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Nifty Outlook

Markets traded volatile in a range and closed marginally lower, extending the recent fall. The benchmark opened gap down amid weak global cues and hovered in a narrow range for most of the session. Consequently, the Nifty index closed at 17,711 levels, down by 0.2%. On the sector front, a mixed trend was witnessed wherein financials, FMCG, auto and IT dragged the benchmark down while PSU bank, metal and energy attracted noticeable interest which capped the downside. Amid all, the broader indices outperformed and ended with gains in the range of 0.4-1.1%.

We expect choppiness to continue due to the scheduled expiry of September month derivatives contracts on Thursday. Besides, the cues from the global markets are also not very encouraging. We thus recommend continuing with a cautious approach and preferring hedged positions.

News

* TCS has been selected as a strategic partner by Apoteket, Sweden's largest pharmaceutical retailer, to accelerate its digital transformation and growth.

* Godrej Properties announced that it has entered into an agreement to redevelop a land parcel at Wadala, Mumbai, which is spread across 7.5 acres. This project will offer ~1.6mn sqft of saleable area comprising primarily of residential apartments of various configurations.

* EaseMyTrip launched an industry-first feature that offers discounted air tickets to users with waitlisted train tickets. This will enable users to discover last-minute alternate travel options in case of unconfirmed train tickets.

Derivative Ideas 

TATACHEM FUT has added around 15% in open interest combined as fresh long build up was seen in it. Current chart pattern also indicates further up move in its price. We suggest buying in TATACHEM in cash market as per below levels.

Strategy:- BUY TATACHEM at 917-920, sloss at 910, trgt 940.

Investment Pick - Orient Electric Ltd.

Orient Electric Ltd. (OEL) is part of the diversified USD 2.4 billion Indian conglomerates CK Birla group. OEL is a 60-year-old brand in fans and has established itself as a one-stop brand for lifestyle electrical solutions which include fans, lighting, home appliances and switch gears. Orient Electric has manufacturing facilities in Kolkata, Faridabad and Noida. The company enjoys a marketing presence across 35 countries. In the domestic market, it has a robust sales/ distribution network and service network with pan-India coverage.

After a muted show in FY21 due to the pandemic, we expect OEL’s revenue to grow at 17.5% CAGR over FY21-24E led by a recovery in both ECD and lighting & switchgear segment. On the margins front, higher operational efficiencies coupled with the focus on premiumization would aid margin improvement for OEL. We estimate OEL’s Revenue/EBITDA/PAT to grow at 17.5%/18.6%/24.8% over FY21-24E. We recommend a Buy on the stock with a target price of Rs. 439.

Buy - Orient Electric Ltd @ 9-12 Months CMP 328.35 TGT 439

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