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Nifty Outlook

Markets started the holiday shortened week with high volatility. The benchmark witnessed a gap down opening amid muted Asian cues and tension between Russia-Ukraine. However, as the day progressed indices started recovering gradually as news of negotiation between Russia and Ukraine led to the positive sentiments. Consequently, the Nifty ended with strong gains of 0.8% at 16,794 levels. The broader markets ended higher in the range of 0.9 -1.1%. Except for finance and auto, all the sectoral indices ended in the green.

Markets will first react to GDP data outcome in early trade on Wednesday. At this point, participants are keeping a close watch on updates related to Russia & Ukraine. Any fruitful negotiation outcome will boost sentiments however on the flip side any dissatisfaction to either country, may once again impact markets worldwide. We would remain cautious and wait for some meaningful sign of de-escalation. In the meantime, traders should maintain hedged positions.

News

* Unichem Laboratories announced that it has received ANDA approval from the USFDA for its Divalproex Sodium Extended-Release Tablets USP, 250 mg and 500 mg used for treatment of acute manic or mixed episodes associated with bipolar disorder, as monotherapy and adjunctive therapy and prophylaxis of migraine headaches.

* The Ministry of Defence, Government of India, and BEL signed a contract for the retro-modification of Commander Sight of Battle Tanks-T90 for the Indian Army. The total value of the contract is Rs. 1,075cr.

* Mahindra Logistics announced its acquisition of majority stake in ZipZap Logistics Pvt. Ltd., a last-mile logistics service provider operating under its brand ‘Whizzard’.

Derivative Ideas

PVR gained 2.45% and closed at 1635.75 on 28th Feb. The stock has shown good up move after taking the support at 1500-1520 zone. Now fresh breakout is seen in the counter with Fresh Longs added in its Fut. Holding 1570, the counter is poised to test its resistance at 1700 levels. We recommend to go Long in PVR.

Strategy:- BUY PVR @ 1610-1620, SLOSS AT 1570, TRGT 1690.

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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