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Nifty Outlook

The market continued its surge for the second consecutive session and gained nearly a percent. The benchmark opened the gap up, tracking upbeat global cues which further strengthened with strong buying in banking and financials majors. Finally, the Nifty closed at 16,259 levels, up by 0.8%. On the flip side, most sectoral indices ended in the red due to profit taking at the higher levels. The broader indices too remained under pressure and ended lower in the range of 1-1.2%.

Since the Nifty has almost tested the immediate target of 16,300, we may see a pause in the following session. However, the recent buoyancy in banking and financials would help the index to maintain the positive bias. At the same time, the profit taking in the other sectors and broader indices demands extra caution in the selection of stocks. We advise aligning positions accordingly.

News

* SBI posted Q1FY22 earnings, wherein its net interest income was up 3.7% YoY at Rs 27,638cr. The bank's net profit jumped by 55.3% to Rs 6,504cr versus Rs 4,189.3cr.

* Godrej Consumer Products Q1FY22 revenue was up 24.4% YoY at Rs 2,894.4cr. Its net profit rose 4.8% at Rs 413.6cr versus Rs 394.9cr YoY.

* Bosch Q1FY22 revenue was at Rs 2,443.5cr versus Rs 991.5cr YoY. Its net profit came in at Rs 260.3cr versus loss of Rs 121.5cr YoY.

Derivative Ideas 

NIFTY FUTS added around 5% 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 NIFTY 16250 CE as per below levels

Strategy:- Buy NIFTY 16250 CE@ 30-40 Stoploss at 10, Target 98

Investment Pick - CSB Bank Ltd.

Established in 1920, CSB Bank Ltd (known as The Catholic Syrian Bank) is one of the oldest private sector banks in India. It has a significant network in Kerala, Tamilnadu, Karnataka and Maharashtra. At present, 90% of the branches are in these four states and the remaining 10% is spread across other states in India. The bank operates mainly in four business areas namely SME banking, retail banking, wholesale banking and treasury operations.

We believe CSB bank is well placed as it has a strong gold loan book, prudent management team and steady financials with improved asset quality. Further, a well-planned strategy like betting on less risky businesses such as agriculture, food & service, etc. and avoiding risky unsecured loans augurs well for future growth. From a long term perspective, we are optimistic on the company’s growth prospects thus initiating a Buy on the stock with a target price of Rs 432.

Buy CSB Bank Ltd @9-12 Months CMP 342.15 TGT 432

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