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Nifty Outlook

Markets ended the week with a sharp cut, reflecting the feeble global sentiment. After the sharp reaction in early trade, the benchmark oscillated in the broader range to finally settle around the day’s low. All sectors, barring IT, ended lower wherein auto, metals and realty were among the top losers. The broader indices too were not spared and ended lower in the range of 1.8-2.2%.

Markets are expected to remain tricky in the short term so caution is warranted. Over the weekend, the main focus will be on news related to the Russia-Ukraine war as further escalation would result in continued pressure in the coming week. Moreover, rising crude oil is a headache for our economy and related sectors are already under tremendous pressure. We feel it’s time to remain selective and look for pockets that are fundamentally sound and likely to rebound quickly with stability in markets.

News

* Premier Explosives announced that it has received two orders from Defence Research and Development Organisation worth Rs 17.7cr.

* C.E. Info Systems announced that the company has acquired 75.98% stake in Gtropy Systems Pvt. Ltd.

* DJ Mediaprint & Logistics has secured orders for Printing & Dispatch services from JK Cement.

Derivative Ideas

BATAINDIA shed 3.04% and closed at 1722.5 on 4th Mar. The counter witnessed a breakdown of the neckline of H&S pattern. Trading below 1780, BATAINDIA is poised to test its support at 1630 levels. We recommend to go Short in BATAINDIA with the PE option.

Strategy:- BUY BATAINDIA MAR 1700 PE @ 48-52, SLOSS AT 38, TRGT 72 .

Religare New Year Pick - INOX Leisure Ltd.

Incorporated in 1999 and part of the INOX Group, INOX Leisure Ltd. (INOX) is the second-largest multiplex chain operator in India. The company’s screen additions have grown multi-fold over the past 10 years, from 91 screens in FY09 to 667 screens currently (Q3FY22 end) having a wide presence in ~70 cities with a seating capacity of 1,50,000+.

We like INOX in this space given its focus on enhancing the consumer experience, continued emphasis on expansion, effort on increasing spending per head, and increasing footfalls. We recommend a Buy on the stock and arrive at a target price of Rs. 495 (target EV/EBITDA multiple of 13x). Some of the key risks to our estimates include a) resurgence in COVID cases and b) slower than expected revival in footfalls.

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