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Nifty Outlook

Markets swung both ways before ending the session with sharp losses, in continuation to the prevailing corrective phase. The benchmark opened on a positive note but couldn’t hold for long and slipped in red. Though it tried to recoup losses in the middle, a sharp decline in the last hour pushed the index to a newer intraday low. The broader indices did comparatively well both Midcap and Smallcap restricted their losses to 0.3% and 0.6% respectively.

Amongst the sectors, except banking and realty, all the other indices ended lower wherein Telecom, IT and Auto were the top losers. The economic survey failed to trigger the rebound in the markets and now all eyes would be on the Union Budget scheduled on Monday i.e. Feb 1. We believe that the budget would focus on reviving growth and any disappointment on that front would lead to further correction in the markets. We reiterate our view to prefer hedged bets before the event unfolds and avoid jumping into a trade until the market stabilises.

News

* Dabur announced its numbers wherein revenue was up 16% YoY to Rs. 2,729 cr. Its EBITDA and net profit was up 16.5% and 23.7% YoY.

* Sun Pharma reported its numbers wherein revenue was up 8.4% YoY to Rs. 8,837 r. Its net profit stood at Rs. 1,853 cr as against Rs. 914 cr.

* Economic survey 2021 has pegged FY21 GDP growth to contract by 7.7% and expects real GDP growth of 11% for FY22.

Investment Pick - Nippon Life India Asset Management Ltd.

* Nippon Life AMC reported decent set of numbers in Q3FY21 which was largely in-line with our expectations. Its mutual fund QAAUM grew by 6.5% QoQ led by healthy growth in both equity as well as debt AUM which grew by 7.3% and 5.3% QoQ. Further, despite lower yields, PAT grew by 42.7% QoQ driven by higher other income and cost saving initiatives.

* Going forward, we remain positive on Nippon AMC as it plans to regain its lost market share through a series of measures. In the long run, its consistent increase in equity assets, industry leading retail assets and strong presence in B-30 cities augurs well for the growth prospects of the company. Recommend Hold.

Buy Nippon Life India Asset Management Ltd @ 9-12 Months CMP 322.15 TGT 348

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