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Nifty Outlook

Markets traded dull and ended marginally lower citing mixed global cues. After the initial dip, the benchmark oscillated in a narrow range however mixed moves on the sectoral front kept the participants busy. Among the sectors, financials was the top loser followed by consumer durable however buying in IT, energy, pharma and metals capped the downside. The broader indices outperformed as both Midcap and Smallcap ended in the green.

All eyes are on the outcome of the NATO summit as it could provide the direction to the lingering Russia-Ukraine tension. Indications are in the favour of further consolidation in the index however the prevailing underperformance from the banking pack is denting sentiment. Among the sectors, IT, metal and pharma look strong to us so participants should align their positions accordingly.

News

* Shankara Building Products has approved the issue of preferential share warrants worth Rs 105 cr to APL Apollo Mart (a wholly-owned subsidiary of APL Apollo Tubes Limited).

* The board of directors of Hindustan Construction Company at its meeting held on March 23, 2022, approved the re-appointment of Mr. Arjun Dhawan, whose term is expiring on March 31, 2022, as whole-time Director of the company for a period of 5 years w.e.f. April 1, 2022, subject to approval of the Members in the next General Meeting.

* The board of directors of L&T at its meeting held today approved long term borrowings upto Rs 10,000 cr, including refinancing, through external commercial borrowings, term loans, non-convertible debentures or any other instrument as may be appropriate.

Derivative Ideas

TATAPOWER gained 2.22% and closed at 239.5 on 24th Mar. Broadly the counter has been trading in a range of 205-255. After base formation at 228 levels, the stock has given a breakout above 235 levels and is poised to test the upper range of the channel i. e 255. We recommend to go Long in TATAPOWER.

Strategy:- BUY TATAPOWER @ 236-238, SLOSS AT 230, TRGT 251.

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+.

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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