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Nifty Outlook

Markets traded volatile in a range and ended unchanged, extending yesterday’s pause. Initially, the bias was slightly on the negative side amid weak global cues and profit-taking in banking, IT and FMCG majors further pushed the index lower in the first half. However, in the second half, it pared all its losses and closed flat as healthy buying was seen across auto, power and healthcare stocks. Consequently, the Nifty ended at 15,576 levels. The broader markets, on the other hand, outperformed and ended with strong gains in the range of 1.3-1.8%.

We reiterate our view to focus on stock-specific trading opportunities across sectors as the benchmark may continue to trade volatile in a range on Thursday due to scheduled weekly expiry. Needless to say, the bias is clearly on the positive side so traders should avoid contrarian trades.

News

* Sun Pharmaceutical Industries announced that one of its wholly owned subsidiaries has entered into a license agreement with Ferring Pharmaceuticals Pvt. Ltd., a subsidiary of Switzerland-based biopharmaceuticals MNC Ferring Pharmaceuticals, to commercialize a Room Temperature Stable formulation of obstetric drug, CARITEC (Carbetocin RTS) in India.

* Lupin today announced that the USFDA has accepted the Biologics License Application (BLA) for its proposed biosimilar to Neulasta (pegfilgrastim) through a filing using the 351(k) pathway.

* PVR has posted consolidated Q4 net loss at Rs 289.1 cr versus loss of Rs 74.5 cr and revenue was down 60.2% at Rs 263.3 cr versus Rs 662 cr.

Derivative Ideas

HDFCAMC FUTS added around 3% 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 HDFCAMC in cash as per below levels.

Strategy:- BUY HDFCAMC BETWEEN 2995-3000, STOPLOSS 2950, TARGET 3120.

Investment Pick - Crompton Greaves Consumer Electricals Ltd.

Crompton Greaves Consumer Electricals (CGCE) reported strong set of numbers for Q4FY21. Its consolidated revenue grew by 48.3% YoY led by strong growth across geographies and different product categories. The net profit was boosted (+144% YoY) by a one-time tax write back and a sharp rise (+72.2% YoY) in other income. In the near term, demand would be impacted on account of on-going restrictions and expect normalcy by Q2FY22.

We like CGCE for its strong growth potential, consistent rise in market share in its key segment coupled with healthy dividend pay-out ratio, strong cash flow generation, lean working capital cycle and robust return ratios. Factoring the impact of demand uncertainty in the near term, we have lowered our estimates for FY22E. We maintain a Buy on the stock with a target price of Rs. 479.

Buy Crompton Greaves Consumer Electricals Ltd. @ 9-12 Months CMP 400.9 TGT 479

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