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Nifty Outlook

Markets traded under pressure and lost nearly a percent, tracking weak global cues. The benchmark opened gap down and drifted further lower as inflation in the US hit a 30-year high and it may result in earlier than expected rate hike by the US Fed. The selling pressure was widespread and mostly sectors ended in the red. Consequently the Nifty ended lower by 0.8% at 17,874 levels. The broader markets too lost in the range of 0.5-0.7%.

We may further slide in the index ahead however the major concern is volatility and we do not expect any relief from that front. The upcoming macroeconomic data, IIP and CPI Inflation and scheduled MSCI rebalancing would keep the choppiness high. Besides, movement in global markets as well as fluctuation in currency (especially dollar) and crude prices will be closely tracked. On the benchmark front, Nifty has next major support around 17,750-17,650 zone. Traders should align their positions accordingly and prefer hedged approach.

News

* Godrej Consumer Products Q2FY22 consolidated revenue stood at Rs 3,163.6cr with domestic volume growth of 4%. Its net profit came in at Rs 479 cr.

* Hindustan Aeronautics Q2FY22 revenue was up 14.4% YoY at Rs 5,551.2 cr. Its net profit rose by 38.3% YoY to Rs 848.2cr.

* Bharat Dynamics Q2FY22 revenue was up 79.4% YoY at Rs 503.8 cr. It reported 64.9% YoY jump in its net profit to Rs 43.2cr.

Derivative Ideas

NIFTY FUT has added around 8% in open interest as fresh shortbuild up. Current chart pattern also indicates further downside levels in Index around 17600 levels.

Strategy:- SELL NIFTY 18 NOV 18300 CE@30-35, SLOSS AT 55, TRGT 10.

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 1,069.5 TGT 1,237

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