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Nifty Outlook

Markets took a breather after the recent surge and settled with a cut of over a percent. Weak global cues triggered a gap-down start, followed by volatile swings till the end. Consequently, the Nifty ended lower, down by 1.1% at 15,081 levels. On the flip side, resilience on the broader front kept the participants busy. Excessive volatility in the global markets, mainly due to the rise in the bond yields, impacting sentiment on the domestic front too and we don’t expect any relief from that front anytime soon. We reiterate our cautiously optimistic view on markets and suggest preferring hedged positions instead of outrights.

News

* Alembic Pharmaceuticals announced that its joint venture Aleor Dermaceuticals has received final approval from the USFDA for its ANDA, Testosterone Gel, 1.62% (20.25 mg/1.25 gm actuation.

* RailTel Corporation of India has received an Advance Purchase Order amounting to Rs. 25.46cr per annum (plus GST) from BSNL for commissioning of the point-to-point links.

* Finolex Cables introduced its new range of decorative fans and lighting products to strengthen its FMEG portfolio. These exclusive fans have been introduced to time the approaching summer season.

Derivative Ideas

TRENT FUTS added around 27% in open interest addition as LONG buildup was seen in it till closing time. Current chart pattern also indicates further up move in its price. We suggest buying TRENT as per below levels.

Strategy:- BUY TRENT BETWEEN 917-922 STOPLOSS AT 895 TARGET 960.

Investment Pick - Mahindra & Mahindra Ltd.

Established in 1945, Mahindra and Mahindra (M&M) is the flagship company of the Mahindra Group. It is one of the leading conglomerates which operate in various segments such as Automotive (PVs, CVs, 2W and 3W), Farm Equipment, Hospitality, Information Technology, Financial Services, Real Estate, Retail and Logistics. M&M is the market leader in Tractors and Utility Vehicles (UV) segment which is a part of its core business (Farm equipment and Auto).

Factoring the strong performance in Q3FY21, we have raised our estimates for M&M and expect revenue and PAT to grow at 12.9% and 22.5% CAGR over FY20-23E. We value the core business at 16x FY23E EPS of Rs. 51.5 and arrive at a SOTP based target price of Rs. 1,087.

Buy - Mahindra & Mahindra Ltd. @ 9-12 Months CMP 845.25  TGT 1,087

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