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Nifty Outlook

Markets witnessed fireworks all-around as the government set the roadmap for the economic recovery in the Union Budget by focusing on growth. After the initial downtick, the benchmark traded buoyant for most of the session and gained noticeable momentum after the budget speech got over. The FM in her budget speech prioritize growth and allocated funds for sectors such as infrastructure and healthcare. Further, investor’s sentiments improve as no additional taxes on LTCG, STT, COVID cess etc was imposed.

Consequently, the Nifty ended near day’s high at 14,281 levels, with healthy gains of 4.7%. All the sectors ended in positive with banks, capital goods and realty being the top gainers. Also, the broader market indices ended on an optimistic note in the range of 2-3%. We expect this budget rally to extend further however participants should be selective in their approach now. Going ahead, global cues and corporate earnings would also be on the radar. The way the banking index has moved on the budget day, we feel it could lead the next leg of the rally alongside infra counters.

News

* TVS Motor January auto sales rose 31% at 3.07 lakh units against 2.34 lakh units (YoY). Exports were up 43% at 1.01 lakh units YoY. 2-wheeler sales grew 34% at 2.95 lakh units and 3-wheeler sales were down 13.3% at 12,553 units YoY.

* Kansai Nerolac reported Q3 numbers wherein revenue was up 19.6% at Rs 1,592.5cr as against Rs 1,331.9cr YoY. Its EBITDA was up 53.9% YoY to Rs 304.3cr and net profit jumped 74.2% at Rs 204cr.

* Eicher Motors January’s sales were up 2.3% at 5,673 units as against 5,544 units YoY. Exports gained 7.4% at 555 units while domestic sales were up 1.9% at 4,964 units YoY

Derivative Ideas

HDFCLIFE FEB FUT added around 4% in open interest addition as LONG buildup was seen in it in till closing time. Current chart pattern also indicates further up move in its price. We suggest buying HDFCLIFE as per below levels.

Strategy:- BUY HDFCLIFE BETWEEN 695-700 SL 675 TARGET 740.

Investment Pick - Nippon Life India Asset Management Ltd.

* Nippon Life AMC reported decent set of numbers in Q3FY21 which was largely in-line with our expectations. Its mutual fund QAAUM grew by 6.5% QoQ led by healthy growth in both equity as well as debt AUM which grew by 7.3% and 5.3% QoQ. Further, despite lower yields, PAT grew by 42.7% QoQ driven by higher other income and cost saving initiatives.

* Going forward, we remain positive on Nippon AMC as it plans to regain its lost market share through a series of measures. In the long run, its consistent increase in equity assets, industry leading retail assets and strong presence in B-30 cities augurs well for the growth prospects of the company. Recommend Hold.

Buy Nippon Life India Asset Management Ltd @ 9-12 Months CMP 322.15 TGT 348

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