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Nifty Outlook

Markets traded under pressure for the second consecutive session and lost nearly a percent, in continuation to the prevailing corrective phase. After the sharp decline in early trades, the benchmark recovered almost vertically in no time but selling pressure at the higher levels again pushed the bulls on the back foot. Finally, the Nifty ended down by 1% at 17,672 levels. A mixed trend was witnessed on the sectoral front wherein IT and banking were the top losers.

Earnings disappointment combined with feeble global cues is weighing on the sentiment. Apart from the earnings announcements, participants will be closely eyeing the upcoming US Fed meet and auto sales numbers for cues. Indications are pointing towards further slides so participants should maintain a cautious approach and prefer a hedged approach.

News

* Escorts Q2FY22 revenue was up 1.4% YoY at Rs 1,662.3 cr. Its net profit went down 22.9% YoY at Rs 176.7cr.

* Emami Q2FY22 Revenue was up 7.3% at Rs 788.8 cr. Its net profit jumped 56.5% YoY at Rs 185.3 cr.

* Dr Reddy's Labs Q2FY22 revenue rose 18% at Rs 5,763 cr YoY. Its net profit was up 30% YoY at Rs 992cr.

Derivative Ideas 

BHEL FUT has added around 5% in open interest as fresh long positions. Current chart pattern also indicates further upside levels in stock at around 75evels.

Strategy:- BUY BHEL in cash market at 67-68, sloss at 62, trgt 75.

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 1,066.5 TGT 1,237

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