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Nifty Outlook

The Indian markets opened on a firm note following positive global cues. The RBI monetary policy too came inline with expectations as the MPC maintained status quo on rates and retained its accommodative stance.The Nifty index ended higher by 0.6%. The broader markets performance was mixed as BSE Midcap underperformed and ended flat whereas Smallcap index ended higher by 0.9%. Amongst the sectors, mixed trend was witnessed wherein Realty, FMCG, Healthcare ended with losses whereas IT, Oil & Gas and Consumer Durables ended with gains.

The markets would first react to TCS numbers on Monday. In the near term, earnings season would induce stock specific volatility and dictate the trend for the markets. Further, key macro data like IIP, CPI and WPI would be actively tracked.

News

* Motherson Sumi Systems announced the acquisition of a majority stake in CIM Tools Private Limited. This milestone acquisition will mark Motherson SUmi's entry into the aerospace industry. It will acquire 55% stake from the promoters of CIM Tools Private Limited.

* Carborundum Universal completed the acquisition / investment in the equity share capital of PLUSS Advanced Technologies Private Limited (PLUSS) aggregating to 71.99% of the paid-up equity capital.

* Zydus Cadila has received tentative approval from the USFDA to market Adapalene and Benzoyl Peroxide Gel 0.3%/2.5%. Adapalene and Benzoyl Peroxide combination is used to treat acne.

Derivative Ideas 

NIFTY FUT has added around 5% in open interest as fresh long built up was seen in it. Current chart pattern also indicates further upmove in its price. We suggest buying call option as per below levels.

Strategy:- Buy nifty 14th OCT 18000 CE@65 and sell 18150 CE@25 spread at 40, sloss at 20, trgt 80.

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 994.7 TGT 1,237

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