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Nifty Outlook

Markets traded lackluster and ended marginally lower amid mixed cues. After the flat start, the benchmark inched gradually higher in the first half, thanks to the rebound in select heavyweights. However, it couldn’t sustain at higher levels for long and surrendered all the gains by the end. Consequently, the Nifty settled at 17,276; down by 0.2%. The broader indices continued their underperformance and ended lower in the range of 0.8-0.9%. On the sector front, all indices, barring financials, ended lower.

The last three days of the movement in the index indicate caution among the participants due to uncertainty around the Russia-Ukraine tension. We feel it will end soon and any favourable development over the weekend may result in a strong start next week. However, on the flip side, in case of a negative surprise, the reaction could be equally severe. Meanwhile, we recommend sticking to hedged positions and suggest preferring index majors over others. On the index front, Nifty needs a decisive close above 17,500 to regain strength while the 16,800-17,000 zone would remain the key support.

News

* Jubilant Ingrevia informed that the company has issued Commercial Papers of Rs. 150cr.

* KDDL’s material subsidiary ‘Ethos’, has entered into a contract with of Messika group to be the exclusive partner and reseller for Messika Jewellery in India.

* Aviation data for the month of January was reported wherein Air passenger traffic stood at 64.08 lakh passengers, down by 43% MoM, and down 17.1% YoY.

Derivative Ideas

ICICIPRULI gained 1.41% and closed at 525.2 on 18th Feb. The stock after taking the support at 500 levels witnessed 5% up move with good upside volume. Now closing above 521, the counter is poised to test its resistance at 545 levels. We recommend to go Long in ICICIPRULI.

Strategy:- BUY ICICIPRULI @ 516-521, SLOSS AT 505, TRGT 545.

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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