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Nifty Outlook

Markets started the week on a feeble note and lost over a percent, tracking unsupportive global cues. Besides, the subdued result of the banking heavyweight, HDFC Bank, was also weighing on the sentiment. The benchmark opened gap down and hovered in a narrow range in the first half however profit taking resumed in the latter half which pushed the index further lower. Finally, the Nifty settled at 15,752 levels; down by 1.07%. Most of the sectoral indices ended in line with the benchmark however the broader market witnessed a mixed trend wherein midcap ended lower by 0.8% while smallcap ended almost flat.

We’re mirroring the global indices as the lingering fear of the third wave has been haunting markets now and then. Besides, participants are closely eyeing the earnings and reacting sharply to any disappointment. With this decline in the index, we may see further consolidation ahead. Meanwhile, we reiterate our view to continue with stock-specific trading approach while keeping a check on leveraged positions.

News

* HDFC Life Insurance reported its Q1FY22 numbers wherein its net premium income grew 31.5% YoY at Rs 7,540cr. Net profit was down 40.2% YoY at Rs 269.6cr. Solvency ratio stood at 203% as against 190% YoY.

* Swaraj Engines Q1FY22 revenue came in at Rs 314.7cr as against Rs 117cr YoY. Its net profit stood at Rs 33.7cr as against Rs 7.8cr YoY.

* L&T Construction, the construction arm of L&T has won a slew of orders in India and abroad for its various businesses such as Building & factories and Power, Transmission and Distribution.

Derivative Ideas

APOLLOHOSP FUTS added around 4% 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 APOLLOHOSP in cash as per below levels.

Strategy:- BUY APOLLOHOSP BETWEEN 3860-3870 STOPLOSS 3825 TARGET 3950.

Investment Pick - CSB Bank Ltd.

Established in 1920, CSB Bank Ltd (known as The Catholic Syrian Bank) is one of the oldest private sector banks in India. It has a significant network in Kerala, Tamilnadu, Karnataka and Maharashtra. At present, 90% of the branches are in these four states and the remaining 10% is spread across other states in India. The bank operates mainly in four business areas namely SME banking, retail banking, wholesale banking and treasury operations.

We believe CSB bank is well placed as it has a strong gold loan book, prudent management team and steady financials with improved asset quality. Further, a well-planned strategy like betting on less risky businesses such as agriculture, food & service, etc. and avoiding risky unsecured loans augurs well for future growth. From a long term perspective, we are optimistic on the company’s growth prospects thus initiating a Buy on the stock with a target price of Rs 432.

Buy - CSB Bank Ltd @ 9-12 Months CMP 341.95 TGT 432.

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