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Nifty Outlook

Markets extended surge for the third consecutive session and gained over 2%. The benchmark started the day on a positive note despite mixed global cues and gradually inched higher as the day progressed. Healthy buying was witnessed across the board wherein metal and banking emerged as top gainers. Besides, the noticeable surge in the index major, Reliance, in the last hour further fuelled the rally.

Consequently, the Nifty ended with healthy gains of 2.2% near day’s high at 15,246 levels. The broader markets too ended in positive in the range of 1.3-1.5%. Participants are taking comfort from the domestic factors such as decent macro data, earnings upgrades and steady progress of vaccine drive.

Importantly, Nifty has reversed the last week’s decline and indications are pointing towards a further surge ahead. We remain cautiously optimistic on the markets and suggest focusing more on the selection of trades.

News

* Kalpataru Power Transmission announced that it has secured new orders from India, CIS and Latin America in the power transmission business worth Rs. 1,554cr.

* Rites announced that it has secured general consultancy work of Rs. 61cr from Haryana Rail Infrastructure and Development Corporation.

* Tata Power announced that TP Saurya, the wholly owned subsidiary, has signed a Power Purchase Agreement with Tata Steel to develop a 15 MW solar project at Jamshedpur, Jharkhand. The project is required to be commissioned within 6 months from the date of execution of the Power Purchase Agreement and valid for a period of 25 years.

Derivative Ideas

LICHSGFIN FUTS added around 12% 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 LICHSGFIN as per below levels.

Strategy:- BUY LICHSGFIN BETWEEN 455-459 STOPLOSS AT 440 TARGET 485.

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 819.45  TGT 1,087

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