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Nifty Outlook

Markets traded lackluster in a narrow range and ended marginally lower, in absence of any major trigger. After the initial uptick, the benchmark drifted marginally lower and traded sideways thereafter. A mixed trend was witnessed on the sectoral front wherein buying in realty, PSU banks and auto pack kept the traders busy. The broader indices outperformed and gained nearly one percent each. The Nifty index ended lower by 0.2% at 17,889 levels.

Participants are maintaining a cautious stance ahead of the US Fed meet and we may see a similar trend on Wednesday as well. However, the scheduled weekly expiry may trigger volatile swings in the index. Stocks, on the other hand, are still seeing noticeable traction so the focus should be on identifying the sectors/themes which are playing out well and select the stocks accordingly.

News

* BSE today signed a MoU with HDFC Bank to further encourage and promote listing of Start-ups and SMEs across India.

* Jindal Steel & Power reported its numbers wherein revenue jumped 67% YoY to Rs. 13,612 cr. Its net profit came in at Rs. 2,584 cr as against Rs. 837 cr.

* HPCL reported its Q2FY22 numbers wherein revenue was up 12.9% YoY. Its net profit came in at Rs. 1,924 cr as against Rs. 1,795 cr in the same quarter previous year.

Derivative Ideas

ITC FUT has added around 1% in open interest as fresh long positions. Current chart pattern also indicates further upside levels in stock at around 236 levels.

Strategy:- BUY ITC at 225-227, sloss at 219, trgt 235.

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 1,067.35 TGT 1,237

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