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Nifty Outlook

Market inched marginally lower in continuation to Monday’s fall, in absence of any fresh trigger. Initially, the benchmark opened on a flat note however weak global cues dragged the index lower as the day progressed. Finally, the Nifty index ended lower by 0.4% at 15,750 levels. The broader markets too witnessed selling pressure as both midcap and smallcap ended lower by 0.4% and 0.1% respectively. On the sector front, a mixed trend was witnessed as auto, banking and metals ended with losses whereas healthcare and FMCG ended with gains.

The rise in cases of a new COVID variant has started weighing on the sentiment globally and it may cascade to our markets too. Having said that, the bias is still positive however the participation is now restricted to a handful of the index majors. We thus suggest limiting naked leveraged positions in the current scenario and waiting for further clarity. On the benchmark front, Nifty has immediate support at 15,650 and the banking index may find the cushion within the 34500-34800 zone.

News

* Indian Railway Finance Corporation has posted net profit of Rs 1,482.5 cr in the Q4FY21 as against Rs 654.6 cr and revenue was up 39% at Rs 4,455 cr against Rs 3,205 cr.

* Subros revenue was up 43.9% YoY to Rs. 660 cr. It has posted a jump in net profit by 57% to Rs. 26 cr.

* National Peroxide consolidated revenue was up 35.1% YoY to Rs. 64 cr. It reported a net loss of Rs. 8.4 cr as against profit of Rs. 3 cr.

Derivative Ideas

BHARATFORG FUTS added around 10% 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 BHARATFORG in cash as per below levels.

Strategy:- BUY BHARATFORG BETWEEN 740-742 STOPLOSS 725 TARGET 770

Investment Pick - Ashok Leyland Ltd.

Ashok Leyland Q4FY21 numbers were broadly in line with our estimates. Its net sales grew by 82.4% YoY, on the back of 73.1% YoY increase in volumes. The company returned to profitability in Q4FY21 after four consecutive quarters of reporting net loss. Despite higher commodity cost inflation, higher operating leverage led to 286bps improvement in operating margins.

The second wave has impacted volume recovery for the industry and ALL. However, we expect healthy recovery for the CV industry in H2FY22 led by recovery in the rural economy and strong focus of the government on infrastructure. ALL being a pure play CV player would benefit from recovery in the CV cycle. Maintain Buy.

Buy - Ashok Leyland Ltd. @ 9-12 Months CMP 123.55 TGT 147

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