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Nifty Outlook

Markets traded firm on the last trading day of 2021 and gained nearly a percent. The tone was upbeat from the beginning however profit taking in the latter half marginally trimmed the gains. Healthy buying in heavyweights from metal, auto and banking space supported the rally. The broader markets too ended higher in the range of 1.5-1.6%. Consequently, the Nifty closed at 17354 levels; up by 0.9%.

Though we’re seeing steady recovery so far, rising COVID cases and precautionary restrictions imposed by a few key states could dent the sentiment ahead. On the other hand, the participation of the banking index is certainly encouraging which may help Nifty to test the 17,500. We reiterate our view to focus on themes/sectors which are trading in sync with the benchmark and align the positions accordingly.

News

* Zydus Cadila’s US subsidiary Zydus Pharmaceuticals (USA) Inc. has received tentative approval from the USFDA to market Pimavanserin Capsules in the strength of 34 mg. The drug will be manufactured at the group’s formulation manufacturing facility at SEZ Ahmedabad.

* Tech Mahindra approved the proposal to acquire 100% equity shares in Allyis India Pvt. Ltd. and the company’s wholly owned subsidiary viz., Tech Mahindra (Americas) Inc. approved the proposal to acquire 100% equity shares in Green Investments LLC, holding company for Allyis Group.

* Time Technoplast has received a prestigious single order from a renowned public sector gas distribution company for supply of Cascades with Carbon Fiber Reinforced Type-V Composite Cylinder. This order is in addition to earlier order booking of Rs 150cr

Derivative Ideas

BHARTIARTL gained 0.66% and closed at 683.8 on 31st Dec. BHARTIARTL after testing its swing support at 640-645 levels is now 6-7% up. We are seeing a noticeable traction in the scrip. Closing above 690 will sharpen its upmove till 730 levels. We recommend to go Long in BHARTIARTL.

Strategy:- BUY BHARTIARTL @ 677-680, SLOSS AT 665, TRGT 705.

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 :-  3.440.90 Recommendation Price 3,335 Target 3,867 Duration 9-12 Months.

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