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Nifty Outlook

Markets traded under pressure and lost nearly one and a half percent, tracking weak global cues. The inflation data in the US spooked investor sentiments worldwide including India, which resulted in a gap-down opening. Though the benchmark tried to trim some losses in the middle, selling pressure in the final hours pushed the index lower. Finally, the Nifty index settled at 17,374; down by 1.31%. The fall was widespread and mostly sectoral indices ended in the red wherein IT, consumer durables and realty were the top losers. The broader indices also ended with a cut of over 2% each.

Markets have been struggling at higher levels and this time, news of US inflation hitting a 40-year high has dampened sentiment. We feel the choppiness would continue and the focus would remain on the global markets and earnings. Besides, scheduled macroeconomic data i.e. IIP, CPI and WPI Inflation will also be closely watched. Considering the erratic swings, it’s prudent to limit positions and wait for some stability.

News

* Linde India signed a 15-year long-term agreement structured on Lease and O&M basis with ESL Steel Ltd. (ESL), a Vedanta Group Company for supply of 800 tonnes per day of Oxygen and 900 tonnes per day of Nitrogen to them at their steelworks at Bokaro.

* DIvis Lab reported its results wherein revenue was up 47% YoY and its net profit was up 92% YoY to Rs. 902 cr.

* Mylab Discovery Solutions, diagnostic solutions provider, announced its foray into the vaccine and therapeutics segment with its strategic tie-up with Shilpa Biologicals Pvt Ltd (a 100% subsidiary of Shilpa Medicare Ltd), a specialist manufacturer of vaccine and wide variety of biologicals.

Derivative Ideas

BALKRISHIND FEB FUTS shed 4.66% and closed at 2165 on 11th Feb. The stock has seen a breakdown on charts below 2240 levels. Now with Fresh Shorts added in the FUTS, it is poised to test its support at 2100 levels. We recommend to go Short in BALKRISIND FEB FUTS.

Strategy:- SELL BALKRISIND FEB FUTS @ 2190-2200, SLOSS AT 2240, TRGT 2100.

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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