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Nifty Outlook

Markets traded lackluster and lost nearly half a percent, in absence of any major trigger. Firm global cues triggered an upbeat start but it couldn’t hold for long and gradually drifted lower as the day progressed. Among the sectors, profit taking in metal and IT majors combined with the prevailing underperformance of the banking pack led to the decline. Consequently, the Nifty ended lower by 0.5% at 15,687 levels. The broader markets too ended in the red in the range of 0.2-0.4%.

We’re currently seeing a time-wise correction in the market and it’s likely to end soon. The scheduled monthly expiry of the June month contracts combined with AGM of index heavyweight, Reliance, will keep the participants busy on Thursday i.e. June 24. We reiterate our advice to continue with the “buy on dips” approach until we see some sign of exhaustion or trend reversal.

News

* Sobha’s Q4FY21 revenue fell to Rs 553.4cr from Rs 910.1cr YoY. Its net profit stood at Rs 17.9cr as against Rs 50.7cr in Q4FY20.

* Jaypee Infratech revenue fell to Rs 244.6cr from Rs 383.2cr YoY. It reported loss of Rs 491.6cr in Q4FY21 as against loss of Rs 940.5cr in Q4FY20.

* Precision Wires Q4FY21 Revenue was up 25.2% at Rs 652.7cr. Its net profit was up 22.6% YoY at Rs 16.7cr.

Derivative Ideas

SIEMENS JULY FUTS added around 35% 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 2010-2015 STOPLOSS 1980 TARGET 2060.

Investment Pick - Finolex Industries Ltd.

Finolex Industries Limited (FIL) is a leading manufacturer of PVC pipes and fittings and the only backward integrated player in PVC resin. The company offers the latest range of PVC-U pipes and fittings which are used in agriculture, construction and industrial operations. It has strategically located manufacturing plants and a strong distribution network.

FIL is well established in agri pipes and has plans to expand in non-agri segment, its backward integrated manufacturing of PVC resin, strong distribution network and changing product mix would aid in earning better revenues as well as profits. Besides its strong brand recall value, growth plans and expansion in the PVC pipes segment are encouraging which makes it one of our preferred picks in this space. On the financial front, FIL has a healthy balance, decent cash flow and it has lowered its debt to comfortable levels over the years. We have initiated a BUY on the stock with a target price of Rs 222.

Buy Finolex Industries Ltd. @ 9-12 Months CMP 173.65 TGT 222

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