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Nifty Outlook

Markets started the week on a robust note and made a new record high, largely led by firm global cues and encouraging domestic macro-economic data. The benchmark opened gap up and hovered in a range for most of the session however renewed buying in the last hour helped the index to close around the day’s high.

Consequently, the Nifty index closed at 15,315 levels, up by 1%. A mixed trend continued on the sectoral front wherein banks and realty were the top gainers that supported the rally while FMCG, IT and consumer durables ended in the red.

Markets have resumed the trend after a week-long consolidation phase and we are now eyeing the 15,500 in Nifty. With no major events, participants should keep a close watch on global markets for cues. Also, maintain focus on the selection of stocks and avoid a contrarian approach.

News

* TVS Motors announced that it has tied new distribution partnership with Public Motors, part of the reputed Ghaf Investments L.L.C, in UAE. As a part of this association, a 2000 sqft marquee showroom was inaugurated, along Sheikh Zayed Road in Dubai, which would provide a wide range of two-wheelers along with the spare parts and also provide service facility.

* Shilpa Medicare announced the launch of Sunitinib Capsules, under the brand name SUNISHIL. It has launched in three strengths, 12.5mg, 25mg and 50 mg at an attractive price for the benefit of patients.

* V2RETAIL informed that the company has opened 1 new retail store located at Prayagraj, Uttar Pradesh. Thus, at the given point, total of 91 retail stores are operational.

Derivative Ideas

CUMMINSIND FUT added around 10% in open interest addition as LONG buildup was seen in it in till closing time. Current chart pattern also indicates further up move in its price. We suggest buying CUMMINSIND as per below levels.

Strategy:- BUY CUMMINSIND AT 758 SLOSS AT 750 TARGET 774.

Investment Pick - Britannia Industries Ltd.

Britannia Industries (BRIT) posted mixed numbers wherein revenue was below our expectation while profit grew strong. Revenue came in at Rs 3165.6cr, up by 6.1% YoY. On operational front, its EBITDA grew by 21.7% YoY to Rs 611.5cr, while margin expanded by 248bps on the back of cost efficiencies measures.

The company reported healthy growth of 22.4% YoY in net profit at Rs 452.6cr with margin expansion of 190bps YoY to 14.3%. Going forward, we remain positive on the company’s long term growth as the focus would be enhancing sales, improving margins via cost efficiency measures and strengthening distribution reach. Maintain a Buy.

Going forward, BRIT strategy would be to drive strong growth by launching new and innovating products, focus on brand building and strengthening distribution reach. Besides its efforts on improving margins via cost efficiency would be its core agenda. Apart from this, strong growth momentum from rural and international businesses will continue to support and lead to market share gains.

Further along with the optimistic management plan the company has strong balance and decent cash flow which would aid growth. Thus, we have a positive view on the stock for long term and have maintained a buy rating on the stock with a target price of Rs 4,265.

Buy Britannia Industries Ltd @ 9-12 Months CMP 3,462.75 TGT 4,265

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