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Nifty Outlook

Markets traded lackluster and ended marginally higher, in absence of any major trigger. The tone was muted in the beginning however healthy buying in select heavyweights like Reliance combined with stocks from the metal and financials space aided the index to inch higher as the session progressed. The broader market indices continued their underperformance and ended lower in a range of 0.3-0.8%.

As the results season is largely behind us, domestic factors viz. updates on further unlocking and pace of vaccination will remain in focus. Meanwhile, performance of the global indices may induce further volatility. Since we’re seeing limited participation, traders should focus on sectors which are trading in sync with the benchmark and wisely choose the stocks

News

* Easy Trip Planners reported a jump of 189% YoY in its revenue of 34.8cr in Q1FY22. Its net profit was up 518% YoY to Rs 15.4cr.

* Devyani International announced that it has entered into a revised development agreement for its existing Costa business. Further, it has been granted development rights for PAN India in a phased manner.

* Gravita India informed that the company has increased capacity of its existing recycling unit by 10,200 MTPA and as on date the total capacity has reached to 38,200 MTPA. The plant is situated at Chittoor, Andhra Pradesh and it will cater to the needs of domestic as well as international customers.

Derivative Ideas 

CUMMINSIND FUTS added around 15% 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 CUMMINSIND as per below levels.

Strategy:- BUY CUMMINSIND BETWEEN 970-974 SL 945 TARGET 1020.

Investment Pick - Britannia Industries Ltd.

Britannia Industries (BRIT) posted a muted set of numbers for Q1FY22. Its revenue was down 0.5% YoY to Rs 3,403.5cr. Its EBITDA and PAT de-grew by 22.8% and 28.7%YoY. The company’s EBITDA and PAT margins too were severely impacted as it declined by 469bps and 449bps due to high expenses. In the near term, high raw material prices and slowing demand will continue to impact the performance. However, going forward, its focus would be on innovating products, improving margins via cost efficiency measures and gaining market share. Maintain Buy.

BRIT is one of the leading FMCG brands in India with a strong focus on innovation, brand building and expanding distribution reach. It is continuously gaining market share via product launches and re-launches in domestic and international markets. Besides, to manage profitability and margins, the company will drive cost efficiencies and take price increase once the demand scenario stabilizes. On the financial front, the company has a strong balance sheet and decent cash flow which is positive. From a long term perspective, we maintain “buy” rating with a target price of Rs 4,265.

Buy Britannia Industries Ltd @ 9-12 Months CMP 3,655.3 TGT 4,265

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