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Nifty Outlook

Markets started the week on a choppy note but finally ended nearly half a percent higher. The benchmark opened gap down following the weak global cues however it recouped all the losses as the day progressed and settled close to the day’s high. Consequently, the Nifty ended with gains of 0.4% at 15,747 levels. Amongst the sectors, all indices, barring auto and IT, ended in the green. The broader indices marginally outperformed the benchmark and gained within the range of 0.6%-0.8%.

We’re seeing consolidation in the index on the expected lines however the buying interest on every dip clearly shows the market mood. We reiterate our advice to utilise intermediate correction to go long in quality counters until we see some sign of trend reversal. Having said that, it’s not easy to identify performers at the record high and the risk of false breakout is also there. We thus recommend limiting the naked leveraged bets and maintaining strict risk management rules

News

* Bharat Dynamics reported its Q4FY21 numbers wherein revenue was down 21% at Rs 1,136.9cr as against Rs 1,439.4cr YoY. Net profit was down 15.9% YoY at Rs 260.4cr.

* Cadila Healthcare and Bayer (South East Asia) Pte Ltd announced the extension of their Joint Venture by three years from June 2021. This JV will continue to focus on innovation-led, patient-centric offerings and digital health solutions.

* Route Mobile announced a technology partnership with Truecaller, the world's most trusted and accurate Caller ID and telephone search engine.

Derivative Ideas

TRENT FUTS added around 17% 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 TRENT in cash as per below levels.

Strategy:- BUY TRENT BETWEEN 840-845 STOPLOSS 820 TARGET 880.

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 168.6 TGT 222

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