The markets lost their important psychological support levels on Friday and plunged to new lows intraday on the back of sharp selling that started in the noon session. Banking stocks came under heavy selling pressure by market participants and offloading of positions was clearly visible in the latter part of the trading day. Likewise, auto shares also saw gyrations in their prices due to the Delhi government announcement that no new diesel vehicle would be registered further on. This is being done to counter the growing air pollution in the city. However, there was some lower level buying seen in the final hours of trading session pulling back the major indices from their intraday low. But , negative news was flying in thick and fast with the RBI Governor warning corporates of the explosive debt situation prevailing in the country and advising them to use it in moderation and preferably in the right places. The delay in the passage of the key GST bill has become a major deterrent for every market player to remain bullish in the stock market. The CNX Nifty ended in the red to close at 7,606 down 73 points after trading in the range of 7,575 and 7,703 during the volatile session. Stock markets are expected to be very choppy next week as the US Fed is set to announce an increase of 25 basis points in the federal funds rate after a regular monetary policy review scheduled on Wednesday evening the following week. Smart investors and traders can selectively buy their favourite blue chip stocks in the next couple of days before the Fed decision as there could be a relief rally round the corner. Uflex Ltd is India’s largest flexible packaging company with a presence in over 140 countries. Over the years, Uflex has emerged as one of the strongest global players in flexible packaging and plastic film manufacturing with state-of-the-art plants in India, Egypt, USA, Dubai, Poland and Mexico. With a cumulative installed capacity in excess of 43,5000 TPA, it serves as a one stop flexible packaging solution provider enjoying leadership position across the globe. The company is in the process of setting up a first-of-its-kind Aseptic packaging plant at Sanand in Gujarat with a capex of Rs 600 crore which will help in meeting the growing demand for cement packaging, tubes and film packaging. GST, when implemented, could be a game changer for the company as a large chunk of sales for the packaging industry is coming from the unorganised sector. It is expected that the large indirect tax differential between the unorganised and organised segment would narrow, thus providing a level playing field. The company registered a total revenue of Rs 1,535 crore for the quarter ended September 2015 and net profit of Rs 78 crore clocking a growth rate of 20%. Investors can buy the Uflex stock at the current market price of Rs 175 and further add on declines for a target price of Rs 250 over the next two quarters.
Rajiv Kapoor is a share broker, certified mutual fund expert and MDRT insurance agent.