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Nifty Outlook

Markets traded volatile in a range and settled almost unchanged, in continuation to the prevailing consolidation phase. On the sector front, a mixed trend was witnessed as Consumer Durables, Metals and Oil & Gas ended with losses whereas Banking and IT posted healthy gains. Amid all, the market breadth was slightly skewed towards the negative side.

The recent consolidation in the index is in line with expectations and there’s no sign of exhaustion yet. With earnings season largely behind us, global cues will dictate the market trend ahead. On the index front, a decisive break above 15,250 would pave way for 15,500 levels in Nifty. We would remain cautiously optimistic on markets.

News

* Finolex Cables reported its numbers for Q3FY21 wherein revenue was up 18.2% YoY to Rs. 830 cr. Its net profit grew by 43.1% YoY to Rs. 147 cr.

* Voltas announced that it has approved the transfer of its domestic projects business relating to mechanical electrical and plumbing I Heating, Ventilation and Air- Conditioning and Water projects, Mining and Construction Equipment business and Textile Machinery Division to its wholly owned subsidiary Universal MEP Projects & Engineering Services by slump sale through a business transfer agreement to be executed between the company and UMPESL.

* Motherson Sumi reported its numbers wherein revenue was up 13.9% YoY to Rs. 17,092 cr. Its net profit jumped four fold to Rs. 1,268 cr in Q3FY21.

Derivative Ideas

Banknifty FUT added around 15% in open interest addition as LONG buildup was seen in it in till closing time. Current chart pattern also indicates further up move in its price. We suggest buying Banknifty 18th Feb 37000 CE as per below levels.

Strategy:- BUY 18th Feb Banknifty 37000 CE@ BETWEEN 100-120 SL 40 TARGET 200.

Investment Pick - Britannia Industries Ltd.

Britannia Industries (BRIT) posted mixed numbers wherein revenue was below our expectation while profit grew strong. Revenue came in at Rs 3165.6cr, up by 6.1% YoY. On operational front, its EBITDA grew by 21.7% YoY to Rs 611.5cr, while margin expanded by 248bps on the back of cost efficiencies measures.

The company reported healthy growth of 22.4% YoY in net profit at Rs 452.6cr with margin expansion of 190bps YoY to 14.3%. Going forward, we remain positive on the company’s long term growth as the focus would be enhancing sales, improving margins via cost efficiency measures and strengthening distribution reach. Maintain a Buy.

Going forward, BRIT strategy would be to drive strong growth by launching new and innovating products, focus on brand building and strengthening distribution reach. Besides its efforts on improving margins via cost efficiency would be its core agenda. Apart from this, strong growth momentum from rural and international businesses will continue to support and lead to market share gains.

Further along with the optimistic management plan the company has strong balance and decent cash flow which would aid growth. Thus, we have a positive view on the stock for long term and have maintained a buy rating on the stock with a target price of Rs 4,265.

Buy Britannia Industries Ltd @ 9-12 Months CMP 3,462.75 TGT 4,265

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