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Nifty Outlook

Markets started the week with a cut of over half a percent amid mixed cues. Initially, the benchmark opened higher, tracking firm global cues however profit taking at the higher levels trimmed all the gains and pushed the index further lower as the day progressed. The Nifty index eventually ended at 17,368.25 levels; down by 0.7%. The sectoral indices traded mixed wherein oil & gas, telecom and realty ended with losses.

Markets are currently dealing with mixed cues. At one end, the encouraging updates on the new COVID variant have eased some pressure however caution ahead of the US Fed meet amid the inflation woes is keeping the participants on the edge. In the current scenario, it’s prudent to restrict leveraged positions and let the markets stabilise.

News

* The board of Greenlam South, a wholly owned subsidiary of Greenlam Industries has approved to set up a greenfield project for manufacturing of Particle Board and allied products at Naidupeta, Nellore in Andhra Pradesh.

* BLS International signs a contract with the Embassy of India in Kuwait for Consular, Passport & Visa services.

* Diversified financial group Edelweiss on Monday said it has increased its stake in its associate company — Edelweiss Wealth Management to 44.16%.

Derivative Ideas

TATAMOTORS ended flat on 13th Dec. The Derivative data suggests a good base at 485-490 Levels. Should see a good upmove in this counter. The next Resistance lies at 520.

Strategy:- BUY TATAMOTORS 500 CE@10-12, SLOSS AT 6, TRGT 20.

Investment Pick - Kansai Nerolac Ltd.

Kansai Nerolac Paints Ltd (KNPL) posted mixed numbers for Q2FY22. Its revenue grew by 17.1% YoY to Rs 1,619.6cr, while its EBITDA and PAT witnessed de-growth of 39% YoY and 48% YoY. Demand from decorative was steady while lower demand from the industrial segment impacted the performance.

KNPL is one of the leaders in the industrial paint segment wherein it garners 40-45% revenue from the industrial segment while remaining from decorative. Going ahead, the company’s strategy is to innovate products in both its segments, expand reach, and focus on product mix as well as gain market share from unorganized segments. Besides, focus to remain on managing cost and operating efficiency which will help in margin growth. Over the medium to long term, we have a positive view on the stock and have maintained a buy with a target price of Rs 705.

Buy - Kansai Nerolac Ltd. @ CMP :- 595.5 Recommendation Price 605 Target 705 Duration 9-12 Months.

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