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Nifty Outlook

Markets traded volatile and ended marginally in the green, in continuation to the prevailing trend. The benchmark opened flat amid weak global cues and inches further lower as the day progressed. However, buying in banking, metal and media counters triggered a rebound in the latter half and helped the index to close around the day’s high. Finally, the Nifty ended with gains of 0.3% at 17,992 levels. The border indices continued their outperformance and ended in the range of 0.6-0.8%.

Markets will first react to IIP and CPI numbers on Wednesday and then the focus will shift to earnings as two IT majors, Infosys and Wipro, will announce their numbers. Needless to say, global cues would continue to trigger volatile swings in between. We reiterate our positive yet cautious view on markets and suggest preferring hedged positions.

News

* GM Breweries Q2FY22 revenue was up 59.8% YoY at Rs 116cr. It posted a 95.5% jump in its net profit to Rs 21.9cr.

* Tata Metaliks Q2FY22 revenue was up 24.1% YoY at Rs 644.8cr. Its net profit was down 33.4% YoY at Rs 54.6cr.

* Tata Power Solar, a wholly-owned subsidiary of Tata Power, has received ‘Letter of Award’ to build 100 MW of Distributed Ground Mounted Solar projects for Energy Efficiency Services Ltd. The total order value of projects is Rs 538cr and the commissioning date of the projects is set for 12 months.

Derivative Ideas 

BANKNIFTY FUT has added around 6% in open interest as fresh long build up was seen in it. Current chart pattern also indicates further upmove in its price. We suggest buying call option as per below levels.

Strategy:- Buy Banknifty 14th Oct 39000 CE@40-48, sloss at1, trgt 80.

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 983.5 TGT 1,237

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