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Nifty Outlook

Markets remained volatile in continuation to the trend and lost nearly half a percent. After the weak start, rebound in select banking, IT and auto majors gradually pulled the index higher however resumption of selling pressure in the final hours again trimmed all gains. Finally, the Nifty index ended lower by 0.3% to close at 17,231 levels. Amongst the sectors, IT and banking ended flat whereas oil & gas, metal and capital goods ended with losses. The underperformance continued from the broader front as both midcap and smallcap lost 0.6% and 1.9% respectively

Markets are in wait and watch mode in line with global peers and closely monitoring the Russia-Ukraine crisis for cues. Meanwhile, the volatile swings in the index combined with the selling in broader markets are making traders’ life difficult. We thus recommend limiting positions and keeping the existing hedged until the markets stabilise.

News

* RWE and Tata Power have agreed on a partnership to explore the potential for a joint development of offshore wind projects in India. A corresponding Memorandum of Understanding (MoU) has been signed between Tata Power Renewable Energy Limited, a 100 percent subsidiary of Tata Power, which is one of India's largest integrated power companies, and RWE Renewables GmbH, one of the world's leaders in offshore wind.

* Strides Pharma Science's step-down wholly owned subsidiary, Strides Pharma Global Pte. Limited, Singapore, has received approval for Amantadine Hydrochloride Softgel Capsules USP, 100 mg from the USFDA.

* Gujarat Mineral Development Corporation has received an amendment to its environment clearance from the Ministry of Environment and Forest to mine up to a depth of 135 meters from its earlier approved depth of 94 meters at the Tadkeshwar, Lignite Mines

Derivative Ideas

UPL FEB FUTS shed 2.94% and closed at 704.6 on 21st Feb. The stock has been in a downtrend for a while now. Now closing below 716 with fresh shorts added in UPL FUTS, it is poised to test 680 levels. We recommend to go Short in UPL FEB FUTS.

Strategy:- SELL UPL FEB FUTS@ 711-715 SLOSS AT 723 TRGT 685.

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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