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Nifty Outlook

Markets traded volatile and settled with a cut of over half a percent. After opening on a positive note, the benchmark traded in a tight range in the first half however selling pressure in auto, capital goods and oil and gas majors in the second half dragged the benchmark southwards and erased all its gains in no time. Consequently, the Nifty ended with losses of 0.7% at 15,635 levels. The broader markets too ended lower in the range of 0.7-1%. On the sector front, barring power and consumer durables, all the other indices ended in the red.

We’re seeing profit-taking and it’s healthy however volatility remains high during such a corrective phase which easily unsettles the participants. We thus advise keeping extra caution in managing overnight risk and preferring low beta counters over others. On the benchmark front, the previous high zone around 15,400 would act as critical support in case of further correction while 15,800 will continue to act as an immediate hurdle.

News

* GAIL India reported Q4FY21, its revenue fell 0.1% QoQ to Rs 15,449cr. The company's net profit rose 28.3% QoQ to Rs 1,908cr.

* Indian Metals Q4FY21 revenue rose 52% YoY to Rs 576.1cr . Its net profit stood at Rs 65.4cr as against a loss of Rs 51.9cr YoY.

* Sterlite Technologies announced a partnership with Vocus Group, a specialist fibre and network solutions provider in Australia. This deal will strengthen Sterlite Technologies’ presence in the Australian market, helping network creators deploy high capacity nationwide networks faster.

Derivative Ideas

IGL FUTS added around 7% 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 IGL in cash as per below levels.

Strategy:- BUY IGL BETWEEN 525-527 STOPLOSS 517 TARGET 550.

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 170.65 TGT 222

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