increase in global demand, the focus of the Indian government on the manufacturing sector and recovery in the automobile sector. In addition, its focus on manufacturing high-performance new grades products, improving operating efficiency and increasing specialty black portfolio across inks, coatings and paints segments will further drive growth. We have a positive outlook on the company from the long term perspective and have initiated a ‘Buy’ on the stock with a target price of Rs 306.

Buy - Phillips Carbon Black Ltd @ 9-12 Months CMP 254.45 TGT 306

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