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Nifty Outlook

Markets witnessed a sharp decline and lost nearly 2%, pressurized by feeble cues. Initially, weak signals from the global counterparts were weighing on the sentiment which further deteriorated with a decline in index majors. Nifty slipped below the crucial support zone of the 18,000 mark and settled close to the 17,865 zone. Selling pressure was widespread and most sectoral indices ended lower wherein banking, metal and realty were among the top losers

This fall in the index has derailed the recent recovery and we may see a further slide in the following sessions. On the benchmark front, Nifty has next support around 17,550-17,650 zone. We reiterate our cautious view on markets and suggest restricting leveraged positions.

News

* Indian Bank Q2FY22 net interest income was down 1.5% YoY at Rs 4,083.5 cr. Its gross NPA was at 9.6% versus 9.7% QoQ and net NPA was at 3.3% versus 3.5%, QoQ. It posted net profit of Rs 1,089.2cr versus Rs 412.3cr YoY.

* Coromandel International Q2FY22 Revenue jumped 133.3% at Rs 6,147.5 cr. Its net profit went down 11.8% YoY to Rs 519.3cr.

* Marico Q2FY22 revenue jumped 21.6% at Rs 2,419 cr YoY. EBITDA margin came in at 17.5% against 19.6% (YoY). Its net profit was up 15.8% at Rs 316cr.

Derivative Ideas 

NIFTY FUT has added around 12% in open interest as short rolls was seen in November futures. Current chart pattern also indicates further downside levels in Index at around 17500 levels.

Strategy:- BUY 25 Nov NIFTY 17500 PE@140-150, sloss at 70, trgt 300

Investment Pick - The Ramco Cements Ltd

Ramco Cements Ltd (TRCL) is the fifth-largest cement producer in India and the most popular cement brand in South India. The company is six decades old and manufactures ready mix concrete, dry mortar products and various grades of cement. It has a presence across ten states of India with four integrated plants and six grinding units. Apart from South India, it is growing its presence in East India, Sri Lanka and the Maldives

We have a positive outlook given its strong brand name, leadership position in South India and product portfolio. In addition, its focus on expanding capacity, increasing utilization levels and cost-saving initiatives would further help in improving profitability. We estimate its Revenue/EBITDA/PAT to grow at a CAGR of 12%/13.5%/15.5% respectively over FY21-24E and have initiated a Buy on the stock with a target price of Rs 1,237.

Buy - The Ramco Cements Ltd @ 9-12 Months CMP 1,020.45 TGT 1,237

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