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January 24, 2025

Navigating the Opening Bell with Sbi Securities: 6 Key Technical and Derivative Insights
Nifty ends flat on expiry day, defends 23200
1. Global Market:
On Thursday, all 3 major US indices exhibited strong momentum. The S&P 500 gained 0.53%, while the #Nasdaq 100 and the #Dow ended the day 0.22% and 0.92% higher respectively.
Going ahead, the S&P 500 is likely to test 6180-6200 zone followed by 6300 level. While on the downside, the zone of 6100-6050 is likely to act as a support.
The #BrentOil ended on a negative note for the sixth consecutive day with a 1.36% loss. Going ahead, resistance is placed at the zone of $78-79, while on the downside, support is seen at $77-76.
The U.S. Dollar Index (#DXY) has been consolidating in the 108.50-107.50 range since the last four trading sessions. A decisive breakout on either side of the range will provide cues about the future direction of the currency index.
2. Nifty View:
On the expiry trading day, Nifty moved up steadily in the first half before parring off gains marginally in the second half, ending 0.22% higher at 23,205. The index has closed above its previous day high of 23,269.
The Midcap and Smallcap Index showed signs of bounce after witnessing intense selling pressure for the past two days. It is still advisable to wait for more visible signs of trend reversal. Midcap Index ended 1.86% higher at 54,099 while the Smallcap ended 1.12% higher at 17,365.
Going ahead, for Nifty, the zone of 23,100-23,050 will act as a crucial support for the index. Any sustainable move below the level of 23,050 will lead to further correction upto the 22,900 level.
On the upside, a move above the 23,350-23,400 zone could lead to a short-term pullback in the Index.
On the #derivatives front, January #futures rose by 0.28 percent, while the combined #OpenInterest for the current, next, and far series reduced marginally by 0.08 percent, indicating short covering.
Among the constituents of the #Nifty index, 17 stocks have witnessed a long build-up, and 16 of the stocks have witnessed a short covering rally. While 8 stocks have witnessed a short build-up, and 9 stocks have witnessed a long unwinding.
The 23,300 strike has significant call open interest, followed by the 23,500 strike. On the put side, 23,200 has a substantial open interest, followed by a 23,000 strike.
For the January monthly series, OI PCR is at 0.87.
Bank Nifty has formed a small bodied candle on the daily chart. It ended 0.28% lower at 48,589. Going ahead, the zone of 48,700-48,800 will act as an immediate hurdle for the index. While, on the downside, the zone of 48,400-48,300 will act as crucial support for the index.
3. Sensex View:
The benchmark index #Sensex nudged higher for the second consecutive day. It ended 0.15% higher at 76,520.
Going ahead, the zone of 76,250-76,200 will act as a crucial support for the index. Any sustainable move below the level of 76,200 will lead to a further correction in the Index upto the 75,800 level. On the upside, the zone of 76,800-76,850 will act as an immediate hurdle for the index.
On the #derivative front, January #futures rose by 0.16 percent, and the #OpenInterest of the current series reduced by 3.10 percent, indicating short covering.
The 76,700 strike has significant call open interest, followed by the 77,000 strike. On the put side, 76,500 has a substantial open interest, followed by a 76,200 strike.
For the weekly series, OI PCR is at 0.80
4. Key Market Indicators:
The volatility index, India #VIX, cooled off for the second consecutive day, giving some comfort to the bulls. It ended the day 0.46% lower at 16.70 level. Going ahead, any sustainable move above the level of 17.50 will lead to an increase in the overall market’s volatility, giving discomfort to the bulls.
The #Advance/Decline ratio was largely tilted in favor of advancers.
5. Key Sectors:
Technically, financial services, FMCG, Auto, Metal, PSU Bank, Energy, Media, and Realty are likely to underperform in the short term. On the other hand, IT, Pharma, and Oil & Gas can outperform in the short term.
6. FII/DII Data:
#FIIs sold to the tune of 5462.52 cr. while DIIs bought to the tune of 3712.55 cr.
FIIs' Long short ratio for index futures is at 18.78 as on a net basis, they bought 21817 index futures.
On the stock futures front, FIIs have bought to the tune of 37206 contracts, while on the Options Front, FIIs bought 246019 call contracts and bought 147582 Put Option contracts.
Macquarie on Ultratech
Maintain Outperform, TP Rs12,705 (Raise by 7%)
Expect demand recovery and cement price hikes from 2HCY24 lows to bode well for sector earnings.
Ultratech is best placed, in our view, with timely capacity addition, diversified regional mix,
Co has focus on sustainable cost savings.
Top pick in India cement.
CITI on Ultratech
Maintain Buy, TP Rs13,100 (from Rs12,500)
Estimate 12% volume CAGR through FY25-27
EBIDTA/ton upside (largely on costs) and continued growth profitability
Trades at $180 EV/T against historical peak of $250/ton
Prices have moved up 1.5% in Central and West India
Equirus on Ultratech
Long Call, Target At Rs13,490/Sh
Co Remains Our Top Cement Pick
Remain Bullish On Stock Given Its Strong Cash Flow Generation, Good Leverage Position
Sustained Focus On Cost Control, Aggression In Timely Capacity Additions Key Positives
DAM Capital on Ultratech*
Upgrade To Buy, Target Price Revised To Rs12,550/Sh
Structurally, Indian Cement Sector Should Witness Breather Led By Uptick Of Govt Infra Hereon
Slowing Pace Of Consolidation May Also Result Into Uptick In Indian Cement Sector
Mkt Share Gains Should Continue Owing To 11% Volume CAGR Over FY25-27 Vs 6-7% Ind CAGR
Nuvama on Ultratech
Hold Call, Target Revised To Rs11,574/Sh
Marginally Revising Up FY25, FY26 & FY27 EBITDA By 1% Each
Factoring In Better Demand Growth And Pricing Environment
Jefferies on Ultratech
Buy Call, Target At Rs13,265/Sh
All-Round Recovery Seen In Q3
Maintain Co As Their Top Cement Pick
Recent Price Uptick & Operating Leverage Will Drive Uptick In Q4 EBITDA To Rs1,100-1,150/t
Expect 14% Volume CAGR In FY24-FY27
CLSA On DRL
Underperform Call, Target At Rs1,120/Sh
US Sales Flat YoY But Declined QoQ Due To Lower Sales In Revlimid In Q3
Co Expects To Launch 15-20 Products In Us Over FY26/CY27
India Business Was Healthy
Slightly Raise Rev & Margin Estimates Over FY25-27 On Higher Growth In Recently Acquired NRT Biz
Citi On DRL
Sell Call, Target At Rs1,100/Sh
Q3 Was Subdued & Missed Expectations As Decline In US Was More Pronounced
Consolidation Of NRT, Lower R&D Spend & Decline In Base-line SG&A Helped In Flattish EBITDA QoQ
Commentary Was Positive On Long-term Drivers
Iron Sucrose, Which Is Anticipated By Street In Near-term, Has Been Delayed
HSBC On DRL
Hold Call, Target At Rs1,250/Sh
Q3 Revenue Beat On Integrated Nicotine Replacement Therapy Biz & R&D Milestone Income
Operationally Q3 Was In-line
Launch Of Anti-diabetic Medication Semaglutide In Canada In Early 2026 Offers Some Relief
Relief From Semaglutide Won’t Be Sufficient To Offset Revlimid Fall
Believe Growth Led By Semaglutide Will Be For A While Before Long-term Drivers Scale Up
Jefferies on DRL
Maintain Underperform, TP Rs1,170 (From Rs1,210)
Weakness in core profitability shows up
Incremental competition in top products and higher selling expenses
Weak US and core India sales, Strong performance in Russia and UK
Cut FYFY26-27 EPS by 3-6%
DAM Capital on DRL
Maintain Neutral, TP Rs1,331
Base profit (Ex-Revlimid) has stayed soft
Management guided for rationalizing selling and R&D expenses if big launches disappoint
Cut FY25 EPS by 5%
Key monitorable is gSemaglutide launch (especially in Canada)
Limited margin of safety
Nuvama on DRL
Maintain Buy, TP Rs1,533 (from Rs1,553)
US revenue dipped QoQ due to competition in key products.
Q3FY25 also marks consolidation of the NRT business.
Has continued higher R&D/SG&A spend utilising gRevlimid cash flow.
Adjusted EBITDA margin during the quarter stood at 25.6%, which is a positive.
Current valuation at 21x FY27E is attractive while key product approvals remain critical
Nomura On Sona BLW
Buy Call, Target Cut To Rs636/Sh
Slow Near-term; Tech-Driven Growth To Continue
Q3 EBITDA In-line With Estimates
Factoring In A Weaker Outlook For US EV Market; Pick Up In India EVs A Key Growth Driver
Lower EPS Est By 9%/16%/18% Over FY25/26/27
JPM on Cyient
Downgrade to N, TP cut to Rs 1750
Downgrade on back of unexpected CEO resignation & cut to FY25 CC revenue growth & Ebit margin guidance.
CEO Karthikeyan Natarajan’s resignation in less than 2 years (term was for 3 years) comes as -ve surprise
Co cut its FY25 CC revenue guidance to -2.7% (from flat earlier) & 4Q exit margin guide to 13.5% (from 16%)
This will make it challenging to achieve HSD growth in FY26 (JPMe 5%) & make it tougher to go back to 16% margins in FY26.
MS On BPCL
Overweight Call, Target At Rs419/Sh
Remain Overweight On Co With Oversupply In Feedstock & Strong Domestic Growth
Management Confident About Allocation Of Subsidy For Cooking Gas By April 2025
More Light Was Given By Co On Long-term Growth Plans & Near-term Headwinds
CO Expects To Gain Market Share Back From Private Players Eventually
CLSA On BPCL
Upgrade From Underperform To Hold, Target At Rs271/Sh
Miss In Q3 Results Led By Refining & Surprise Inventory Expense
Co Expects Losses To Be Largely Compensated For BY Govt In Upcoming Budget
Mgmt Expects Share Of Russian Crude In Sourcing Mix To Fall From 30% To 20% In March
Fall In Share Of Russian Crude In Sourcing Mix Should Be Easily Manageable
Stock Trades Near Our Tgt Price After Correction, Hence Upgrade From Underperform To Hold
Citi On HPCL
Buy Call, Target Rs450/Sh
Q3 EBITDA Rose Sharply
Sequential Earnings Improvement Was Marked By Improved Refining & Marketting Margin
Like BPCL, Miss Vs Est Was Largely On Higher Forex Losses, Staff Costs & Some Inventory Losses
Unlike BPCL, Refining Performance Was Largely In-line
All Eyes Will Be On Budget For Compensation To OMCs’ For Their LPG Losses
MS on HPCL
OW. TP Rs 506
Strong beat vs MSe with core PAT at Rs47bn
Marketing vol growth at 8% YoY continued to outperform industry growth
Integrated margin of US$9.3/bbl (includes US$3.7/bbl of LPG loss) was above MSe & mid-cycle
Citi on Indus Towers
Buy Call, Target At Rs485/Sh
Key Positives From Q3 Include Past Dues, Tenancies & Free Cash Flow
Q3 Marked Commencement Of Meaningful Tenancy Additions From Vi
Co Grabbed A Dominant Share Of Vi’s Rollouts
FCF Generation In Q3 Was Very Strong, Which Should Be Similar, If Not Higher In Q4
H2FY25 May See FCF Of Rs20/Sh, Which Could Be Entirely Paid Out As Dividend
UBS on Indus Towers
Maintain Buy, TP Rs425
Improving Free Cash Flow opens way for bumper dividend
Tenancy ratio stable at 1.65x
Key monitorable rural expansion
Macquarie on Indus Tower
Neutral, TP Rs 310
Dec-Q: Dues recovered; growth concerns remain
Tenancy ratio declined marginally to 1.65x while rev/Tower flat
EBITDA margin (52.6%, ex-write-back) increased 130bps QoQ driven on lower power & fuel costs
VI paid off Rs30 bn of dues
Jefferies on Syngene
Maintain Hold; Cut TP to Rs 860 from Rs 890
Posted another quarter of earnings miss and a lowering of guidance
With a delay in US biotech funding recovery, mgmt lowered its FY25 revenue growth guidance to 'single-digits' vs earlier guidance of 'high single digits to low double digits'
FY25 PAT is likely to remain flat - second year of weak growth
With valuations still steep, remain on the sidelines with 2-5% EPS cuts
Macquarie On Consumer Durable
Industrial/capex led electrical demand remains strong
B2C demand should gradually improve-following inline Q3FY25
Expect margins to improve from H2CY24 lows led by stable demand and benign commodity prices
Structurally prefer FMEG companies vs white goods
Havells top pick, Voltas least preferred
Havells-Maintain Outperform TP Rs1,899 (From Rs2,046)
Voltas-Maintain Neutral TP Rs1,595 (From Rs1,459)
Jefferies on Nippon AMC
Maintain Buy, TP Rs820 (FROM Rs850)
Stable core business performance
Commission rejig to aid yields
Co sees better SIP retentions vs the Industry
Cut EPS estimates by 4-10% for MTM impact, AUM growth and slower decay
Expect 25% CAGR for operating income from FY25-27
JPM on United Spirits
Maintain Neutral, TP Rs1,415
Q2-good quarter on revenue and margin front
Prestige segment volume aided by festive season and fast scale up in Andhra Pradesh
Popular segment NSV (Net Sales Value) growth higher since Q1FY23
Margins improve due to change in product mix, offset by higher staff costs
Investec on United Spirits
Buy, TP Rs 1647
Beat on Revenue; P&A delivers strong growth
Margin improvements on account of increased productivity
One-off expense in the quarter; PAT ahead of estimates
Revenue growth acceleration the key positive; commentary to be watched for
GS on United Spirits
Buy, TP Rs 1650
3Q significantly ahead of est.
Acceleration in vol & rev growth in a tough consumption environment
Gross margin & EBITDA margin expansion

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