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Nifty Outlook

In a highly volatile session, markets ended with gains of nearly half a percent. After a flat opening, the benchmark traded volatile in the first half however healthy buying in metals, realty and banking stocks in second half aided markets to inch upwards. Consequently, the Nifty ended higher by 0.4% at 15,880 levels. The broader markets, midcap and smallcap, mood remained buoyant as it too ended in a positive range of 0.6-0.7%. On the sector front, the majority of the indices ended with decent gains, except for auto, energy and media.

In the near term, Q1FY22 earning is likely to provide some direction to the markets, in absence of any major triggers. So, we remain cautiously optimistic and believe any correction at this juncture should be considered healthy as investors will get the opportunity to invest in quality counters on dips. Meanwhile, investors will keep a close watch on global cues.

News

* Matrimony.com, announced that it has signed definitive agreements to acquire a 100% stake in Boatman Tech Pvt Ltd., promoters of ShaadiSaga.com (a Delhi-based fast-growing online wedding services company).The transaction is subject to customary closing conditions and regulatory approvals.

* Induslnd Bank announced that it has partnered with 'TP Central Odisha Distribution Ltd, a joint venture between Tata Power and the government of Odisha, to introduce a fully digital network for facilitating electricity bill payments across 300 semi-urban and rural regions in the state.

* Jindal Steel and Power informed that Care Ratings, has upgraded its rating from CARE A(-) with “Stable” outlook to CARE A(+) with “Stable” outlook on the long term bank facilities and from ‘CARE A2+” to “CARE A1+” for short term bank facilities.

Derivative Ideas

BHEL FUTS added around 14% in open interest as LONG buildup was seen in it. Current chart pattern also indicates further up move in its price. We suggest buying in BHEL in cash as per below levels.

Strategy:- BUY BHEL BETWEEN 66.70-67.10 STOPLOSS 65.70 TARGET 69.

Investment Pick - Finolex Industries Ltd.

Finolex Industries (FIL) Q4FY21 results were above our estimates. Revenue grew by 62.5% YoY to Rs 1,249cr largely driven by better volumes from resin business and realization from both businesses. Resin segment posted growth of 112% YoY to Rs 920.2cr while the company’s pipes and fitting segment grew by 43% YoY to Rs 901.7cr. EBITDA stood at Rs 410.1cr, up by 296% YoY while its margins witnessed strong improvement of 1936bps to 32.8%. Its net profit grew by 410% YoY to Rs 298.8cr with margin expansion of 1629bps.

FIL is well placed in the plastic pipe segment with a strong presence in agri pipes and manufacturing of resin. Going ahead, it has plans to grow in the non-agri segment, expand its manufacturing of PVC resin, increase distribution network and change product mix which will aid in earning better revenues as well as profits. Besides it has strong brand recall value, healthy balance and decent cash flow which bode well for the future growth of the company. So, we maintain a Buy rating on the stock with a target price of Rs 222.

Buy - Finolex Industries Ltd. @ 9-12 Months CMP 178.5 TGT 222

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