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Nifty Outlook

Markets ended almost on a flat note amid volatility, in continuation to the prevailing consolidation phase. The benchmark initially opened on a firm note and inched higher in the first half however underperformance of the banking majors combined with profit taking in select index majors dragged the indices lower in the latter half. Consequently, the Nifty index ended lower by 0.2% at 15,722 levels. Amongst the sectors, banking, oil&gas and realty were the top losers whereas IT and consumer durables ended with gains.

Global cues and updates on the new variant of Coronavirus would continue to dictate the trend in near future. On the domestic front, participants will also be closely eyeing the auto sales and PMI data for cues. Meanwhile, we reiterate our advice to restrict naked leveraged positions and wait for clarity.

News

* Tech Mahindra announced partnership with TAC Security to enable next-generation enterprise security for customers globally. The partnership will leverage artificial intelligence and user-friendly analytics to help measure, prioritize, and mitigate vulnerabilities across the entire IT stack.

* Tata Motors on Wednesday said it has bagged an order for 15 hydrogen-based fuel cell buses from the Indian Oil Corporation Limited. +

* NBCC has bagged a project worth Rs 206 cr from Odisha Hydro Power Corporation Ltd. NBCC has been awarded the work order for engagement as Project Management Consultant for undertaking various civil works of Odisha Hydro Power Corporation.

Derivative Ideas

NAVINFLUOR FUTS added around 15% 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 NAVINFLUOR in cash as per below levels.

Strategy:- BUY NAVINFLUOR BETWEEN 3730-3740 STOPLOSS 3690 TARGET 3820.

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 122.6 TGT 147

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