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Nifty Outlook

Markets extended yesterday’s rebound and gained nearly a percent on the F&O expiry day. Upbeat global cues combined with strong traction in banking majors triggered a strong start. However, profit-taking at the higher levels capped upside as the day progressed. Finally, the Nifty index ended with healthy gains of 0.8% to close at 15,097 levels. Amongst the sectors, except FMCG and Capital Goods, all the other indices ended with gains wherein Oil & Gas, Metals and Realty were the top gainers. The broader markets continued to witness healthy buying interest as both midcap and smallcap ended higher by 1.1% and 1.5%.

Global cues and upcoming macroeconomic data i.e. GDP numbers will dictate the trend from hereon. Mostly sectoral indices trading in the tandem with benchmark however we feel banking has the potential to help the index inch further higher. Amid all, it’s prudent to wait for further clarity and limit naked leveraged positions.

News

* L&T Technology announced it has been selected by Airbus to provide technology and digital engineering solutions for Airbus’ Skywise platform as part of the ‘Skywise Partner Programme’.

* Bharti Airtel announced that it had raised USD 1.25 billion through debt instruments.

* Ashok Leyland has entered into a Share Purchase Agreement with Nissan International Holding BV to acquire 58,500,000 shares for a total consideration of Rs.70,20,00,000/- constituting 38% in the paid-up share capital of Hinduja Tech Limited.

Derivative Ideas

CIPLA MARCH FUTS added around 24% in open interest addition as LONG buildup was seen in it till closing time. Current chart pattern also indicates further up move in its price. We suggest buying CIPLA as per below levels.

Strategy:- BUY CIPLA BETWEEN 800-802 STOPLOSS AT 785 TARGET 830.

Investment Pick - Mahindra & Mahindra Ltd.

Established in 1945, Mahindra and Mahindra (M&M) is the flagship company of the Mahindra Group. It is one of the leading conglomerates which operate in various segments such as Automotive (PVs, CVs, 2W and 3W), Farm Equipment, Hospitality, Information Technology, Financial Services, Real Estate, Retail and Logistics. M&M is the market leader in Tractors and Utility Vehicles (UV) segment which is a part of its core business (Farm equipment and Auto). Factoring the strong performance in Q3FY21, we have raised our estimates for M&M and expect revenue and PAT to grow at 12.9% and 22.5% CAGR over FY20-23E. We value the core business at 16x FY23E EPS of Rs. 51.5 and arrive at a SOTP based target price of Rs. 1,087.Established in 1945, Mahindra and Mahindra (M&M) is the flagship company of the Mahindra Group. It is one of the leading conglomerates which operate in various segments such as Automotive (PVs, CVs, 2W and 3W), Farm Equipment, Hospitality, Information Technology, Financial Services, Real Estate, Retail and Logistics. M&M is the market leader in Tractors and Utility Vehicles (UV) segment which is a part of its core business (Farm equipment and Auto). Factoring the strong performance in Q3FY21, we have raised our estimates for M&M and expect revenue and PAT to grow at 12.9% and 22.5% CAGR over FY20-23E. We value the core business at 16x FY23E EPS of Rs. 51.5 and arrive at a SOTP based target price of Rs. 1,087.

Buy - Mahindra & Mahindra Ltd. @ 9-12 Months CMP 859  TGT 1,087

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