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Nifty Outlook

The bears continued to dominate and dragged the index lower as weak global cues impacted sentiment. Besides, the subdued listing of Paytm added to the pressure as the session progressed. The scheduled weekly expiry further added to the volatility. Finally, the Nifty index ended lower by 0.7% to close at 17,764. The broader markets also witnessed selling pressure and lost over one percent each. Amongst the sectors, auto, metal and IT were the top losers.

We reiterate our cautious view on the markets, given the feeble global cues. Besides, the charts are also indicating the prevailing corrective move to extend further, with immediate support at 17,500 or lower in Nifty. In case of a rebound, the 17,900-18,000 zone would act as a resistance. Considering the scenario, traders should limit leveraged positions and maintain a few shorts also.

News

* Tech Mahindra has acquired Lodestone, a leading digital engineering quality assurance provider for new age digital companies. The acquisition sets up Tech Mahindra as a leader in the digital engineering space by enhancing its capability to provide end-to-end quality assurance services across hardware, software, and data layers.

* Bharat Rasayan has issued commercial papers of Rs 50 cr value dated November 18, 2021, having maturity on February 16, 2022, which have been rated "CARE A1+" by a leading rating agency.

* NCC has received three new orders totaling to Rs 2,167 cr (exclusive of GST) so far in the month of November, 2021. All three orders pertain to building division and are received from a State Government agency and do not include any internal orders.

Derivative Ideas

BHARTIARTL FUT lost around 1% on 18th Nov. The Scrip is looking weak considering the Selling in Last 4-5 Sessions. Should Test the Support Zone at around 690 Levels.

Strategy:- SELL BHARTIARTL NOV FUT@718-720, SLOSS AT 731, TRGT 695.

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. @ Recommendation Price 605 Target 705 Duration 9-12 Months

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