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Published on 27/11/2020 11:10:56 AM | Source: Religare Broking Ltd

Markets made a smart comeback and posted gains of over a percent - Religare Broking

Posted in Market Outlook| #Market Outlook #Religare Broking Ltd

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Nifty Outlook

Markets made a smart comeback and posted gains of over a percent. Initially, the bias was on the negative side, in line with the previous session’s fall but the trend reversed in the latter half, thanks to healthy buying in metals, banking and financial pack. Consequently, the Nifty settled near 12,987 levels. The broader markets too ended in a positive range of 0.7-0.9%. Barring oil & gas, all the sectoral indices ended in the green.

This rebound indicates that bulls are in control however the possibility of consolidation is still high and it would be healthy for the markets. In the near term, markets would continue to take cues from their global peers. On the domestic front, India’s GDP data outcome schedule on 27th November will be on the radar. We reiterate our view to focus more on the selection of stocks during this consolidation phase and continue with the “buy on dips” approach.

 

 

News

* DHFL announced its Q2FY21 results wherein its revenue was up 4.7% YoY at Rs 2,204.8 cr. The company’s net loss narrowed down to Rs 2,122.7 cr as against loss of Rs 6,640.2 cr YoY

* Meghmani Organics announced it has commenced two new agrochemicals plants and is planning to set up the multipurpose plant at Dahej at the cost of Rs 310 cr.

* Ajanta Pharma announced the buyback of shares upto 7.35 lakh equity shares at a price of Rs 1850/share. The offer will open on 3rd December and close on 16th December, 2020.

 

Religare Super Idea**

 

Derivative Ideas

L&TFH DEC FUT added around 15% in open interest addition as LONG buildup was seen in it in till closing time. Current chart pattern also indicates further up move in its price. We suggest buying L&TFH as per below levels.

Strategy:- BUY L&TFH BETWEEN 76.50-77.50, STOPLOSS AT 73, TARGET 84.

 

Investment Pick - Bata India Ltd.

* Bata India reported better number sequentially but remain muted as compared to Q2FY20 due to pandemic. Its revenue stood at Rs 368 cr which grew by 172% QoQ. Its EBITDA reported profit of Rs 18 cr as compared to EBITDA loss of Rs 86 cr QoQ. On bottom-line its loss narrowed down to Rs 44 cr as compared to loss of Rs 101 cr in Q1FY21. Going forward, management expects improvement but at a very gradual pace which means FY22E onwards we would see decent growth. Maintain Buy.

* Over the years Bata has been a consistent performer, however, Q1FY21 was severely impacted due to lockdown led by Covid-19. Further in Q2FY21 with opening of economy sales is picking up at gradual pace but as the situation is still uncertain we expect FY21 growth to remain muted.

* Nonetheless, we expect the company to regain in FY22E as the situation stabilises and demand would pick-up on the back of better product mix, increasing presence in e-commerce space and growing distribution network by expanding in semi-rural market and aggressively promoting brands through advertisements. Besides, it has healthy balance sheet and strong cash flows which is an added advantage and this would aid to sustain in tough times. Hence, we have maintained a Buy on the stock with target price of Rs. 1,669.

Buy Bata India Ltd @ 9-12 Months CMP 1,525.4 TGT 1,669

 

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