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Nifty Outlook

Markets started the week on an optimistic note amid supportive global cues. The benchmark traded with positive bias throughout the day and healthy buying was seen across sectors. Further, the news of a steady fall in new COVID cases and announcements of easing in restrictions by several states boosted sentiment. Consequently, the Nifty inched further higher and ended at 15,752 levels, up by 0.5%. On the broader front, midcap and smallcap, outperformed and gained in the range of 0.8-1.4%.

All eyes are on PM Modi’s speech scheduled in the evening, for details on the vaccination drive and the roadmap for further ease in restrictions. And, we may see the reaction of the same in early trade tomorrow i.e. June 8.

On the benchmark front, the recent underperformance from the banking space is certainly weighing on the sentiment and might trigger some profit taking too. However, buoyancy in other sectors viz. energy, IT and auto would cap the fall. Amid all, we advise continuing with bullish bias and use dips to add quality names.

News

* Central Bank of India posted Q4FY21 results, NII decreased by 21.3% to Rs 1,516.4cr. the bank post net loss of Rs 1,349cr as against loss of Rs 1,529cr YoY.

* MRF reported Q4FY21 numbers, its revenue increased by 31% YoY to Rs 4,817cr. Its net profit declined 51.1% YoY to Rs 332cr from Rs 679cr in Q4FY20.

* Lupin announced that it has received approval for its Emtricitabine and Tenofovir Disoproxil Fumarate Tablets, 200 mg/300 mg, from the USFDA to market a generic equivalent of Truvada® Tablets, 200 mg/300 mg, of Gilead Sciences, Inc. The product will be manufactured at Lupin’s facility in Nagpur, India.

Derivative Ideas

BATAINDIA FUTS added around 24% 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 BATAINDIA in cash as per below levels.

Strategy:- BUY BATAINDIA BETWEEN 1560-1565 STOPLOSS 1535 TARGET 1620.

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 407.05 TGT 479

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