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Nifty Outlook

Markets oscillated in a range and ended marginally higher, in continuation to the prevailing consolidation phase. The Nifty index opened with an uptick however profit taking trimmed gains as the day progressed. Most sectors ended lower however strong traction in two heavyweights viz. Reliance and Maruti helped auto and energy to close higher. Meanwhile, the broader indices underperformed and lost in the range of 0.4%-1%.

We may see further consolidation in the index and expect a similar trend on the global front as well. After the recent outperformance, banking may also take a breather and index majors from other sectors are likely to fill in the gap. Participants should maintain their focus on sector/stock selection and utilise dips to add during consolidation.

News

* Maruti Suzuki reported its Q2FY23 results, wherein it sold 517,395 units, with net sales growth of 67% YoY and 13% QoQ to Rs 29,931cr. It also reported better realization at Rs. 578,490/Unit, up by 23.6% YoY and 2.1% QoQ. Its EBITDA came in at Rs 2,779 Cr and EBITDA margin at 9.3%, an improvement of 466bps YoY.

* Tata Power announced its Q2FY23 results with its revenue at Rs 14,031 Cr up by 43.0% YoY, it reported EBITDA at Rs 1,760 Cr up by 5.8% YoY and reported a net profit of Rs 935 Cr up by 85.0% YoY.

* Vedanta announced its Q2FY23 results with its revenue at Rs 36,654 Cr up by 20.6% YoY, it reported EBITDA at Rs 7,699 Cr down by 26.01% YoY and reported a net profit of Rs 2,690 Cr down by 53.7% YoY.

Derivative Ideas

NIFTY gained 0.28% and closed at 17786.80 on 28th Oct. The index witnessed some resistance at 17800 levels. However the structure still remains positive. With Put base seen at 17600 strike in Nifty, we expect the index to trade with positive bias in the short term in the range of 17550-17750 thus suggesting selling PE as per the given levels.

Strategy:- SELL NIFTY 3 NOV 17400 PE @ 33-35, STOP LOSS 50, TARGET 5.

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