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Nifty Outlook

Markets traded lackluster and ended marginally in the red, in continuation to the prevailing consolidation phase. The benchmark started on a muted note tracking unsupportive global cues and mixed results from the IT major, TCS and it largely remained underwater for most of the session. It was the underperformance of the banking pack combined with profit taking in auto and IT stocks that added pressure. Consequently, Nifty settled at 15,690 levels; down by 0.2%. However, the broader market managed to outperform wherein midcap and smallcap ended higher in the range of 0.5%-0.6%.

Going ahead, markets would take cues from earnings announcements and economic data i.e. IIP & CPI. Besides, global cues and fluctuation in crude oil will also be closely monitored. Indications are in the favour that Nifty may consolidate further in the prevailing range so traders have no option but to maintain sector/stock specific approach while maintaining the positive bias till Nifty holds 15,450 zone.

News

* HG Infra Engineering announced that it has been declared as L-1 bidder by National Highways Authority of India for the project in the state of Delhi with estimated project cost of Rs 1647cr. The project is to be completed in 2 years.

* BHEL bags order worth Rs 1,405cr for the supply of 12 nuclear steam generators from Nuclear Power Corporation of India Limited. The steam generators will be manufactured at the Tiruchirapalli plant of BHEL.

* Ashoka Buildcon received Letter of Award from IRCON International worth Rs 482.3cr.

Derivative Ideas

MFSL 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 MFSL in cash as per below levels

Strategy:- BUY MFSL BETWEEN 1060-1065 STOPLOSS 1040 TARGET 1105.

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 180.05 TGT 222

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