State Of Nifty + Stocks To Buy After Q4FY15 Result Updates

Cadila Healthcare (Q4 FY15) – BUY
CMP Rs1,688, Target Rs1,960, Upside 16.1%

• Solid end to FY15 with Q4 revenues up 16.2% yoy, ahead of expectation and led by 44% yoy surge in US revenues
• Margin improve ~300bps yoy, PAT up ~47% yoy on stellar operating performance
• Retain BUY on revised but still strong 25% EPS cagr over FY15-17E with fresh 9-12mth target of Rs1,960

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Torrent Pharmaceuticals (Q4 FY15) – BUY
CMP Rs1,257, Target Rs1,460, Upside 16.2%

• Torrent reported an all round miss in Q4 though adjusted for one offs revenues up 10% yoy; reported US revenues down 44% yoy
• Adjusted India revenues up 23% yoy excluding the impact of Elder Pharma business
• Strong growth in Brazil and near term boost from gAbilify support our BUY rating for unchanged 9-12mth target of Rs1,460

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Derivative Report: Nifty 9500! An Impending up-move likely

• Nifty failed to conquer “9000” level on a closing basis even after being in its close vicinity of (-20+100 points range) on intraday basis seven times during the year. Option data for Nifty from Dec ’14 to Mar ‘15 series clearly pointed out 9000 acting as a ceiling.
• During the recent fall (Mar’15 – May’15), total derivative position reduced from Rs. 1.08 lakh crore to Rs. 0.79 lakh crore, a drop of ~27% though the market correction was limited to 12%. Since 2012, correction in Nifty has been in the range of 6-16% and total average reduction in derivative position was to the tune of 15%, indicating current fall is mirroring its historical pattern and a bottom for Nifty could be in place.
• Various statistical parameters mentioned in this report suggest the recent correction has been healthy and a base formation is in the process for Nifty to resume its secular uptrend. This note is an attempt to graphically represent volatility from a historical perspective.
• Since, FIIs are market makers in Indian equities; the behavioral historical trend of FIIs is of utmost importance. In this report, we try to point out certain historical data points, which suggest high probability of an up-move on Nifty (towards 9500+ level) in the near term.
• On a technical basis, recent correction in Nifty seems to be a three wave structure, where wave “C” (848 points from 8845 to 7797) is equal to wave “A” (850 points from 9119 to 8269).
• The prevalent scenario in Indian bourses indicates a trait of an ongoing bull market. In fact, the current correction too is symptomatic of a perfect bull trend.

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