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Nifty Outlook

Markets plunged sharply lower and lost 3%, pressurised by weak global cues. The benchmark opened gap-down and hovered in a range for most of the session however selling pressure resumed in the final hours. Consequently, the Nifty index settled around the day’s low to close at 16,842 levels. In line with the benchmark, most sectoral indices ended with a sharp cut and the broader indices too showed a similar trend..

As anticipated, global cues are now dictating the trend and the prevailing geopolitical tension between Russia and Ukraine combined with a steady uptick in crude is not going well with the participants. After weeks of consolidation, we feel bears are now in a more commanding position and likely to push the index further lower. Nifty has next crucial support around 16,680(200 EMA) and then 16400 levels. We reiterate our cautious view and suggest aligning positions according to the trend.

News

* Grasim Industries Q3FY22 standalone revenue jumped 56.5% YoY to Rs 5,785cr. Its net profit was up 46% YoY at Rs 522cr.

* Adani Wilmar Q3FY22 consolidated revenues grew 40.6% YoY to Rs 14,378.7cr. Its net profit jumped 66% YoY to Rs 211.4cr.

* Hikal revenue rose 11.1% YoY to Rs 514.5cr. Its Q3FY22 net profit was up 12.2% YoY to Rs 45.2cr.

Derivative Ideas

GRASIM FEB FUTS shed 4.1% and closed at 1640 on 14th Feb. The stock has seen a fresh breakdown on charts below 1700 levels. Trading below 1660 with new shorts added in its FUT , the counter is poised to test its support at 1600. We recommend to go Short in GRASIM FEB FUTS.

Strategy:- SELL GRASIM FEB FUTS @ 1652-1658, SLOSS AT 1675, TRGT 1610.

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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