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Nifty Outlook

Markets ended flat in a volatile trading session, in line with the prevailing consolidation phase. The benchmark started the day on a firm note led by positive global cues however profit-taking at higher levels, especially in the banking stocks, trimmed gains as the session progressed. Consequently, the Nifty settled at 14,956; up by 0.12%.

The broader indices managed to outperform the benchmark as both Midcap and Smallcap ended higher by 0.3% and 0.6%. Amongst the sectors, a mixed trend was witnessed wherein Telecom, Auto and Realty ended with losses whereas IT, Oil & Gas and Metals ended in the green. Markets are currently dancing to the global tunes so a breakout/breakdown in the world markets might trigger the next directional move here.

Meanwhile, participants should restrict naked leveraged positions and focus more on the selection of stocks. Crude oil prices and bond yields would continue to remain on their radar for cues. On the domestic front, COVID-19 cases, macro data like IIP, CPI would also be actively tracked.

News

* Natco Pharma announced that its marketing partner, Breckenridge Pharmaceutical Inc, has received final approval for its Abbreviated New Drug Application for Everolimus Tablets (generic for Afinitor) from the USFDA.

* Aarti Speciality Chemicals, a wholly-owned subsidiary of Aarti Drugs, stands out to be one of the beneficiaries of the Government of India’s recently approved Production Linked Incentive (PLI) for the pharmaceutical sector.

* Vivimed Labs announced that it has received approval for 2 products from Uzbekistan Government for its PICS & Health Canada approved site, both facilities are situated at Hyderabad.

Derivative Ideas

UPL FUTS added around 5% 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 UPL as per below levels.

Strategy:- BUY UPL BETWEEN 622-625 STOPLOSS AT 608 TARGET 652.

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.

Buy Mahindra & Mahindra Ltd @ 9-12 Months CMP 840.4 TGT 1,087

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