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Nifty Outlook

Markets took a breather after the recent rebound and ended marginally lower in a lackluster session. After the initial uptick, the benchmark drifted gradually lower and traded range bound thereafter. However, movement on the broader market front kept the traders busy till the end. The broader indices outperformed the benchmark and gained in the range of 0.3%-0.7%. Among the sectors, healthcare, auto and telecom ended with gains whereas metal and power ended with losses.

The scheduled monthly expiry of December month derivatives contracts would keep the volatility high. The banking pack is still struggling and its performance would be critical for the next directional move. In absence of any event, updates on the COVID cases would remain on the participants’ radar. Keeping in mind the scenario, we suggest continuing with a stock-specific trading approach.

News

* BASF has reached an agreement to divest its manufacturing site in Quincy, Florida and the associated attapulgite business for a purchase price of USD 60 million to Clariant. The transaction is expected to close in 2022.

* Bajaj Auto is going to invest Rs 300 crore to build capacity for 5 lakh EVs per annum. It has announced a new electric vehicle manufacturing unit at Akurdi.

* Amara Raja Batteries announced plans to invest in InoBat Auto, a European technology developer and manufacturer of premium innovative batteries for E-mobility.

Derivative Ideas

LUPIN gained 1.42% and closed at 929.6 on 29th Dec. We’re seeing a Positive trend within the pharma pack and Lupin is trading in sync with the others. Now Fresh breakout is being seen in LUPIN. The Scrip is poised to test its Resistance at 960-970 Levels. We recommend to go Long in LUPIN.

Strategy:- BUY LUPIN @ 921-925, SLOSS AT 907, TRGT 955.

Investment Pick - Metropolis HealthcareLtd.

Incorporated in 1980, Metropolis Healthcare is one of the leading diagnostic players in India. Metropolis has spread its footprint across 19 states & 210 cities. It has a dominant share in the western and southern regions. It offers a comprehensive range of 4,000+ clinical laboratory tests. It also offers analytical and supports services to clinical research organisations for their clinical research projects.

The diagnostic industry is expected to register strong growth driven by multiple growth drivers. Within this space, we like Metropolis given its pan India presence, asset-light business model, strong brand equity, and wide range of tests. Further, a strong focus on increasing its B2C business and specialized testing would aid margin improvement. We thus raise our estimate for Metropolis and expect Revenue/ EBITDA/PAT to grow at 19.0%/18.9%/20.9% over FY21-24E. We recommend a Buy rating on the stock with a target price of Rs. 3,867.

Buy - Metropolis Healthcare Ltd. @ CMP :-  3474.7 Recommendation Price 3,335 Target 3,867 Duration 9-12 Months.

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