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Nifty Outlook

Markets traded volatile and lost over a percent amid feeble global cues. The news of war intensifying between Russia-Ukraine led to a weak start, which further deteriorated citing a sharp surge in crude oil prices. However, a rebound in the last hour of the trade trimmed some losses. Consequently, the Nifty index settled around 16,605.95; down by 1.12%. Most sectoral indices ended lower in line with the benchmark while the broader indices traded mixed.

Markets have been gradually inching lower amid erratic intraday swings but the dent is more severe on the broader front. We feel the volatility is here to stay and the scheduled weekly expiry would further add to choppiness on Thursday. Among the sectors, metal and energy pack look firm while others are witnessing mixed trends. Participants have no option but to align their positions according to the trend and prefer a hedged approach.

News

* Tata Motors posted February auto sales numbers wherein total sales were up 27% at 73,875 units as against 58,366 units YoY.

* M&M auto sales for the month of February were up 89.2% at 54,455 units as against 28,777 units YoY. Passenger vehicle sales were up 80% YoY at 27,663 units while exports were up by 54% YoY at 2,814 units.

* Ashok Leyland auto sales for February rose by 7% to 14,657 units as against 13,703 units YoY.

Derivative Ideas

MUTHOOTFIN gained 2.03% and closed at 1386.3 on 2nd Mar. The stock after taking the support at 1300 levels shown good up move. The counter has given a breakout above 1370 with Fresh Longs added in its FUT. Minor resistance at 1400, crossing above that, MUTHOOTFIN is poised to test 1450 levels. We recommend to go Long in MUTHOOTFIN.

Strategy:- BUY MUTHOOTFIN @ 1365-1375, SLOSS AT 1330, TRGT 1425.

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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