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Nifty Outlook

Markets traded lackluster in a narrow range and ended almost unchanged citing caution ahead of the FOMC meet outcome. Among the sectoral indices, noticeable traction was witnessed in the IT and realty pack while weakness in banking heavyweights restricted the upside. Meanwhile, the broader indices managed to put a decent show as both midcap and smallcap ended with gains of more than 1%.

The outcome of the FOMC meet would dictate the trend in early trades on Thursday (September 23). Apart from any hint on the tapering timeline and rate hike, the commentary on inflation and growth forecasts will remain in focus. Besides, we have weekly expiry of the indices also scheduled. In short, we expect volatility to remain high thus we recommend restricting naked leveraged positions and waiting for clarity.

News

* Dynamatic Technologies bagged a Boeing contract to produce aero structures for fighter jet.

* Torrent Power entered into a share purchase agreement to acquire 100% stake in Surya Vidyut at an enterprise value of Rs 790cr.

* Surya Roshni has received order of Rs 41.2cr for implementation of smart LED street lights and installation of a centralized monitoring system with operation and maintenance from Greater Noida Industrial Development Authority .

Derivative Ideas

ASTRAL FUT has added around 12% in open interest in as fresh long build up was seen in it. Current chart pattern also indicates further up move in its price. We suggest buying in ASTRAL as per below levels.

Strategy:- BUY ASTRAL BETWEEN 2110-2120 SL 2070 TARGET 2210.

Investment Pick - Orient Electric Ltd.

Orient Electric Ltd. (OEL) is part of the diversified USD 2.4 billion Indian conglomerates CK Birla group. OEL is a 60-year-old brand in fans and has established itself as a one-stop brand for lifestyle electrical solutions which include fans, lighting, home appliances and switch gears. Orient Electric has manufacturing facilities in Kolkata, Faridabad and Noida.

The company enjoys a marketing presence across 35 countries. In the domestic market, it has a robust sales/ distribution network and service network with pan-India coverage. After a muted show in FY21 due to the pandemic, we expect OEL’s revenue to grow at 17.5% CAGR over FY21-24E led by a recovery in both ECD and lighting & switchgear segment. On the margins front, higher operational efficiencies coupled with the focus on premiumization would aid margin improvement for OEL. We estimate OEL’s Revenue/EBITDA/PAT to grow at 17.5%/18.6%/24.8% over FY21-24E. We recommend a Buy on the stock with a target price of Rs. 439.

Buy Orient Electric Ltd @ 9-12 Months CMP 348.1 TGT 439

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