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Nifty Outlook

Markets traded in a range and ended unchanged, extending the prevailing consolidation phase. Initially, the benchmark opened on firm tracking positive global cues however profit taking at the latter half trimmed all the gains. On the sectoral front, a mixed trend was witnessed. The broader indices continued their outperformance wherein both midcap and smallcap ended higher by 0.4% and 0.7% respectively.

Markets will react to the macroeconomic data viz. IIP and CPI inflation in early trade on Tuesday i.e. July 13. The tussle over the next directional move in the index is still on and upcoming earnings announcement may result in the probable breakout. Meanwhile, we suggest continuing with a selective trading approach while keeping a check on leveraged positions.

News

* SJVN Nepal has signed a USD 1.3 billion deal with India’s hydro power major Satluj Jal Vidyut Nigam (SJVN) to develop a 679-megawatt hydropower project in eastern Nepal, the second mega venture undertaken by India in the neighbouring Himalayan nation.

* Cyient announced that it has been selected by HM Land Registry (HMLR) to support its Local Land Charges (LLC) Programme.

* NMDC fixed iron ore price w .e. f. 10-07-2021. The Lump Ore (65.5%, 6-40mm) at Rs 7,450 per ton and Fines (64%, - 1Omm) at Rs 6,360 per ton.

Derivative Ideas

SIEMENS 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 SIEMENS in cash as per below levels.

Strategy:- BUY SIEMENS BETWEEN 1990-2000 STOPLOSS 1960 TARGET 2090.

Investment Pick - Finolex Industries Ltd.

Finolex Industries (FIL) Q4FY21 results were above our estimates. Revenue grew by 62.5% YoY to Rs 1,249cr largely driven by better volumes from resin business and realization from both businesses. Resin segment posted growth of 112% YoY to Rs 920.2cr while the company’s pipes and fitting segment grew by 43% YoY to Rs 901.7cr. EBITDA stood at Rs 410.1cr, up by 296% YoY while its margins witnessed strong improvement of 1936bps to 32.8%. Its net profit grew by 410% YoY to Rs 298.8cr with margin expansion of 1629bps.

FIL is well placed in the plastic pipe segment with a strong presence in agri pipes and manufacturing of resin. Going ahead, it has plans to grow in the non-agri segment, expand its manufacturing of PVC resin, increase distribution network and change product mix which will aid in earning better revenues as well as profits. Besides it has strong brand recall value, healthy balance and decent cash flow which bode well for the future growth of the company. So, we maintain a Buy rating on the stock with a target price of Rs 222.

Buy - Finolex Industries Ltd. @ 9-12 Months CMP 182.05 TGT 222.

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