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Nifty Outlook

Markets witnessed a sharp sell-off and lost nearly 5% as escalating tensions between Russia and Ukraine spooked sentiments. Investors chose to move out of risky assets and preferred safe haven like gold. The Nifty index drifted gradually lower and finally settled around the day’s low to close at 16,247 levels. In line with the benchmark, all the sectoral indices and broader indices ended with deep cuts.

Markets are rattled with the news of Russia’s attack on Ukraine and it may cascade further citing the further news updates. This fall has resulted in the breakdown of the consolidation range in the Nifty index and it might find support around the 15900-16,000 zone. Traders should align their position accordingly and prefer trading through options strategies.

News

* Ashoka Buildcon has received Letter of Acceptance for the Project viz. 'Electrification of Railway Lines in the State of Assam. The accepted offer of the project is Rs 692.50 cr and the contract period is 900 days.

* Bharat Forge has entered into a definitive agreement to acquire JS Autocast Foundry India Private Limited.

* Intellect Design Arena and Wyth Financial, one of Canada’s leading mid-market digital banks, announced that the bank has gone live with Intellect Contextual Banking Experience - Retail (CBX-R) deployed on Microsoft Azure to offer fully digital direct to-customer bank offerings to its customers.

Derivative Ideas

CIPLA shed 2.09% and closed at 895.8 on 24th Feb. The stock has formed indecisive candle right at its support at 875-890 zone. CIPLA managed to hold well amid tumbling markets. Holding 870, the counter is likely to test its resistance at 930 levels. We recommend to go Long in CIPLA.

Strategy:- BUY CIPLA @ 884-890, SLOSS AT 870, TRGT 920

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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