Weekly Fundamental Insights With Rini Mehta | 9th May 2022

Join Rini Mehta in getting a fundamental perspective for the trading week.Weekly outlook: United Breweries Among Top Picks, FPI Flows Likely to Remain VolatileHighlights of 09 May ’22 Fundamental weekly podcast- Central bank actions kept global and domestic markets under pressure last week. The Sensex and Nifty saw profit booking and were down by around 4%.- The RBI raised the repo rate by 40 bps to 4.4% and increased the cash reserve ratio (CRR) by 50 bps to 4.5%.- The Federal Reserve raised the benchmark interest rate by half a percentage point - its biggest hike in two decades.- Amid rising interest rates, elevated crude oil prices, and high inflation, the markets will likely remain volatile and further stock-specific action can be expected based on Q4 results.- FIIs flows continue to remain negative in the month of May to the tune of around Rs 12,733 crore so far. We believe FIIs flow in India will remain volatile in the short term on the back of multiple headwinds like Inflation, monetary tightening, elevated crude oil prices, geopolitical issues, etc.- Weekly pick: United Breweries Ltd- We expect UBL to deliver strong volume recovery in FY2023E and full recovery in margins as and when raw material prices eventually ease.- Other picks: Varun Beverages Ltd - The company is set to exceed our expectations on the back of strong volume growth aided by (1) distribution-led share gains in South/West, (2) stellar growth of Sting, and (3) an unusually hot summer. We revise fair value to Rs 1,275 (from Rs 1,100) and reiterate BUY.