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Nifty Outlook

Markets traded volatile for yet another session and ended marginally in the green. After the flat start, the buying in select heavyweights, mainly from the banking pack, helped the benchmark to inch higher however profit taking resumed as the session progressed. Finally, the Nifty settled at 16,280 levels; up by 0.13%. The broader markets continued to witness selling pressure as both midcap and smallcap ended with losses of 0.9% and 2 % respectively.

Banking and financials are largely helping the index to sustain at these levels while broader indices are seeing continuous profit taking. Considering the scenario, we advise keeping extra caution in the selection of trades and preferring the sectors/stocks which are trading in line with the trend.

News

* Motherson Sumi System posted revenue at Rs 16,157.4cr against Rs 8,348.4cr which was up 93.5% YoY and net profit was at Rs 289.6cr versus loss of Rs 810cr YoY.

* Max Financial service’s revenue was up 7.9% at Rs 5,942.1cr against Rs 5,504cr and net profit was down 83.8% at Rs 21.2cr against Rs 130.9cr YoY.

* Coal India’s revenue climbed 36.8 % YoY to Rs 25,282.1cr against Rs 18,486.7cr in Q1FY21. Net profit jumped 52.8 % to Rs 3,174.1cr in Q1FY22 against Rs 2,077.5cr in corresponding quarter last year.

Derivative Ideas 

ASTRAL FUTS added around 11% in open interest as SHORT buildup was seen in it . Current chart pattern also indicates further down move in its price. We suggest selling in ASTRAL AUG FUTS as per below levels.

Strategy:- SELL ASTRAL AUG FUTS BETWEEN 2090-2095 STOPLOSS 2120 TARGET 2030.

Investment Pick - Maruti Suzuki India Ltd.

Maruti Suzuki reported weak set of numbers in Q1FY22 impacted due to lockdown and high commodity cost pressure. Its revenue was down 26% QoQ (+332.7% YoY) as volumes decline by 28.2% QoQ (+361.6% YoY). The operating margins was impacted (down 367bps) due to lower operating leverage. MSIL reported a net profit of Rs. 441 cr, down 62.2% QoQ. Going forward, the demand recovery continues to remain healthy and we expect growth momentum to strengthen as state government eases restrictions.

We expect margins could remain under pressure in the near term due to rising commodity prices. However, price hikes, better product mix and cost rationalization measures would aid margin improvement in FY23. We have tweaked our estimates for FY22 and FY23 and have maintained a Buy on the stock with a target price of Rs. 8,289.

Buy Maruti Suzuki India Ltd @9-12 Months CMP 7001.95 TGT 8,289

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