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Nifty Outlook

Markets ended marginally higher in a volatile session, tracking mixed cues. Initially, weak global cues were weighing on the sentiments however resilience in the IT majors not only capped the downside but also helped the index to inch higher. As the day progressed, index majors from other sectors also contributed to the move. Eventually, the Nifty index ended higher by 0.2% at18,043 levels. Amongst the sectors, Power, IT and Realty ended with gains whereas Metal and Telecom ended with losses. Amid all, the broader indices ended flat, taking a breather after the recent surge.

We’re in the fourth week of rebound and now all eyes are on the earnings of three IT majors i.e. Infosys, TCS and Wipro for cues. We reiterate our positive yet cautious view on markets and suggest focusing more on sector/stock selection.

News

* Marksans Pharma has received final approval from US FDA for its Abbreviated New Drug Application for over the counter Cetirizine Hydrochloride Tablets 5 mg and 10mg. The product will be marketed under store brand labels and is comparable to the brand Zyrtec.

* JSW Steel reported a 28% YoY growth in its combined crude steel output for the quarter ended December at 5.35 million tonnes.

* Aurobindo Pharma announced that its subsidiary CuraTeQ Biologics Pvt. Ltd. has expanded the scope of its marketing and distribution agreement with Orion Corporation (Orion) to commercialize its biosimilars pipeline to include the Baltic states in Europe.

Derivative Ideas

TATASTEEL shed 3.32% and closed at 1130.25 on 11th Jan. TATASTEEL is trading with sync with its pack as complete Metal sector is looking weak. Now Short Buildup is being seen in TATASTEEL Fut. We recommend to go Short in TATASTEEL with the PE option.

Strategy:- BUY TATASTEEL 1120 PE@19-22, SLOSS AT 10, TRGT 40.

Religare New Year Pick - Metropolis Healthcare Ltd.

Incorporated in 1980, Metropolis Healthcare is one of the leading diagnostic players in India. Metropolis has spread its footprint across 19 states & 210 cities. It has a dominant share in the 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.

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 strong focus on increasing its B2C business and specialized testing would aid margin improvement. We thus raise our estimate for Metropolis and expect Revenue/ EBITDA/PAT to grow at 19.0%/18.9%/20.9% over FY21-24E. We recommend a Buy rating on the stock with a target price of Rs. 3,867.

Buy - Metropolis Healthcare Ltd. @ CMP :-  3,169.45 Recommendation Price 3,335 Target 3,867 Duration 9-12 Months.

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