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Nifty Outlook

Markets witnessed a roller-coaster ride on the Union Budget day but finally settled with the gains of over one and a half percent. The tone was upbeat from the beginning, taking cues from the global counterparts however a bout of the volatility after the FM’s speech kept the participants on their toes. Finally, the Nifty index managed to close around the day’s high around 17,576 levels. On the sector front, mostly traded in tandem with the benchmark and ended higher. The broader indices too ended in a positive range of 0.6-1.1%.

It’s a pro-growth budget and markets have also given a thumbs-up with decent close. We may see an overhang for a session or two and then the focus would shift back to corporate earnings and global cues. Meanwhile, sectors like infrastructure, housing, agriculture and defence would remain on the participants’ radar post budget for trading & investment opportunities. We recommend keeping a positive yet cautious stance and continuing with hedged positions.

News

Maruti Suzuki's reported January 2022 monthly sales numbers wherein it sold 154,379 units. Domestic sales stood at 132,461 units, sales to other OEM were 3,981 units and exports of 17,937 units.

Tata Motors total sales for the month of January grew by 27.3% at 76,210 units against 59,866 units YoY. Total commercial vehicle sales rose 7% at 35,268 units against 32,816 units YoY. Total M&HCV sales were up 12.7% at 10,655 units against 9,452 units YoY. Domestic passenger vehicle sales jumped 51.1% at 40,777 units against 26,978 units YoY.

M&M’s January tractor sales stood at 22,682 units down 35% against 34,778 units YoY. Domestic tractor sales went down 37% at 21,162 units against 33,562 units YoY. Exports grew 25% at 1,520 units against 1,216 units YoY.

Derivative Ideas

HCLTECH gained 3.04% and closed at 1132.8 on 1st Feb. The stock has seen a good correction along with its pack. After taking the support at 1070 level, the stock gave a good upmove. Now closing above its 100 EMA with fresh Longs added in its FUT, the counter is poised to test its resistance at 1165. We recommend to go Long in HCLTECH.

Strategy:- BUY HCLTECH @ 1118-1124, SLOSS AT 1100, TRGT 1155.

Religare New Year Pick -  Sudarshan Chemical Industries Ltd.

Sudarshan Chemical Industries (SCI) is one of the leading producers in India and has been serving for over 70 years in Indian and global pigment markets. It manufactures an extensive range of organic, inorganic, effect pigment and dispersions. It has two manufacturing facilities located at Roha and Mahad in Maharashtra, India and 2 dedicated R&D centre globally. In addition, it exports to 85+countries and has 10 sales offices in India, US, Europe, China, Mexico, and Japan.

We believe SCI is well placed to capitalize opportunities in the global as well as Indian pigment sector driven by positive industry growth trend, high entry barrier in the sector and wide range of products in their portfolio. Besides, they’re highly cost competitive amongst the peer group. On the financial front, the company’s track record has been decent and we have estimated its revenue and PAT to grow at a CAGR of 14.5% and 14% over FY22-24E. We have a positive view on the company and have initiated a Buy on the stock with a target price of Rs 720.

Buy - Sudarshan Chemical Industries Ltd. @ CMP :-  586.8 Recommendation Price 576 Target 720 Duration 9-12 Months.

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