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Nifty Outlook

The buoyancy continued for the second consecutive session as participants gave a thumbs up to the Union Budget. The rally was largely driven by pro-growth budget announcements and supportive global cues. Also, decent numbers from auto companies aided sentiments. Consequently, the Nifty ended on a strong note, up by 2.6% at 14,648 levels. All the sectoral indices ended in positive with Auto, Banks and Capital goods were the top gainers.

The broader market indices traded in tandem and gained in the range of 1.6-2.3%. Now as the budget is behind us, all eyes will be on RBI monetary policy outcome scheduled on Friday i.e. February 5. Meanwhile, as more corporates announce their results, stock-specific volatility would remain high. Markets may see a breather after the recent surge but the bias would remain on the positive side. Participants should maintain their focus on identifying the right opportunities across sectors.

News

* HDFC reported Q3 results wherein revenue was down 42.3% at Rs 11,707cr while its net profit fell 65% YoY to Rs 2,925.8cr. Last year Q3 numbers included GRUH finance sales of Rs 9,019.8 cr.

* Dixon Technologies Q3FY21 revenue was at Rs 2,182.78cr versus Rs 993.81cr YoY. Its net profit came in at Rs 61.59cr as against Rs 26.3cr.

* Nocil’s consolidated revenue jumped 41.3% YoY to Rs 274.6cr for Q3FY21. Its net profit grew by 6.2% to Rs 22.3cr YoY.

Derivative Ideas

BANKNIFTY FUT added around 12% in open interest addition as LONG buildup was seen in it in LAST 2 days. Current chart pattern also indicates further up move in its price. We suggest buying Banknifty 11feb 35500 CE as per below levels.

Strategy:- BUY Banknifty 11feb 35500 CE at 230 sloss at 180 trgt 330.

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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