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Nifty Outlook

Markets started the week on a firm note and gained nearly a percent, in continuation to the prevailing trend. After opening marginally in red, the benchmark drifted marginally lower in the early trades but healthy buying interest in select heavyweights triggered sharp recovery as the day progressed. Consequently, the Nifty settled around the day’s high to end at 15,583 levels. Amongst the sectors, metal, banking and oil & gas were the top gainers. The broader markets also ended with decent gains but underperformed the benchmark

Markets will react to the GDP data in early trade on Tuesday i.e. June 1. Besides, participants would keep a close watch on auto sales figures. Meanwhile, the last leg of earnings season is also expected to induce stock-specific volatility. Some states have announced relaxation in restrictions and we expect further easing in the coming weeks. Amid all this, we reiterate our bullish yet cautious stance on markets and suggest aligning the positions according to the prevailing uptrend.

News

* Prakash Industries reported its numbers wherein revenue was up 59.4% YoY to Rs. 1,032 cr. Its net profit came in at Rs. 52 cr as against Rs. 18 cr.

* J Kumar Infraprojects has received a "Letter of Acceptance" from M/s. Mumbai Metropolitan Region Development Authority, for Part Design and Construction of Balance Works of Package CA04R Elevated Viaduct and 10 Elevated Stations of Mumbai Metro Rail Project of MMRDA, amounting to Rs 1,307 cr.

* Aurobindo Pharma reported a 2.5% decline in its revenue to Rs. 6,001 cr. Its net profit de-grew by 7.2% YoY to Rs. 802 cr.

Derivative Ideas

NATIONALUM 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 NATIONALUM as per below levels.

Strategy:- BUY NATIONALUM BETWEEN 72.50-73 STOPLOSS 71 TARGET 77.

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 398.25 TGT 479

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