Gladiator Stocks New recommendations Time Frame: 6 Months Open Recommendations Date Scrip I-Direct Code Buying Range Target Stoploss Upside (%) Momentum Picks 5-Jan-21 TCS TCS 3030-3085 3,465.00 2,840.00 13.00 5-Jan-21 Marico MARLIM 400-415 480.00 367.00 18.00 Scrip Action Jindal Saw Buy PICK MOMENTUM Open recommendations Time Frame: 6 Months Hikal Buy Date Scrip Avg Rec Price Target Stoploss CMP Return till date (%) JK Lakshmi Cement Buy 28-Dec-20 TTK Prestige 6,000.00 6,970.00 5,490.00 6,307.00 5% Duration: 14 Days 10-Dec-20 Abbott India 15,500.00 17,920.00 13,910.00 15,715.00 1% 9-Dec-20 Godfrey Phillips 985.00 1,140.00 840.00 990.00 1% Click here to know more… 4-Dec-20 Alkem Laboratories 2,856.00 3,310.00 2,610.00 2,980.00 4% 11-Nov-20 VST Tillers Tractors 1,892.00 2,190.00 1,720.00 1,987.00 5% All the recommendations are in Cash segment Retail Equity Research Equity Retail – January 5, 2021 Research Analysts Dharmesh Shah Nitin Kunte, CMT Ninad Tamhanekar, CMT ICICI Securities Securities ICICI [email protected] [email protected] [email protected] Pabitro Mukherjee Vinayak Parmar [email protected] [email protected] Tata Consultancy Services (TCS): Breakout from rising channel signifies acceleration of upward momentum… Rec. Price 3030.00-3085.00 Target 3465.00 Stop loss 2840.00 Upside 13% Weekly Chart Target @ o The Nifty IT index has maintained | 3465 A resolute breakout from six years rising channel signals inherent Past three months its relative outperformance in strength and offers fresh entry opportunity consolidation breakout CY21 and scaled to a fresh all time 2885 high, indicating continuance of upward momentum o Within IT space we remain 2600 constructive on TCS as it has 2276 resolved out of past three months PICK MOMENTUM consolidation (|2885 - |2600), indicating resumption of primary up trend that augurs well for next leg of major up move o The stock has rebounded after 10 weeks forming a higher base near 10 EMA weeks EMA (currently at | 2830) which has been held since April 1420 1506 2020, indicating resilience as Support @ 2840 as it is: buying demand observed at - 10 weeks EMA @ 2830 elevated support base - Past two weeks low @ o Structurally, stock has logged a 2845 breakout from six years rising channel (as shown in chart), 1026 indicating acceleration of upward Research Equity Retail momentum – o In a nutshell, we expect stock to Weekly MACD pointing upward while sustaining well above its nine period average, indicating endure its upward momentum and acceleration of upward momentum head towards | 3465 levels as it is the price parity of October rally (| 2302-2885), projected from recent consolidation breakout area Securities ICICI of |2885, is placed at | 3468 Source: Spider Software,, ICICI Direct Research Recommendation initiated on i-click to gain at 11:03 on 5th January, 2021 January 5, 2021 ICICI Securities Ltd. | Retail Equity Research 2 Fundamental View: Tata Consultancy Services (TCS) Particulars • Tata Consultancy Services (TCS) is an IT service company catering to various segments like banking & insurance (~30% of revenues), Particular Amount communication (~7%), manufacturing (~10%), life science & healthcare (~8%), technology & services (~9%), regional markets (~20%) and Market Capitalization (| Crore) 11,55,750.0 CPG & retail (~15%). Geographically, the company generates ~52% revenues from Americas, 31% from Europe and 17% from rest of the world Total Debt (| Crore) 8,174.0 Cash and equivalents (| Crore) 35,939.0 • Tata Consultancy Services (TCS) has, over the years, invested in R&D, platforms and digital reskilling that has helped the company to register EV (| Crore) 11,27,985.0 consistent strong financial performance. The company has also shown its ability to mine clients effectively as it has doubled its US$100 million 52 week H/L 3112 / 1504 client over FY14-20 despite its size. In addition, TCS has witnessed strong deal wins and has balance sheet strength to carve out complex large Equity capital (| Crore) 375 deals. The recent Transamerica and Postbank deals are a few examples Face value | 1 MOMENTUM PICK MOMENTUM • Further, TCS believes it is in the first phase of a multi-year technology transformation phase. In the current phase, enterprises are building a Financials cloud-based foundation that will serve as a resilient, secure and scalable digital core. In subsequent phases, enterprises will see new age Financials FY20 FY21E FY22E FY23E technologies developed around cloud to lead to new business models and differentiated customer experiences. TCS’ investments in building deep Net Sales 1,56,949 1,62,403 1,78,581 2,01,986 expertise on these platforms, in research & innovation and in industry-specific solutions will make it a key beneficiary of this secular demand EBITDA 42,110 45,148 51,074 58,374 growth in coming years. In addition, we expect TCS to witness a healthy margin trajectory led by cost rationalisation, improving growth in high EBITDA Margins (%) 27 28 29 29 margin digital technologies, benefits of lower attrition and operating leverage benefit Net Profit 32,340 32,341 38,444 43,751 EPS (|) 86 87 104 118 • Going forward, global digital technologies are expected to witness robust growth (~15-20% CAGR in next few years) led by healthy growth in cloud, customer experience and cloud native technologies. TCS is expected to be a key beneficiary of this trend leading to double-digit revenue Valuation growth over a sustainable period. This, coupled with industry leading growth & solutions, better capital allocation, stable management and higher P/E 36 35 30 26 revenue growth trajectory prompt us to be positive on the stock RoNW (%) 38 37.2 42 46 RoCE (%) 43 45 49 53 Price performance of last 5 years Research Equity Retail – 50 40 32 30 14 14 10 ICICI Securities Securities ICICI % Change % -10 -3 Source: Bloomberg, ICICI Direct Research CY16 CY17 CY18 CY19 CY20 January 5, 2021 ICICI Securities Ltd. | Retail Equity Research Year 3 Marico (MARLIM): Breakout above long term supply line augurs well for next up move… Rec. Price 400.0-415.0 Target 480.00 Stop loss 367.00 Upside 18% Weekly Chart o The FMCG space has seen strong A resolute breakout above the supply line joining previous major highs Target @ | 480 demand in the last year. The share since CY 2018 signals shift of price range to higher orbit thus offers fresh price of Marico has been relative entry opportunity underperformer and has been consolidating in a range in the last 404 three years. The stock is currently 396 breaking out of the range and is 383 PICK MOMENTUM expected to witness catch up activity in the coming months Support o The stock has generated a 345 @ 370 breakout above the supply line joining highs of CY 2018 (| 396) 325 and CY 2019 (| 404) signalling A Faster retracement shift of price range to higher orbit, and a higher base above thus offers fresh entry opportunity the 52 weeks EMA o It has recently witnessed a faster 277 retracement of the last falling segment as nine weeks decline (| 383 to 345) was completely 234 retraced in just five weeks. A faster retracement signals a robust price structure Weekly 14 periods RSI in uptrend and is seen rebounding taking support at its o The base of the recent Research Equity Retail nine periods average thus validates positive bias consolidation is placed at the 52 – weeks EMA and the rising demand line joining lows since May 2020 (| 277), placed around | 370 which is likely to act as major demand area o We expect the stock to head Securities ICICI towards | 480 in the coming months as it is the 150% external Source: Spider Software,, ICICI Direct Research Recommended on I-click to gain on 05th January 2021 at 10:25 retracement of the entire decline January 5, 2021 ICICI Securities Ltd. | Retail Equity Research (| 404-234) placed at | 480 4 Fundamental View: Marico (MARLIM) Stock Data • Marico is large FMCG company with strong brands like Parachute, Saffola, Nihar. The company is market leader in Particulars (| crore) Amount coconut hair oil & edible oil segment. Further, its food segment is growing at a fast pace largely capturing healthy at- Market Capitalization 54,059.4 Total Debt (FY20) 325.0 home consumption trend Cash and Investments (FY20) 907.0 EV 53,477.4 • Hair oil category is saturated with limited growth opportunity. In Parachute, ~30% category is unorganized creating 52 week H/L (|) 403 / 234 limited opportunity to grow through market share gains only. Similarly, VAHO (Value Added Hair Oil) segment has Equity capital 129.0 become crowded with too many brands chasing a limited opportunity. We believe growth opportunity for Marico is Face value (|) 1.0 limited to select brands in VAHO. We believe continued demand for healthier edible oil & food products would result in MOMENTUM PICK MOMENTUM stronger growth for entire Saffola franchise that is contributing ~25% of consolidated sales. The company launched Financial Highlights Saffola Honey, Saffola Arogyam Chyawan Amrut and immunity boosting products in the last six months to leverage | Crore FY20 FY21E FY22E FY23E high demand for these products. We expect high growth in edible oil & foods products to compensate for low growth in Net Sales 7,315 7,553 8,336 8,753 the hair oil segment EBITDA 1,469 1,577 1,721 1,786 Net Profit 1,043 1,136 1,229 1,274 • Despite a sharp rise in copra & rice bran prices, it has been able to maintain its operating margin.