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Nifty Outlook

Markets traded volatile for yet another session and lost nearly half a percent. The benchmark opened with an uptick but feeble global cues mainly from Asian counterparts combined with a decline in select index majors pushed the index lower as the day progressed. Consequently, the Nifty index ended lower by 0.5% to settle at 15,746 levels. Most sectors traded in tandem with the benchmark and traded southward wherein disappointing numbers led the pharma index to end with a sharp cut of over 4%. The broader markets too ended in the red where the midcap and smallcap index lost 0.7% and 0.1% respectively

The tussle is still on over the next directional move in the index and there’s no clear indication yet. Excessive volatility due to prevailing earnings season and upcoming monthly expiry of derivatives contracts are further adding to the participants’ worries. We reiterate our view to restrict leveraged positions and wait for clarity.

News

* Dr Reddy’s reported a revenue growth at 11.4% YoY to Rs 4,919.4cr in Q1FY22. The operating profit of the company went down 13% to Rs 1019cr YoY. The net profit dropped by 1.5% YoY at Rs 570.8cr.

* Canara Bank NII was up 0.8% at Rs 6,146.6cr against Rs 6,095.5cr. Its reported net profit came in at Rs 1,177.5cr against Rs 406.2cr in June 2020 quarter.

* Ramco Cements standalone revenue was up 18% YoY at Rs 1,229cr against Rs 1,042cr in Q1FY21. The net profit also rose 54.2% YoY at Rs 169cr against Rs 109.6cr YoY.

Derivative Ideas

PVR FUTS added around 6% 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 PVR in cash as per below levels.

Strategy:- BUY PVR BETWEEN 1340-1350 STOPLOSS 1320 TARGET 1400.

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 349.65 TGT 432.

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