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Nifty Outlook

Markets recovered swiftly on Friday and gained over 2.5%, following supportive global cues. After the sharp sell-off in the previous session, the benchmark opened strongly with an upside gap and hovered range-bound thereafter. Finally, the Nifty index settled at 16,654 levels. In line with the index, most sectors witnessed a rebound wherein metal, realty and banking were the top gainers. The broader markets too participated in the recovery and ended with gains of 4% each.

Participants shouldn’t read much into a single-day rebound and wait for further clarity. In case of a further rebound, 16,850-17,000 zone would act as a critical hurdle in Nifty. The looming uncertainty over the geopolitical tension combined with the rising crude would keep the participants on the edge in the following sessions. We thus recommend staying light and keeping a selective approach until the situation stabilises.

News

* PNC Infratech has been declared the L1 (lowest) bidder for a NHAI Project of 32.98 km long, four laning of Mathura Bypass to Gaju Village section of NH 530B in the State of Uttar Pradesh, to be executed on Hybrid Annuity Mode for a Bid Project Cost of Rs 885 cr.

* Arihant Superstructures (ASL) Limited has recorded the highest sales in a particular month in its history of 400 Flat sales in February month till date.

* NHPC has signed a Facility Agreement with HDFC Bank, to securitise the return on equity of Chamera-I power station with 540 MW capacity for a tenor of 10 years.

Derivative Ideas

NATIONALUM gained 4.69% and closed at 117.3 on 25th Feb. The stock after taking the trend line support at 108-110 levels surged 5% after that. Now closing above 115, the counter is poised to test its resistance at 125 levels. We recommend to go Long in NATIONALUM.

Strategy:- BUY NATIONALUM @ 114-116, SLOSS AT 111, TRGT 123.

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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