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Nifty Outlook

Markets regained momentum and settled with gains of nearly one and a half percent, tracking firm global cues. After the gap-up start, the benchmark gradually inched higher as the day progressed wherein the sectors, barring IT, contributed to the move. Finally, the Nifty closed around the day’s high at 16,931 levels. The broader market indices, midcap and small-cap, too ended with healthy gains in the range of 1.5 -1.9%.

The surge in the index was led by banking and financials pack today, which look upbeat to maintain the bias. Going ahead, the upcoming macroeconomic data i.e. GDP numbers and auto sales numbers will be in focus for further cues on economic recovery. We expect the prevailing uptrend to continue and suggest keeping the focus on the selection of stocks.

News

* Granules India announced that it has received marketing approval from Health Canada for Acetaminophen Extended-Release Tablets OTC, 650mg for the treatment of Arthritis Pain.

* Anupam Rasayan announced that it has received and signed Letter of Intent (LOI) amounting Rs 135cr with a Japanese Multinational Chemical company for supplying a life sciences related speciality chemical product. The company will enter into a long-term contract for next four years to supply this life science related speciality chemical product.

* Ramkrishna Forgings, one of the leading suppliers of rolled, forged and machined products has bagged orders for its warm forging business worth Rs 120Mn per annum from a major global axle manufacturer located in India.

Derivative Ideas 

NAM-INDIA FUTS added around 12% in open interest in as LONG buildup was seen in it . Current chart pattern also indicates further up move in its price. We suggest buying in NAM-INDIA as per below levels.

Strategy:- BUY NAM-INDIA BETWEEN 414-417 SL 402 TARGET 450.

Investment Pick - Nippon Life India Asset Management Ltd.

Incorporated in 1995, Nippon Life Asset Management Company (NAM) is one of the leading AMCs in India with a total AUM of ~Rs. 3.79 tn. It is involved in managing the mutual fund (AUM of Rs. 2,442 bn) and managed accounts including Portfolio Management Services (PMS), Alternate Investment Funds (AIF), Pension Funds and Offshore Funds.

We continue to remain constructive on the Indian mutual fund industry given its low penetration level as compared to major economies (11% AUM to GDP ratio v/s world average of 62%). Further, NAM’s consistent increase in equity assets, industry-leading retail assets, focus on growing SIP book and strong presence in B-30 cities augurs well for the growth prospects of the company. We recommend a Buy on the stock with a target price of Rs. 492.

Buy Nippon Life India Asset Management Ltd @ 9-12 Months CMP 420.65 TGT 492

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