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Nifty Outlook

Markets made a firm start and gained nearly a percent, tracking upbeat global cues. After the gap up opening, the index inched further higher in the initial hours followed by range bound move. Finally, the Nifty index ended with healthy gains of 0.9% at 17,691 levels. Among the sectors, buoyancy in the metal, realty and healthcare kept the participants busy. The broader indices too posted decent gains.

Global cues will continue to dictate the trend for the time being and then focus would shift to earnings and outcome of monetary policy review meet. We feel it’s prudent to limit leveraged positions and focus on themes that are doing well. On the global front, movement in US bond yields and currency would be actively tracked.

News

* Adani Ports announced that during September 2021, its port handled cargo volume of 23.08 MMT (includes 2.57 MMT for Gangavaram Port), which is a growth of 24% YoY.

* Max Healthcare announced that it is further fortifying its presence and expanding its bed capacity in NCR region by addition of two hospitals of ~ 500 beds each in Gurugram.

* Zydus Cadila has secured a nod from India's drug regulator to conduct the phase 3 trials of a two-dose regimen of its COVID-19 vaccine ZyCoV-D.

Derivative Ideas 

NIFTY FUT has added around 4% in open interest as fresh long build up was seen in it. Current chart pattern also indicates further up move in its price. We suggest buying in NIFTY 7th OCT 17700 CE as per below levels.

Strategy:- BUY NIFTY 7th OCT 17700 CE @74-78, sloss at 54, trgt 110.

Investment Pick - Orient Electric Ltd.Orient Electric Ltd. (OEL) is part of the diversified USD 2.4 billion Indian conglomerates CK Birla group. OEL is a 60-year-old brand in fans and has established itself as a one-stop brand for lifestyle electrical solutions which include fans, lighting, home appliances and switch gears. Orient Electric has manufacturing facilities in Kolkata, Faridabad and Noida. The company enjoys a marketing presence across 35 countries. In the domestic market, it has a robust sales/ distribution network and service network with pan-India coverage.

After a muted show in FY21 due to the pandemic, we expect OEL’s revenue to grow at 17.5% CAGR over FY21-24E led by a recovery in both ECD and lighting & switchgear segment. On the margins front, higher operational efficiencies coupled with the focus on premiumization would aid margin improvement for OEL. We estimate OEL’s Revenue/EBITDA/PAT to grow at 17.5%/18.6%/24.8% over FY21-24E. We recommend a Buy on the stock with a target price of Rs. 439.

Buy - Orient Electric Ltd @ 9-12 Months CMP 327.9 TGT 439

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