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Nifty Outlook

Markets traded volatile for the second consecutive session and ended marginally lower. After the flat start, it traded range bound till the end however movement on the stock-specific front kept the participants busy. In between, the announcement of the status quo on key rates with an accommodative stance from the RBI review meet fell in line with the expectation. However, the SC ruling regarding the Reliance-Future merger in favor of Amazon didn’t go well with the market and triggered a sharp reaction in Reliance and Future group stocks. Amid all, the Nifty index ended lower by 0.3% at 16,254 levels. Amongst the sectors, a mixed trend was witnessed as realty, metal and capital goods ended with losses whereas IT and telecom ended with gains. The broader markets outperformed wherein both midcap and smallcap ended flat.

In absence of any major event, earnings and global cues will dictate the market trend. We suggest keeping a close watch on the banking and financial pack as they have the potential to further fuel the momentum. Going ahead, in case of any dip, the 16,150-15,950 zone would act as a cushion in the Nifty.

News

* M&M has reported revenue at Rs 11,763cr versus Rs 5,589 crore, YoY. Net profit before exceptional item stood at Rs 934cr against Rs 39cr in a year period.

* Voltas has posted 37.7% jump in its Q1 revenue at Rs 1,785.2cr against Rs 1,296.9cr, YoY and net profit was up 49.6% at Rs 122.4cr versus Rs 81.8cr in Q1FY21.

* Piramal Enterprises Consolidated revenue was down 1% at Rs 2,908.7cr against Rs 2,937.3cr YoY. Consolidated net profit was up 8.8% at Rs 539.4cr against Rs 495.6cr YoY.

Derivative Ideas 

PEL FUTS added around 11% 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 PEL as per below levels.

Strategy:- BUY PEL BETWEEN 2640-2650 STOPLOSS 2600 TARGET 2750.

Investment Pick - CSB Bank Ltd.

Established in 1920, CSB Bank Ltd (known as The Catholic Syrian Bank) is one of the oldest private sector banks in India. It has a significant network in Kerala, Tamilnadu, Karnataka and Maharashtra. At present, 90% of the branches are in these four states and the remaining 10% is spread across other states in India. The bank operates mainly in four business areas namely SME banking, retail banking, wholesale banking and treasury operations.

We believe CSB bank is well placed as it has a strong gold loan book, prudent management team and steady financials with improved asset quality. Further, a well-planned strategy like betting on less risky businesses such as agriculture, food & service, etc. and avoiding risky unsecured loans augurs well for future growth. From a long term perspective, we are optimistic on the company’s growth prospects thus initiating a Buy on the stock with a target price of Rs 432.

Buy CSB Bank Ltd @9-12 Months CMP 340.4 TGT 432

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