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Nifty Outlook

Markets traded lackluster in a narrow range and finally ended marginally lower. Initially, the benchmark opened marginally higher however lack of follow-up buying capped upside. It hovered in a narrow band for most of the session which finally ended with a breakdown. Consequently, the Nifty index closed at 17,063.25 levels; down by 0.2%. Meanwhile, noticeable action on the broader front kept the participants busy. Mostly sectoral indices, barring realty, ended flat to marginally lower in line with the benchmark.

Markets are gradually drifting lower amid excessive intraday volatility, mirroring the global markets. Meanwhile, a mixed trend on the sectoral front is further adding to the participants’ worries. In such a scenario, it’s prudent to restrict positions and wait for clarity over the next directional move.

News

* Lupin announced that Dr. Fabrice Egros to assume corporate development responsibilities as President, Corporate Development & Growth Markets. He will lead the development and execution of the company’s inorganic growth strategy, including mergers and acquisitions, business development, in-licensing arrangements, and related matters.

* TVS Motor announced that its exports in two wheeler segment clocked sales of one million (10 lakh) units, marking a significant milestone in the current financial year for the first time.

* PNC Infratech Limited has been declared the L1 (lowest) bidder in three new Hybrid Annuity Modelled National Highway Projects of NHAI for an aggregate bid project cost of Rs 4384 cr

Derivative Ideas

IRCTC gained 3.13% and closed at 814.35 on 23rd Feb. The stock has taken support at 770-790 zone where it found support quite a few times earlier as well. Holding 790, IRCTC is now poised to test its resistance at 835 levels. We recommend to go Long in IRCTC.

Strategy:- BUY IRCTC @ 802-806, SLOSS AT 788, TRGT 835.

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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