4-Jan-18 Titan 865.00 1048.00 768.00 806.00 -6.8 Date Scrip Avg …

[Pages:11]Gladiator Stocks

MOMENTUM PICK

ICICI Securities ? Retail Equity Research

New recommendations

Date

Scrip

5-Mar-18

TCS

Open recommendations

Date

Scrip

4-Jan-18

Titan

5-Jan-18

Zee TV

9-Jan-18

Reliance Industries

23-Jan-18

VST Industries

29-Jan-18

Maruti

14-Feb-18

Tata Motors

23-Feb-18

Merck

Research Analysts

Dharmesh Shah dharmesh.shah@

Pabitro Mukherjee pabitro.mukherjee@

I-Direct Code Buying Range

TCS

3010.00-3070.00

Target 3410.00

Avg Rec Price 865.00 576.00 935.00 3105.00 9610.00 375.00 1485.00

Target 1048.00 698.00 1070.00 3840.00 10795.00 422.00 1750.00

Stoploss 768.00 522.00 865.00 2770.00 8645.00 347.00 1370.00

Nitin Kunte, CMT nitin.kunte@

Vinayak Parmar vinayak.parmar@

Stoploss 2,850.00

Time Frame: 6 Months Upside (%) 12.0

CMP 806.00 555.00 938.00 3,160.00 8,824.00 360.00 1,525.00

Time Frame: 6 Months Return till date (%) -6.8 -3.6 0.3 1.8 -8.2 -4.0 2.7

March 5, 2018

Open Recommendations Momentum Picks

Ipca Labs

Buy

Prism Cement

Buy

NCC

Buy

Duration: 1 month

Click here to know more...

Stock on the Move

Scrip

Action

Mahindra CIE

Buy

Duration: 3 Months

Click here to know more...

Ninad Tamhanekar, CMT ninad.tamhanekar@

Tata Consultancy Services (TCS) ? Stock gearing up to head towards uncharted territory...

Technical Outlook

? TCS is a leading Indian IT service company with the highest employee base of 3.91 lakh. The share price of TCS has been trading in a secular up trend forming a higher high - low on the long term chart. After registering highs of | 2840 in October 2014, the stock has undergone a secondary phase of consolidation in a broader range of | 2850?2120. In January 2018, the stock recorded a breakout from the three-year long consolidation, indicating resumption of primary up trend. Recently, the stock has seen a throwback from a new lifetime high of | 3259, helping to work off the overbought condition of weekly stochastic oscillator. The overall price structure makes us believe the stock has confirmed the three year long consolidation breakout by retesting it and is now well positioned to accelerate the momentum, thereby providing opportunity to create fresh long position from a medium-term perspective

? The last leg of the up move was captured in a well defined parallel rising channel drawn adjoining lows of November 2016 ? July 2017 calculated from the high of February 2017. This eventually aided the stock to conclude the three year long consolidation, indicating a resumption of the up trend

Monthly Bar Chart

Implicated target of Rising channel breakout near 3410

With recent throwback stock has confirmed the breakout of three years long consolidation, auguring well for next leg of up move

2840

3259 2892

2555

2325

2052 2000

? The stock has seen a sharp price up move and shallow correction in terms of magnitude, compared to the price action of three years long consolidation phase of 2014-17, indicating a structural turnaround.

? We believe the recent throwback has approached its maturity and is likely to resume its up trend as it is the confluence of:

Consolidation breakout supported by strong volumes

a) Throwback arrested near 50% of its earlier six weeks rally (| 2494?3259), placed at | 2876

MACD in strong uptrend diverging from its signal line

b) Base formation near three week's identical lows of | 2895

? In a nutshell, we believe the stock is likely to outperform the broader market as it has set the stage to unfold the next leg of rally towards | 3410 as it is the implicated breakout target of the aforementioned rising channel

Source: Bloomberg, ICICI Research

March 6, 2018

ICICI Securities Ltd. | Retail Equity Research

% Change

Strategy

Buy

Buying range

3010-3070

Target

3410

Stoploss

2850

Potential upside

12%

Time Frame

6 Months

Recommended on i-click to gain at 09:56 hrs on March 05, 2018

Stock Data Market Capitalisation (| Cr.) Face Value (|) 52 Week High / Low 50/200 day EMA 3m Avg volume MF Holding(%) FII Holding(%)

585820 1

3259/2253 2892/2619

241lacs 1.27 16.26

Price performance last five years

100

73

18

14

0

-5

-3

2013 2014 2015 2016 2017

-100 Year

2

ICICI Securities ? Retail Equity Research

GLAMDOIAMTEONRTSUTMOCPIKCSK

Tata Consultancy Services (TCS): Fundamental View

MOMENTUM PICK

ICICI Securities ? Retail Equity Research

Tata Consultancy Services (TCS) is a leading Indian IT service company with the highest employee base of 3.91 lakh. Over the last five years, the company's dollar revenues grew at a CAGR of 11.6% to $17.6 billion. The company operates its services across industry verticals led by BFSI that contributes 32.1% of revenues (in Q3FY18) followed by retail & CPG with 12.5% contribution. In terms of geography, US is the major contributor with 54% and is followed by Europe with 27.6% contribution.

Leading Indian IT service company

TCS is a leading Indian IT service company with its revenues growing at a CAGR of 19.3% to | 117966 crore and PAT growing at 19.8% to | 26289 crore, over the last five years consistently outperforming the industry growth. In terms of EBIT margin, TCS reported EBIT margin of 25.2% in Q3FY18 despite seasonal and macro headwinds. Its EBIT margin is higher than peers. Going ahead, the management continues to target its EBIT margin to remain in the band of 26-28% in constant currency terms.

Digital business gaining momentum

Digital contribution continue to rise and contributed 22.1% to total revenues in Q3FY18 vs 16.8% in Q3FY17. It continues its digital growth trajectory with yearly growth above 20% for four consecutive quarters and grew at a healthy 43.5% YoY in Q3FY18 in reported terms. In the recent quarter, TCS signed its first US$50 million+ deal in the digital space indicative of the traction company is seeing in digital deals. Capturing significant opportunities in cloud automation, analytics and IoT has led the company achieve the annual run rate of ~US$ 3 billion in revenues from digital services in FY17. Digital run rate has already reached US$2.9 billion in the first nine months of the year and is expected to close FY18E with ~ US$4 billion revenues.

Recent deal wins bode well

Citing the demand environment, the TCS management indicated that the retail vertical is witnessing early signs of recovery and expects it see double digit growth in FY19E. Small pockets like energy & utilities and travel are showing good growth. Although BFSI is yet to see any recovery, insurance is going steady. During the last three to four months, TCS won many multi-year deals and partnerships. It is expected it to add ~$2 billion to the company's topline in FY18-20E. This would further lead to increased revenue visibility for TCS.

Valuation & Outlook

From TCS' portfolio perspective, the retail vertical has started showing signs of a revival while digital is keeping pace with an annual run rate of ~$4 billion in FY18E. Furthermore, with early sign of demand recovery (announcement of large deal pipeline remains good), we believe TCS would be key beneficiary once the demand environment improves given its market leading position and adaptability with new age technologies such as Digital transformation, going ahead. Also, FY20E FCF yield of 4.3% and management's continuous commentary of maintaining a healthy payout ratio bodes well. Going ahead, we anticipate TCS' dollar revenues will grow 8-10% over the next two years despite near term macro headwind along with adaptability with new age technologies such as Digital Transformation and Cloud computing could throw up huge opportunities enabling it to consistently outperform the industry growth rate.

Stock Data

Particular Market Capitalization (| Crore) Total Debt (FY17) (| Crore) Cash and equivalents (| Crore) EV (| Crore) 52 week H/L Equity capital Face value

Amount 607,784.6

289.0 45,663.0 562,410.6 3255 / 2255

197.0 | 1

Key metrics

P/E EV / EBITDA P/BV RoNW (%) RoCE (%)

FY17 FY18E FY19E FY20E 23.3 23.4 21.5 19.2 17.4 17.5 15.3 13.5 6.9 6.9 5.8 4.9 29.8 29.5 27.1 25.7 38.0 37.9 34.9 33.2

Financial Highlights

| Crore FY17 FY18E FY19E FY20E Net Sales 117,966 122,017 133,990 146,205 EBITDA 32,311 32,212 35,775 39,329 Net Profit 26,289 25,365 27,648 30,873 EPS (|) 133.4 132.5 144.4 161.3

March 6, 2018

ICICI Securities Ltd. | Retail Equity Research

Source: Bloomberg, ICICI Research

3

Follow up summary of Gladiator Stocks

Summary Performance - Recommendations till date

Total Recommendations

335

Closed Recommendations

326

Positive Recommendations

248

Closed at cost

7

Strike Rate

78%

Open Yield on Positive recommendations Yield on Negative recommendations

9 19.0% -8.0%

MOMENTUM PICK

ICICI Securities ? Retail Equity Research

March 6, 2018

ICICI Securities Ltd. | Retail Equity Research

4

Momentum Picks open recommendations

Date

Stock

14-Feb-18

NCC

20-Feb-18

Prism Cement

26-Feb-18

Ipca Labs

All the recommendations are in Cash segment

Strategy Buy Buy Buy

Recommendation Price 124.00-128.00 120.00-123.00 670.00-682.00

Target 147.00 142.00 775.00

Stoploss 115.00 114.00 621.00

Time Frame 30 Days 30 Days 30 Days

MOMENTUM PICK

ICICI Securities ? Retail Equity Research

March 6, 2018

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ICICI Securities Ltd. | Retail Equity Research

5

Stock on the Move open recommendations

Date

Scrip Name

27-Feb-18

Mahindra CIE Automotive

All the recommendations are in Cash segment

Strategy Buy

Recommendation Price 233-238

Target 270.00

Stoploss 216.00

Time Frame 3 Month

MOMENTUM PICK

ICICI Securities ? Retail Equity Research

March 6, 2018

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ICICI Securities Ltd. | Retail Equity Research

6

Price history of last three years of the short term recommendations

TCS Ltd

MOMENTUM PICK

ICICI Securities ? Retail Equity Research

March 6, 2018

ICICI Securities Ltd. | Retail Equity Research

7

MOMENTUM PICK

Notes......

? It is recommended to enter in a staggered manner within the prescribed range provided in the report ? Once the recommendation is executed, it is advisable to keep strict stop loss as provided in the

report on closing basis ? The recommendations are valid for six months and in case we intend to carry forward the position, it

will be communicated through separate mail

Trading portfolio allocation ? It is recommended to spread out the trading corpus in a proportionate manner between the various

technical research products ? Please avoid allocating the entire trading corpus to a single stock or a single product segment ? Within each product segment it is advisable to allocate equal amount to each recommendation ? For example: The `Daily Calls' product carries 3 to 4 intraday recommendations. It is advisable to

allocate equal amount to each recommendation

ICICI Securities ? Retail Equity Research

March 6, 2018

ICICI Securities Ltd. | Retail Equity Research

8

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