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Nifty Outlook

Markets started the week with modest gains amid volatility and settled around the day’s high as well. After the initial uptick, the benchmark slipped sharply lower however gradual recovery in select index majors changed the mood as the day progressed. A mixed trend was witnessed on the sectoral front however noticeable traction on the broader front kept the participants busy till the end. Finally, the Nifty index settled around 18,083; up by 0.9%.

The recent buoyancy in the global markets has relieved the participants amid mixed do mestic cues however it’s too early to call it a trend reversal. As the festive season is behind us, focus will shift back to earnings announcements. Besides, domestic macro data outcome (IIP & CPI) and global cues will be closely tracked. Nifty should make a decisive move above 18,100 to resume the trend else consolidation/profit taking would resume. Meanwhile, we recommend continuing with a stock-specific trading approach and focusing on the themes/ sectors which are seeing noticeable buying interest.

News

* The construction arm of L&T has secured orders for its businesses in India. Its Metallurgical & Material Handling business has been awarded an EPC order for 12 MTPA Dry Circuit Systems on a turnkey basis from NMDC. Its Buildings & Factories business has secured a prestigious order from DRDO to construct their Flight Control System Facility at ADE, Bengaluru.

* Karur Vysya Bank Q2FY22 net interest income was up 13.1% YoY at Rs 680.3cr. Its Gross NPA was at 7.4% as against 8% and net NPA was at 3% versus 3.7%, QoQ. It reported a 44% YoY jump in its net profit at Rs 165.5cr.

* Inox Wind announced that it has bagged an order for a 150 MW wind power project from NTPC Renewable Energy Ltd, a wholly owned subsidiary of NTPC Ltd, to be commissioned in the state of Gujarat.

Derivative Ideas

NIFTY FUT has added around 6% in open interest as fresh long build up. Current chart pattern also indicates further upside levels in index at around 18300 levels.

Strategy:- BUY NIFTY 18th NOV 18300 CE@80-90, SLOSS AT 48, TRGT 150.

Investment Pick - The Ramco Cements Ltd.

Ramco Cements Ltd (TRCL) is the fifth-largest cement producer in India and the most popular cement brand in South India. The company is six decades old and manufactures ready mix concrete, dry mortar products and various grades of cement. It has a presence across ten states of India with four integrated plants and six grinding units. Apart from South India, it is growing its presence in East India, Sri Lanka and the Maldives.

We have a positive outlook given its strong brand name, leadership position in South India and product portfolio. In addition, its focus on expanding capacity, increasing utilization levels and cost-saving initiatives would further help in improving profitability. We estimate its Revenue/EBITDA/PAT to grow at a CAGR of 12%/13.5%/15.5% respectively over FY21-24E and have initiated a Buy on the stock with a target price of Rs 1,237.

Buy - The Ramco Cements Ltd @ 9-12 Months CMP 2,304.7 TGT 1,237

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