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Nifty Outlook

Markets witnessed a decent rebound and gained nearly a percent, taking a breather after the recent fall. The benchmark opened with an uptick and inched further higher however selling pressure in the latter half trimmed the gains. Consequently, the Nifty index settled around 16,770 levels; up 0.9%. Most of the sectoral indices ended higher wherein IT, metal and realty were among the top gainers. The broader indices also witnessed respite and gained over a percent each.

The updates on the new variant are keeping the choppiness high globally and we expect this trend to continue in the near future. Among the sectors, only the IT pack has been showing a steady uptrend while others are trading mixed. In case of a further rebound, Nifty would face a hurdle around the 17,000-17,150 zone. Participants should limit leveraged positions until we see some stability.

News

* Larsen & Toubro International FZE, a wholly owned subsidiary of L&T has entered into a Share Purchase Agreement on Dec 20, 2021 to purchase, stake in Intelliflux Controls INC., a Delaware Corporation.

* Stelis Biopharma, the biotech division of Strides Pharma Science, has commissioned its large-scale fully integrated vaccine manufacturing facility at Bengaluru, India. The facility was successfully inspected by the Central Drugs Standard Control Organization (CDSCO). Stelis has also received an initial Export No Objection Certificate from CDSCO to export up to 50mn doses of the Sputnik Light vaccine.

* Exide Industries announced that it is going to set up a multi-gigawatt lithium-ion cell manufacturing plant. It plans to apply for and participate in the production-linked incentive scheme for the National Programme on Advanced Chemistry Cell battery storage, issued by the Ministry of Heavy Industries.

Derivative Ideas

IGL gained 2.41% and closed at 493.5 on 21st Dec. The Scrip took Support from its important zone of 475-478 zone. The Derivatives Data suggests a good Long Buildup in IGL Futures . We recommend to go Long in IGL with a SL of 478.

Strategy:- BUY IGL@485-488, SLOSS AT 478, TRGT 502.

Investment Pick - Kansai Nerolac Ltd.

Kansai Nerolac Paints Ltd (KNPL) posted mixed numbers for Q2FY22. Its revenue grew by 17.1% YoY to Rs 1,619.6cr, while its EBITDA and PAT witnessed de-growth of 39% YoY and 48% YoY. Demand from decorative was steady while lower demand from the industrial segment impacted the performance.

KNPL is one of the leaders in the industrial paint segment wherein it garners 40-45% revenue from the industrial segment while remaining from decorative. Going ahead, the company’s strategy is to innovate products in both its segments, expand reach, and focus on product mix as well as gain market share from unorganized segments. Besides, focus to remain on managing cost and operating efficiency which will help in margin growth. Over the medium to long term, we have a positive view on the stock and have maintained a buy with a target price of Rs 705.

Buy - Kansai Nerolac Ltd. @ CMP :-  591.4 Recommendation Price 605 Target 705 Duration 9-12 Months.

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