Buy Aurobindo Pharma in range of Rs. 970-987
Target: Rs. 1160
Stop Loss: Rs. 890
Time frame: Three months
Derivatives & Quantitative Outlook
Pharma stocks have remained quite resilient in the last couple of weeks whereas broader markets have come under consolidation. The RBI will ramp up Covid-related healthcare infrastructure by opening an on-tap liquidity window of Rs. 50,000 crore, which may provide acceleration to the pharma sector. We believe a fresh uptrend may be seen in the pharma space where stocks like Aurobindo Pharma are likely to outperform.
The stock has witnessed continued short covering since the September 2020 series. During this period, it shed almost 35% open interest while the stock recovered almost 30% from its bottom. The stock has bottomed out near its long term support level of Rs. 700. Currently, considering prevailing low leverage, there is ample room for increase in open interest. We expect long additions in the stock once it sustains above Rs. 1000 levels.
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Shares of AUROBINDO PHARMA LTD. was last trading in BSE at Rs.1008.5 as compared to the previous close of Rs. 1018.1. The total number of shares traded during the day was 163630 in over 6657 trades.
The stock hit an intraday high of Rs. 1038 and intraday low of 1000. The net turnover during the day was Rs. 166414335.