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Nifty Outlook

Markets traded volatile in a range and settled with a cut of nearly a percent. After the initial uptick, the benchmark hovered in a range in the first half however selling pressure in the latter half trimmed pushed the index lower. Consequently, Nifty settled around the day’s low to close at 17,646 levels. Amongst the sectors, most indices ended in the red wherein metal and realty were among the top losers. The broader market indices too witnessed selling pressure as both midcap and smallcap lost nearly a percent each.

The recent choppiness is reflecting a cautious stance among the participants citing mixed signals from the global markets. And, the upcoming domestic events will further add to the volatility. We reiterate our view to focus more on the selection of stocks and prefer hedged positions. Nifty has the next critical support at 17,500.

News

* Tata Steel BSL has achieved the highest ever crude steel production of 1.20 mn tons in 2QFY22.

* Cyient announced the appointment of Rajaneesh Kini as Senior Vice President & Chief Technology Officer.

* Tata Consultancy Services has announced that its long-standing partnership with State Bank of India has been extended for another five years as the bank embarks on its next leg of growth based on the three pillars of technology, resilience and people.

Derivative Ideas 

CROMPTON FUT has added around 20% in open interest as fresh short build up was seen in it. Current chart pattern also indicates further down move in its price. We suggest selling CROMPTON OCT FUT as per below levels.

Strategy:- Sell CROMPTON OCT FUT@487-489, sloss at 498, trgt 467.

Investment Pick - Metropolis Healthcare Ltd.

Incorporated in 1980, Metropolis Healthcare is one of the leading diagnostic players in India. It has a dominant share in the country’s western and southern regions. It offers a comprehensive range of 4,000+ clinical laboratory tests. It also offers analytical and supports services to clinical research organisations for their clinical research projects. Metropolis has spread its footprint across 19 states & 210 cities.

The diagnostic industry is expected to register strong growth driven by multiple growth drivers. Within this space, we like Metropolis given its pan India presence, asset-light business model, strong brand equity, and wide range of tests. Further, a sharp focus on increasing its B2C business and specialized testing would aid margin improvement. We expect Metropolis Revenue/EBITDA/PAT to grow at 17.9%/18.4%/20.2% over FY21-24E. We initiate with a Buy rating on the stock with a target price of Rs. 3,422.

Buy - Metropolis Healthcare Ltd @ 9-12 Months CMP 2,807 TGT 3,422

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