Yearly Technical Outlook 2022 - ICICI Direct
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Research Analysts:
Yearly Technical Outlook 2022
Dharmesh Shah
dharmesh.shah@icicisecurities.com
Nitin Kunte, CMT Ninad Tamhanekar, CMT Pabitro Mukherjee Vinayak Parmar
nitin.kunte@icicisecurities.com ninad.tamhanekar@icicisecurities.com pabitro.mukherjee@icicisecurities vinayak.parmar@icicisecurities.com
Mega bull cycle on the anvil...
Technical Outlook Nifty (17086)
Indian equities outperformed in CY21 riding a strong recovery post Covid lockdowns. In Nifty - Weekly bar chart Target @ 21000
2022
this report, we have deciphered the history of mega bull cycles over the past three 12%
Strategy –PICK
decades to construct our CY22 and beyond technical outlook. 18604
What we expect
MOMENTUM
The Indian equities are in the initial phase of a multi year structural bull market post last 8%
year’s resolute breakout above 2018 highs of 12400. Going by the history of three
decades, we expect the ongoing bull market to extend for the next few years with Support
32%
Technical
multifold gains. Our Nifty target for CY22 is 21000 based on classical chart reading and @ 15500
bottom up prognosis of Nifty constituents, wherein strong support exists at the 15500 9%
zone. While the midcap space is expected to extend its outperformance, we expect IT to 52 weeks
lead the rally supported by cyclicals like Capital goods, BFSI, Real Estate and Auto. Our 10% 35%
EMA
thesis is based on the following key observations
There have been three mega bull cycles in past 35 years, each measuring at least 2x
price wise from major breakout and lasting for three to four years time wise. We 34%
expect Nifty to head towards 24800 by CY24, based on empirical evidence 7511
* In our 2018 outlook, we had focused on mega bull trend in Indian equities, wherein we 32%
have envisaged target of at least 17600 by CY22 that has been achieved
ICICI Securities – Retail Equity Research
Ongoing bull cycle resembles the CY03-07 bull market on multiple counts:
• BSE200 index (dollar terms) breaking out of decadal consolidation similar to CY04 Techno-Funda Top Picks Time Frame: 12 Months
• Relative performance ratio of Nifty equal weight index with Nifty50 (free float
weight), which measures broad based nature of the rally, is on the cusp of Scrip I-Direct Code Market Cap Buying Range Target Upside%
reversal from multi-year downtrend, first instance since CY04 HCL Technologies HCLTEC 3,44,038 1230-1285 1,485 17%
• Multiple sectoral indices like metal, capital goods, realty have managed to resolve United Spirits UNISPI 64,249 850-910 1,080 22%
out of 10-12 year long consolidation, indicating the structural turnaround and
broad based nature of the ongoing bull cycle ABB India ABB 46,559 2160-2240 2,750 25%
Our in-house breadth indicator, which captures mega bull trends, has generated a Aditya Birla Fashion and Retail ADIFAS 25,636 265-285 360 31%
rare bullish signal only for the third time in two decades. Each of earlier two the Indian Hotels INDHOT 23,738 170-182 238 34%
signals (2004 and 2014) were followed by a multi year bull phase
SKF India SKFIND 17,995 3520-3700 4,700 29%
Relative outperformance of Midcap Universe is in mid-cycle of multi year bull phase.
We expect this outperformance to get further amplified
Jindal Stainless JINSTA 9,680 182-196 240 24%
Transport Corporation of India TRACOR 5,491 680-740 950 34%
Indian equities are expected to relatively outperform Emerging Markets as verified by
multi year breakout on relative charts Gabriel India GABIND 1,897 128-136 175 33%
Going by history, the US and Indian equities have continued their structural bull * Market cap as per BSE as on 27th December 2021
phases even in times of interest rate hikes in US starting 1993, 2004, 2015
*CY21 Performance - No. of Recommendations: 7 Strike rate: 100% Average gain: 25%
Source: Bloomberg, ICICI Direct Research
December 27, 2021 ICICI Securities Ltd. | Retail Equity Research 1
Ride the mega bull trend…
Major bull cycles over past three decades Nifty - Monthly bar chart Target for CY24
Time Price
@ 24800
Preceding No. of Rally
Instruments Target for CY22 @ 21000
Correction From To Months From To (in times)
MOMENTUM PICK
Sensex -39% Oct-88 Apr-92 43 664 4,546 7
18604
Nifty -49% Dec-03 Jan-08 50 1,818 6,357 3
Nifty -60% Dec-13 Aug-18 57 6,357 11,760 2
40%
12430
Nifty -40% Nov-20 Oct-21 11 12,430 18,604 1
Minimum -39% 43 2
In the past three decades, there 60%
were three mega bull cycles in 7511
Indian equities, each preceded by 6357 2x
minimum 40% correction and
transitory breach of long term
200-week moving average,
similar to CY20
200 weeks
ICICI Securities – Retail Equity Research
Subsequent mega bull markets EMA
extended for minimum 43
months wherein the index gained
minimum 2x after resolving out of
the previous high, thereby 49%
1818 3x 2539
creating massive opportunity for
investors with long term mindset
As per Dow theory, when the
previous high is taken out, new
major trend emerges. Taking
cognizance of history, we expect
the ongoing bull cycle from CY20
920
high of 12400 to continue over
the next few years with potential
Nifty target of ~24800 by CY24
Source: Bloomberg, BSE India, ICICI Direct Research
December 27, 2021 ICICI Securities Ltd. | Retail Equity Research Click here to go to top 2
…buy with conviction in transitory corrections as Nifty
headed for 21000 in CY22
In a secular bull market, Nifty - Monthly bar chart Target for CY22 @ 21000
secondary correction is a 12%
common phenomenon 18604
MOMENTUM PICK
Projection of 21000 for CY-22 is based on: 8%
Over the past two mega phases • Since April 2020, magnitude of each major rally has been at least 30%. In
15% Support
spanning two decades, an current scenario, 30% rally from December low of 16410 will mature at 21300
12430 @15500
average transitory correction 11171
has been to the tune of 14%. 25%
Investing in such corrections 9119 9%
and ignoring noise has been
rewarding
6357 29% 18% 7511
In a secular bull market, mean 6338 6825
reversion towards 52 weeks
offers a buying opportunity 16%
16%
31%
At current juncture, as 11%
4531
correction is behind us (from 3774
life high of 18600) investors
` 19%
ICICI Securities – Retail Equity Research
should focus on building a 18600 Key Support @ 15500
quality portfolio in staggered Nifty - Weekly bar chart as it is:
36% • 61.8%% retracement
manner from medium to long 2596
term perspective Major rallies since of last up move
2015 2252 32% (14151-18604)
April 2020
• 52 week’s EMA at
15500
35%
52 weeks
1292 34% EMA
32%
920
Source: Bloomberg, ICICI Direct Research
December 27, 2021 ICICI Securities Ltd. | Retail Equity Research Click here to go to top 3
… also validated by bottom up approach
The size of the bubble is the product of breadth and expected price performance
85
Market Performer Outperformer
MOMENTUM PICK
Bajaj
Finserv
Tech
TCS
Mahindra Tata
Stocks from Outperformer and 80 LT Steel
Bargain Buy quadrants, commanding Sun
total weightage of 60% are expected Pharma Divi's
Asian Tata
to deliver average returns in excess Laborat… Adani JSW
Paints Motors
of 25% Ports Steel
75 Titan
Breadth
BPCL
Bharti Reliance
Hindalco
Airtel HDFC
Cipla Power
Contribution 70 SBI
No. of Aggregate Projected Grid Ultratech
Category to Nifty
Stocks Weightage Avg. Returns Cement
(points)
ICICI Securities – Retail Equity Research
Outperformer 17 50 27% 9,543
65
Bargain Buy 8 10 25% 4,158 Nestle Axis ONGC
HDFC Kotak
Bank LIFE NTPC Indusind
Market Bank
16 32 16% 5,322 HUL Bank
Performer
60 Maruti Coal
Neutral 9 8 9% 1,684 India
Nifty Target 20,707
Neutral Bargain Buy
55
5% 10% 15% 20% 25% 30% 35% 40% 45%
Expected Return %
Notes:
• Y-Axis: The summation of the weekly positive candle and number of weeks closing above 52 weeks EMA in each of Nifty constituents.
• X-Axis: The expected return of the Nifty Constituents calculated on the closing price of 23rd December 2021
Source: Spider Software, nseindia.com, ICICI Direct Research
December 27, 2021 ICICI Securities Ltd. | Retail Equity Research Click here to go to top 4
Ongoing bull run resembles CY03-07
The BSE 200 index (in dollar Nifty
terms) has given a strong CY03-07
breakout from decade long
MOMENTUM PICK
consolidation. This
development is significant for
foreign investors as they are
poised to benefit. Similar
breakout was last observed in
CY04, which then led to a
strong multi year rally backed
by incremental foreign inflows
Dollex 200
In another comparison with
CY03-07, relative ratio of Nifty
Equal weight index with Nifty50
(free float based) is breaking
out of multi year down trend.
This development highlights
ICICI Securities – Retail Equity Research
broad based nature of current
bull market, similar to 2003-07
Equal Weight Nifty/ Nifty
Source: Bloomberg, ICICI Direct Research
December 27, 2021 ICICI Securities Ltd. | Retail Equity Research Click here to go to top 5
Rare bullish reading on breadth indicator signals multiyear
bull cycle
Our in-house breadth indicator Nifty 500
that measures market strength 16000
on longer degree charts, has
MOMENTUM PICK
14000 Each of these rallies were supported by rare bullish
generated a rare bullish signal crossover that unfolded in multi year bull market
(reading above 75) in CY21, 12000
only for the third time in the
last two decades 10000
Reading of 75 signifies that 8000
index has managed to post
positive close on monthly basis 6000
75% of the times during trailing 4000
12 months
2000
In the previous two instances of
CY03 and CY14, an indicator 0
reading above 75 was followed Nov-99 Nov-01 Nov-03 Nov-05 Nov-07 Nov-09 Nov-11 Nov-13 Nov-15 Nov-17 Nov-19 Nov-21
by multiyear bull cycle
ICICI Securities – Retail Equity Research
Indicator surpassing key threshold of 75
In the current context, post 100 Nifty 500 breadth
crossover, the indicator
continues to sustain exhibiting 90
strength and supports the
structural bullish stance 80
70
60
50
40
30
20
Nov-99 Nov-01 Nov-03 Nov-05 Nov-07 Nov-09 Nov-11 Nov-13 Nov-15 Nov-17 Nov-19 Nov-21
Source: Bloomberg, ICICI Direct Research
December 27, 2021 ICICI Securities Ltd. | Retail Equity Research Click here to go to top 6
Midcaps: outperformance to get amplified..
We expect relative Midcap ratio is leading the
outperformance of midcap and Mid cap Index / Nifty broader market outperformance
2.0
small cap universe to extend in
MOMENTUM PICK
the coming year going by
historical evidence.
As seen in earlier two
instances, the outperformance
cycle of Midcaps progress for a
few years post falling channel 1.5
breakout, initially led by
Midcaps and then followed by
Small caps.
Further, each cycle witnessed
ratio challenging previous cycle
high. In the current cycle, post 1.0
CY20 breakout, we are still Nov-05 Nov-07 Nov-09 Nov-11 Nov-13 Nov-15 Nov-17 Nov-19 Nov-21
ICICI Securities – Retail Equity Research
midway to challenging the
CY18 peak
Small cap Index / Nifty
1.0 Ratio is at the midway of
challenging CY18 peak
0.9
0.8
0.7
0.6
0.5
0.4
Nov-05 Nov-07 Nov-09 Nov-11 Nov-13 Nov-15 Nov-17 Nov-19 Nov-21
Source: Bloomberg, ICICI Direct Research
December 27, 2021 ICICI Securities Ltd. | Retail Equity Research Click here to go to top 7
Midcap index in sync with global peers…
Nifty 500
Historically, Indian equities
have rallied in each of bull
run in tandem with global
MOMENTUM PICK
peers exhibiting strong
positive correlation. E.g. In
CY03-07 bull cycle equity
markets globally were in
secular bull trend
Russell Midcap Index
We expect this relationship to
continue as even present bull
cycle in Indian equities post
CY20 is in sync with major
developed and Emerging
markets
It is noteworthy that similar to
multi year breakout in STOXX Europe Mid 200
ICICI Securities – Retail Equity Research
NIfty500 last year, Russell
Midcap (US), Stoxx Europe
Mid200 and Topix Mid400
have all posted a multi year
breakout
TOPIX Mid 400
Source: Bloomberg, ICICI Direct Research
December 28, 2021 ICICI Securities Ltd. | Retail Equity Research Click here to go to top 8
Indian equities to relatively outperform emerging markets
MSCI India relative to MSCI EM MSCI India Index vs MSCI Emerging Market - ratio line chart
has registered a breakout above
a five year range highlighting
MOMENTUM PICK
strength in the Indian market
over other Emerging market
peers. A similar range breakout
in CY04 & CY12 saw A breakout from multi-year range has resulted in
outperformance by MSCI India in outperformance of MSCI India in the next couple of years
the next couple of years
ICICI Securities – Retail Equity Research
MSCI India Index to MSCI Emerging market
index is breaking above five year’s range
highlighting India outperformance to continue
Source: Bloomberg, ICICI Direct Research
December 27, 2021 ICICI Securities Ltd. | Retail Equity Research Click here to go to top 9Fed rate hike not to distort longer term trend…
There has been a lot of noise 5000 Fed Rate 9
about potential rate hike in the S&P 500
US. The perceived notion is
MOMENTUM PICK
Over the past three decades, despite upsurge
that rising interest rate is 4500 8
in interest rate equities have seen decent rally
negative for equity
However, contrary to perceived
4000
wisdom, the empirical evidence 7
displays a divergence in facts.
In the last three cycles (as
3500
shown in adjoining chart), the
6
S&P 500 index has rallied
despite interest rate hike by the
3000
Federal Reserve
5
During the same phase, Indian
FED Rate
S&P 500
equities remained in a positive 2500
trend in tandem with the US
ICICI Securities – Retail Equity Research
market 4
2000
3
1500
Rate hike
during 1993
2
1000 Rate hike
during 2015
500 1
Rate hike
during 2004
0 0
Source: Bloomberg, ICICI Direct Research
December 27, 2021 ICICI Securities Ltd. | Retail Equity Research Click here to go to top 10MOMENTUM PICK
Top Picks CY22
ICICI Securities – Retail Equity Research
December 27, 2021 ICICI Securities Ltd. | Retail Equity Research Click here to go to top 11HCL Technologies(HCLTEC): Secular uptrend to bolster stock
Technical Outlook Rec. Price 1230.00-1285.00 Target 1485.00 Upside 17%
• The IT sector has been
Monthly Bar Chart Target @ 1485
MOMENTUM PICK
spearheading the ongoing bull run
and HCL Technology has been in a 1377
steady secular uptrend post its
multi year breakout in CY20 (| 618)
Breakout from multi
• Post breakout uptrend is well year consolidation 1090
defined by stronger rallies, shallow
retracements, key ingredient of 891
major bull phase. During this phase 618
incremental buying demand is
getting attracted at five month 5 month average
average, held since May 2020 and
even in recent correction
Monthly RSI sustains above its bull market trajectory (40) and generated positive cross over on monthly chart
• We expect stock price to extend its
bull trend and head towards | 1485
ICICI Securities – Retail Equity Research
as it is 138.2% external retracement
of recent correction (|1377-1090)
Time Frame: 12 Months
Fundamental Outlook
• HCL Tech is an IT service and product company catering to various segments like banking & insurance (~22% of revenues), manufacturing (~17%), technology
& services (~17%), lifesciences & healthcare (~14%)
• Geographically, the company generates ~63% revenues from Americas, ~28% from Europe and ~9% from RoW. In terms of revenue breakup, services wise,
IT services contribute 72% of the revenue,15% from ER&D while products form 13% of the revenue mix
• The company is well positioned to deliver strong growth in IT services and ER&D space due to i) improving TCV ii) broad based nature of growth across services
iii) improving client metrics and strengthening of management capabilities in Australia, Canada, France, Germany, etc
• The weakness in the P&P (product) business is behind now. It is expected to recover in the coming quarters. We remain positive on the stock
Source: Bloomberg, ICICI Direct Research
December 27, 2021 ICICI Securities Ltd. | Retail Equity Research 12United Spirits (UNISPI): Getting high, post six year ageing…
Technical Outlook Rec. Price 850.00-910.00 Target 1080.00 Upside 22%
• Liquor stocks posted a strong
Quarterly Bar Chart 6 year range breakout puts stock into higher orbit Target @ 1080
MOMENTUM PICK
recovery in CY21 leading their way
to new highs scripting turnaround 816 801
on long term charts. United Spirits’
price has resolved out of its six year
consolidation phase (| 800-450)
signalling structural turnaround and
new bull cycle ahead 438 442
• We expect the stock price to head 355
towards | 1080 as it is 161.8%
As per change of polarity concept, multi year consolidation
external retracement of entire six
breakout area of |800 is expected to act as support
year range (| 816-355)
• MACD oscillator has generated
crossover above its nine period MACD generated cross over above its long term average for first time in 5 years signaling strength
average on a quarterly time frame
ICICI Securities – Retail Equity Research
signalling strong momentum over
the medium term
Time Frame: 12 Months
Fundamental Outlook
• United Spirits (USL) is India’s leading alcoholic beverage company and subsidiary of global leader Diageo plc. It manufactures and sells premium liquor brands
such as Johnnie Walker, Black Dog, Black & White, Vat 69, Antiquity, Signature, Royal Challenge, McDowell’s No 1, Smirnoff and Captain Morgan
• Prestige and above (premium) segment comprises 67% of its revenues. It aims to grow its revenues in double digits and expects its operating margin to remain
in mid to high-teen levels in the medium term
• Better product mix and higher RoI brands are expected to drive EBITDA performance leading to double-digit return ratios & strong cash generation. Newer
distribution channels (e-commerce), portable packaging (Hipster) are expected to provide a connect with the young customer base
• With its broad portfolio and focus on placing existing brands in the upper prestige segment, along with introduction of its several iconic brands from Diageo
stable, USL is well placed to capitalise on the rapidly growing premiumisation trend in the sector. We remain positive on the long term growth prospects of the
stock
Source: Bloomberg, ICICI Direct Research
December 27, 2021 ICICI Securities Ltd. | Retail Equity Research 13ABB (ABB): Decade long range breakout spells new bull cycle…
Technical Outlook Rec. Price 2160.00-2240.00 Target 2750.00 Upside 25%
• The BSE capital good index is
Monthly Bar Chart Target @ 2750
MOMENTUM PICK
coming out of 13 year’s hibernation Decade long consolidation breakout supported by faster retracement of the last
exhibiting strength. Within capital falling segment
goods space, we remain 1495
1537
constructive on ABB as it has
already logged a breakout above
decade long consolidation and
continues to trend higher while
maintaining a higher high-low
Faster 722
• It witnessed a faster retracement of 12 Months
the last falling segment as the nine EMA Retracement
Support @ 1850
quarter decline (| 1495-722) was - Rising trendline
completely retraced in just four 368 - 12 months average
quarters 294
• We expect it to head higher Monthly RSI remain in up trend while holding above its nine periods average
ICICI Securities – Retail Equity Research
towards | 2750 as it is the
measuring implication of entire
range breakout (| 1537-294)
Time Frame: 12 Months
Fundamental Outlook
• ABB India (ABB) is an Indian subsidiary (75%) of Swedish-Swiss based global company ABB Ltd. ABB’s key business segment includes electrification products
(switchgears, solar inverters, EV chargers)(41% of revenue), robotics and motion (industrial robots, drives, motors, generators) (38% of revenues) and industrial
automation (process automation, enterprise solutions) (22% of revenue) serving customers in utilities, industry and transport & infrastructure
• ABB continues to see a recovery in certain segments and industries like datacentre, renewables, electronics, food & beverages and pharma. It continues to focus
on order win and seamless execution across projects
• Expect revenue, EBITDA to grow at CAGR of ~18.8%, 28.5%, respectively, in CY21E-23E due to strong traction in short cycle products and services
• Further penetration of automation & digitisation products and services across segments to drive long term growth. Hence, we remain long term positive on the
stock
Source: Bloomberg, ICICI Direct Research
December 27, 2021 ICICI Securities Ltd. | Retail Equity Research 14Aditya Birla Fashion & Retail (ADIFAS): Changing orbit…
Technical Outlook Rec. Price 265.00-285.00 Target 360.00 Upside 31%
• The stock has recently generated a Target @ 360
Monthly Bar Chart Breakout above six years range backed by faster retracement of the entire
MOMENTUM PICK
resolute breakout above its last six
year’s range (| 258-88) as it decline signals start of a new bull phase
238 258
resolved above the long term rising
supply line joining the highs of
CY16 (| 238) and CY20 (| 258)
signalling start of a new bull phase
• It has witnessed a faster
Support @ 245
retracement of the entire 52
- Breakout area
month’s corrective decline (| 258- Faster - Last two
88) in just 18 months signalling a Retracement 88 months lows
robust price structure
• We expect the thrust from the Recent price rise and the breakout is supported by strong volume
recent breakout to lead the share
price to | 360 in coming months as Monthly RSI is seen rebounding taking support at its nine periods average
ICICI Securities – Retail Equity Research
it is 161.8% external retracement of
the entire previous major decline
CY20 (| 258-88)
Time Frame: 12 Months
Fundamental Outlook
• ABFRL combines Madura’s portfolio of leading power brands (Allen Solly, Van Heusen, Louis Philippe and Peter England) with Pantaloons’ forte of largest value
fashion retailer. The company has a robust distribution network having, 2874 brand stores, along with 342 Pantaloons stores. Madura contributes ~60% of
revenues, while Pantaloons derives 40%
• The company has charted out growth strategies to become a ~US$2.8 billion entity (| 21000 crore) by FY26E, translating to 15% CAGR in FY20-26E. It has
enhanced focus on ethnic wear segment (through its recent acquisitions). Furthermore, it has recently forayed into sports and active wear segment through
acquiring licencing rights to sell Reebok products in India
• ABFRL has aggressive store addition plans for FY22E with 60+ Pantaloons store and 400+ lifestyle brand stores. Besides, it has a target of opening 100
Pantaloons stores annually over the medium term
• ABFRL has strengthened its balance sheet through recent equity infusion with net debt declining sharply from | 2500 crore to ~| 870 crore. We believe ABFRL
with lighter balance sheet and strong bouquet of brands is well placed to accelerate the pace of store addition and revenue growth. We remain structurally
positive on the stock
Source: Bloomberg, ICICI Direct Research
December 27, 2021 ICICI Securities Ltd. | Retail Equity Research 15Indian Hotel (INDHOT): Structural turnaround…
Technical Outlook Rec. Price 170.00-182.00 Target 238.00 Upside 34%
• The hospitality sector witnessed
Quarterly Bar Chart A resolute breakout above rising supply line joining highs of the last 15
Target @ 238
MOMENTUM PICK
renewed buying interest in the last
year. Within hospitality space Indian years signals a structural turnaround
158
Hotel has remained a clear outlier 121
as it resolved out of 15 year long
rising supply line, indicating
structural turnaround that augurs 91
well for multi year up trend 70
• The breakout above the long term Support @ 145 as it is confluence of:
supply line is supported by all time 31 - The value of the rising demand line
28
high volumes of more than double - 61.8% retracement of the major up
the 10 quarter’s average volume of move (| 91-229)
23 lakh shares per quarter
Breakout supported by strong volume
• The last two month’s breather
towards the major breakout area
ICICI Securities – Retail Equity Research
provides fresh entry opportunity for Quarterly MACD has generated a buy signal
target of | 238 as it is the measuring
implication of entire range breakout
(| 158-70)
Time Frame: 12 Months
Fundamental Outlook
• Indian Hotels (IHCL) with room inventory of 19,425 rooms, is a diversified player in the hotel industry through brands such as Taj, Vivanta, SeleQtions and
Ginger. It also has a select presence in the luxury segment in the US, the UK, Africa, Sri Lanka, the UAE and Maldives through owned/managed properties
• The ongoing pandemic would likely restrict overall room supply in the industry that augurs well for branded players like Indian Hotels from a three to four year
perspective
• We expect the business to recover to 97% of pre-Covid levels with EBITDA surpassing pre-Covid levels by FY23E; margins are seen at over 24% in FY23E vs.
21% in FY20, which has the potential to further expand to 30%
• The recent equity infusion through rights issue and divestment of non-core assets would help the company become debt free going forward. Hence, we remain
positive on the stock
Source: Bloomberg, ICICI Direct Research
December 27, 2021 ICICI Securities Ltd. | Retail Equity Research 16SKF India (SKFIND) : Bearing fruits of secular uptrend…
Technical Outlook Rec. Price 3520.00-3700.00 Target 4700.00 Upside 29%
• The capital goods sector continues
Monthly Bar Chart Target @ 4700
MOMENTUM PICK
to outperform over the last few
Breakout above long term rising supply line
months after breaking above 13
signals acceleration of up move
years long consolidation. SKF India
is our top pick among midcap 2317
capital goods. It has witnessed 1969 2512
steady uptrend post its multi year 1540
breakout in June 2021 (| 2602)
• Post breakout, uptrend is well 1230
5 month average has acted as
defined by higher high-low in long strong support in the entire
term chart and stronger rallies and rally since November 2020
shallow retracements, key
ingredient of structural bull phase
• We expect the stock to resume up Price rally and breakout is supported by strong volume
move and head towards | 4700
ICICI Securities – Retail Equity Research
levels as it is the price parity of the
previous major up move (|3057-
4164) as projected from the recent
trough of | 3520 Time Frame: 12 Months
Fundamental Outlook
• SKF India is one of the leading bearing manufacturers in India known for its deep grove ball bearings and has a presence across industrial & auto segment. It has
three manufacturing facilities across India and has product portfolio that includes mounted bearings and housings, super-precision bearings, slewing bearings,
industrial and automobile seal. It has almost equal presence in OEMs and aftermarket (both 50% each) while ~95% of revenues come from sales of
manufactured goods and 5% from sales of services
• Geographically, 90% of revenues comes from domestic market and 10% from exports. Segment wise, it generates 45% revenue from auto, and 55% from
industrial manufacturing
• We expect the company to continue to make a steady improvement in financials in coming quarters due to the fact that industrial manufacturing and
automobiles sales are expected to grow. Apart from that, the company is also making strides into digital sales, which reduces sales time and enable the
company to reach wider customers and reduces counterfeit products. It is also focusing on opportunities that are available in electric 2-W segment
• We build in revenue, EBIDTA, PAT CAGR of 21.4%, 20.8%, 21%, respectively. Further, SKF boasts of a debt free balance sheet, coupled with consistent RoCE &
RoICs upwards of 20% and has maintained healthy cash flow generation and has a consistent dividend payout policy. Hence, we remain positive on the stock
Source: Bloomberg, ICICI Direct Research
December 27, 2021 ICICI Securities Ltd. | Retail Equity Research 17Jindal Stainless (JINSTA): Rising from decade long hibernation…
Technical Outlook Rec. Price 182.00-196.00 Target 240.00 Upside 25%
• The share price of Jindal Stainless
Quarterly Bar Chart Price moving above multiple year highs with elevated Target @ 240
MOMENTUM PICK
has remained resilient within the
metal stocks. It has entirely retraced buying demand at the long term rising demand line
past 10 quarter decline (|132-21) in
132
just 6 quarters and is seen
sustaining above the same,
highlighting turnaround after 105
decade long consolidation
43
• The stock has managed to hold
above upward sloping support
trend line joining lows since June 21
2020, highlighting elevated buying Faster
demand that signifies inherent Retracement
strength
Quarterly MACD in strong up trend diverging from its nine periods average
• We expect the stock to maintain its
ICICI Securities – Retail Equity Research
relative outperformance and head
towards its all-time high of CY08
around | 240 levels in the coming
year Time Frame: 12 Months
Fundamental Outlook
• Jindal Stainless (JSL) is India’s largest stainless steel manufacturer. JSL operates an integrated stainless steel plant at Jajpur, Odisha. The complex has a total
stainless steel capacity of 1.1 million tonnes per annum (MTPA). JSL has readily leveragable infrastructure for cost efficient brownfield expansion (800+ acre of
land)
• JSL’s stainless steel plant in Jajpur, Odisha is strategically located 16 km from the national highway, 30 km from the Sukinda chrome ore mines and ~110-130
km from Paradip and Dhamra ports
• JSL is augmenting is stainless steel melt capacity from 1.1 MTPA to 2.1 MTPA and also enhancing downstream capacity with 1.6x expansion of hot rolled
annealed pickled (HRAP) from 0.8 MTPA to 1.25 MTPA and 1.7x expansion of cold rolled annealed pickled (CRAP) from 0.45 MTPA to 0.75 MTPA. It is also
expanding backward integration with 1.4x expansion of ferro chrome from 0.25 MTPA to 0.35 MTPA
• For JSL, the Jajpur brownfield expansion plan will leverage ready availability of world class infrastructure at Jajpur, such as land, roads, railways, utilities, etc
Source: Bloomberg, ICICI Direct Research
December 27, 2021 ICICI Securities Ltd. | Retail Equity Research 18Transport Corporation of India (TRACOR): Elongation of rallies
signifies acceleration…
Technical Outlook Rec. Price32 680.00-740.00 Target 950.00 Upside 34%
• The logistic sector has Target @ 950
outperformed during CY21. Within Quarterly Bar Chart Five years range
MOMENTUM PICK
logistic space we remain breakout
constructive on TCI based on 388 375
following technical observations:
388
• Since CY20 lows, rallies are getting
elongated followed by shallow
correction while sustaining above 143 122
five month’s EMA, highlighting
robust price structure. In the Support @ 610 as it is :
process, it logged a resolute - 50% retracement (| 388-838)
breakout from five years range (| - November low is placed at | 614
388-122), indicating acceleration of Multi year range breakout on the back of robust volumes
upward momentum that augurs
well for extension of ongoing rally
Monthly MACD inching northward while diverging from its nine period average, indicating acceleration of upward momentum
ICICI Securities – Retail Equity Research
• We expect the stock to extend the
current rally and head towards
| 950 levels in the coming year as it
is the implied target of recent
consolidation (| 800-650) Time Frame: 12 Months
Fundamental Outlook
• TCI is a leading provider of integrated multimodal logistics and supply chain solutions. The company has over six decades of experience and moves nearly
2.5% of India's GDP by value. TCI has 9000+ trucks in operation, six owned coastal ships, 12 million square feet warehousing space and 900 offices. In FY21,
freight formed 52% of revenues while SCM and coastal shipping contributed 34% and 14%, respectively
• TCI captures higher wallet share of its customers by providing diversified range of services via a single window. The variety of services also helps TCI to ride
over volatile periods
• Debt levels are substantially down from previous D/E of 0.22 in FY21 to current 0.07 in H1FY22. Strong fundamentals (b/s, CF) together with improvement in
margins and higher asset turnover, are expected to push return ratios to 16-17% in FY23 (from 12-14% range over FY19-FY21)
• TCI has been delivering exceptional results for the last few quarters and has been the beneficiary of rising surface and ocean freight charges. With unlocking of
the economy, we expect earnings momentum to continue in the foreseeable future. We remain positive on the long term growth prospects of the stock
Source: Bloomberg, ICICI Direct Research
December 27, 2021 ICICI Securities Ltd. | Retail Equity Research 19Gabriel India (GABIND): Placed at key support
Technical Outlook Rec. Price 128.00-136.00 Target 175.00 Upside 33%
• The auto ancillary space continued
Monthly Bar Chart 222 Base formation at the lower band of the rising channel and 12 months EMA
MOMENTUM PICK
its primary up trend. Technically,
offers fresh entry opportunity with favorable risk reward set up Target
we are constructive on Gabriel
168 @ 175
India, which we expect to
outperform in the coming year
127
• The stock is currently placed near
the key support area of | 125-130
12 months 96
being the confluence of rising 12
months EMA (currently at | 130) EMA
75
and the lower band of the rising
channel in place since June 2020, Placed at the 12 months EMA and
thus offering entry opportunity with the lower band of the rising channel
favourable risk reward set up 40 in place since June 2020
• We expect the stock to resume up Monthly MACD in rising trend thus supports the positive bias
move and head higher towards
ICICI Securities – Retail Equity Research
| 175 in coming quarters as it is the
upper band of the rising channel.
Time Frame: 12 Months
Fundamental Outlook
• Gabriel India (GIL) is a global top-10 shock absorber (suspension product) manufacturer serving 2-W/3-W, PV, CV, railway and aftermarket segments. Its FY21
revenue mix was at ~67% 2-W/3-W, ~21% PV, ~12% CV & railways. As of H1FY22, GIL commands a market share of ~25% in 2-W/3-W space, ~21% in PV
and ~75% in CV & railways
• GIL’s product profile is EV proof with the company already present with EV players in 2-W/3-W space and is currently the sole supplier of suspension products
for Ola Electric
• With ~83% of revenues being derived from the OEM channel and CV space on the cusp of cyclical revival, we build in 16.3% net sales CAGR over FY21-23E.
PAT CAGR in the similar timeframe is placed at 38.2%, building in 220 bps improvement in EBITDA margins to 8.5% by FY23E. It has a healthy balance sheet
with net cash surplus of ~₹ 250 crore and trades at inexpensive valuation of ~17x P/E on FY23E EPS. We have a position view on the stock
Source: Bloomberg, ICICI Direct Research
December 27, 2021 ICICI Securities Ltd. | Retail Equity Research 20Performance Scorecard
CY21 Performance
Rec. Date Stock Recommended Rec Price (|) Target (|) % Profit/Loss Comment
MOMENTUM PICK
22-Dec-20 Can Fin Home 465 580 27.0 Target Achieved
22-Dec-20 Timken 1103 1360 23.0 Target Achieved
22-Dec-20 Relaxo 790 985 31.0 Target Achieved
22-Dec-20 Infosys 1225 1410 15.0 Target Achieved
22-Dec-20 United spirit 545 660 12.0 Booked profit at 630
22-Dec-20 Bharat Electronics 113 158 40.0 Target Achieved
22-Dec-20 Dr Lal path labs 2207 2840 28.0 Target Achieved
Yearly Technical Performance Since 2013
Year 2021 2020 2019 2018 2017 2016 2015 2014 2013
ICICI Securities – Retail Equity Research
Avg return on positive calls (in %) 25 3 18 26 28 25 33 27 23
Avg. Strike Rate 100% 14% 71% 57% 100% 50% 100% 100% 64%
No of Calls 7 7 7 8 8 8 9 9 12
*Average Strike rate over past 9 years is 73%
Click here to go to top
Source: ICICI Direct Research
December 27, 2021 ICICI Securities Ltd. | Retail Equity Research 21MOMENTUM PICK
Appendix
ICICI Securities – Retail Equity Research
December 27, 2021 ICICI Securities Ltd. | Retail Equity Research 22Magnitude of average secondary corrections over past
two decades is -14%
MOMENTUM PICK
Nifty Index: Magnitude of secondary Corrections over past two decades
Time No. of Price Correction Time No. of Price Correction
From To Months From To (% ) From To Months From To (% )
Sep-03 Sep-03 1 1431 1285 -10.20 Feb-12 May-12 4 5629 4770 -15
Oct-03 Oct-03 1 1574 1435 -8.80 Oct-12 Oct-12 1 5815 4888 -16
Jan-04 May-04 4 2015 1292 -35.90 Feb-13 Apr-13 2 6112 5477 -10
Jan-05 Jan-05 1 2120 1894 -10.70 May-13 Aug-13 4 6229 5118 -18
Mar-05 Apr-05 2 2183 1896 -13.10 Mar-15 Feb-16 12 9119 6825 -25
Oct-05 Oct-05 1 2669 2307 -13.60 Sep-16 Dec-16 4 8968 7893 -12
May-06 Jun-06 2 3774 2596 -31.20 Jan-18 Mar-18 3 11171 9952 -11
Jul-06 Jul-06 1 3209 2878 -10.30 Sep-18 Oct-18 1 11760 10005 -15
Dec-06 Dec-06 1 4047 3658 -9.60 Jun-19 Aug-19 2 12103 10637 -12
ICICI Securities – Retail Equity Research
Feb-07 Mar-07 1 4245 3554 -16.30 Apr-20 May-20 1 9889 8807 -11
Jul-07 Aug-07 1 4648 4002 -13.90 Apr-20 Apr-20 1 9889 8807 -11
Oct-07 Oct-07 1 5737 5070 -11.60 Jun-20 Jun-20 0 10328 9544 -8
Nov-07 Nov-07 1 6012 5394 -10.30 Sep-20 Sep-20 0 11794 10790 -9
Jan-09 Mar-09 2 3147 2539 -19.30 Jan-21 Jan-21 0 14753 13597 -8
Jun-09 Jul-09 2 4693 3918 -16.50 Feb-21 Apr-21 1 15431 14151 -8
Nov-09 Nov-09 2 5181 4538 -12.40 Oct-21 Dec-21 2 18604 16782 -10
Jan-10 May-10 5 5310 4675 -12.00
Average -14
Source: Bloomberg, ICICI Direct Research
December 27, 2021 ICICI Securities Ltd. | Retail Equity Research Click here to go to top 23Stock selection: Deciphering the bottom-up way…
Over the past few years, our emphasis on building a statistical model for stock selection, based on our in-house technical screeners, has provided rich dividends.
Year on year, we have strengthened our parameters to adapt to changing market dynamics. The virtues of such a statistical approach are:
MOMENTUM PICK
(a) removing individual biases in stock picking; (b) efficient screening of market internals, which helps to build a holistic bottoms-up approach;
(c) achieving more objectivity in market analysis to arrive at high probability investment ideas
Technical
Define Universe Screening Bucketing Optimisation Top Picks CY22
Step 2 1
Step 31
Selection 1
Step 1 1
Final
ICICI Securities – Retail Equity Research
116 stocks
Top Picks CY22:
170 stocks
- Outperformers: Robust - Insights on Sectoral HCL Technologies
170 stocks price structure views United Spirits
849 NSE stocks - Relative Strength, - Risk/Rewards set up ABB India
- Average daily - Structural Turnaround:
Momentum from elongated period of - Volatility Aditya Birla Fashion and Retail
volume >5k - Trend and volume - Peer comparison Indian Hotels
- Market Capital > 100 underperformance
analysis - Market Performer SKF India
Crores - Qualitative and Jindal Stainless
- Minimum 1 year price - Performance in tandem
compliance filters with benchmark Transport Corporation of India
history Gabriel India
- Bargain Buys:
Price/Time correction
done
December 27, 2021 ICICI Securities Ltd. | Retail Equity Research 24…Stock selection: Bottom up way
Market Capital Returns Returns Structural
NSE Symbol Company Name Idirect Code Outperformer Market Performer Bargain Buy
(| crore) (6M) % (12M) % turnaround
MOMENTUM PICK
Agri and Chemicals
DEEPAKNTR Deepak Nitrite DEENIT 31745 32 163.87 √
NAVINFLUOR Navin Fluo.Intl. NAVFLU 19801 17 56.46 √
PHILIPCARB Phillips Carbon PHICAR 4255 -1 47.40 √
PIIND P I Industries PIIND 44709 6 32.45 √
SRF SRF SRF 68355 65 113.93 √
TATACHEM Tata Chemicals TATCHE 22481 22 85.47 √
VINATIORGA Vinati Organics VINORG 19640 6 69.22 √
Auto and Auto ancilliary
ASAHIINDIA Asahi India Glas ASAIND 11768 49 101.92 √
ICICI Securities – Retail Equity Research
ASHOKLEY Ashok Leyland ASHLEY 36503 5 35.98 √
BALKRISIND Balkrishna Inds BALIND 41318 -3 38.12 √
ESCORTS Escorts ESCORT 24797 57 49.68 √
GABRIEL Gabriel India GABIND 1944 12 37.92 √
JKTYRE JK Tyre & Indust JKTYRE 3325 -7 85.13 √
MINDACORP Minda Corp MINCOR 4104 29 108.19 √
MINDAIND Minda Industries MININD 33922 85 208.20 √
TATAMOTORS Tata Motors TATMOT 167910 39 185.24 √
TVSMOTOR TVS Motor Co. TVSMOT 29326 0 32.77 √
* Stocks highlighted in Bold and Italics are our CY22 recommendations. Stocks are listed in Sector and Alphabetical order
Note: The list of stocks enlisted in this report is selected on the basis of certain statistical and technical models. This report recommends only 9 stocks and
other stocks mentioned are only of analysis purpose. Market Cap and past returns are as of 22nd December 2021
Source: Bloomberg, ICICI Direct Research
December 27, 2021 ICICI Securities Ltd. | Retail Equity Research 25…Stock selection: Bottom up way
Market Capital Returns Returns Structural
NSE Symbol Company Name Idirect Code Outperformer Market Performer Bargain Buy
(| crore) (6M) % (12M) % turnaround
MOMENTUM PICK
BFSI
AXISBANK Axis Bank AXIBAN 205331 -9 13.50 √
BAJAJFINSV Bajaj Finserv BAFINS 253759 31 78.39 √
BSE BSE BSE 8491 111 212.06 √
CANBK Canara Bank CANBAN 35865 30 71.61 √
FEDERALBNK Federal Bank FEDBAN 17089 -4 31.55 √
HDFC HDFC HDFC 459763 1 5.63 √
KOTAKBANK Kotak Mah. Bank KOTMAH 349588 0 -7.39 √
PEL Piramal Enterp. PIRENT 61814 6 93.94 √
SBIN St Bk of India STABAN 406828 9 77.06 √
ICICI Securities – Retail Equity Research
Capital Goods:
ABB ABB ABB 48409 31 92.67 √
ACE Action Const.Eq. ACTCON 2561 -6 64.07 √
ADORWELD Ador Welding ADOWEL 906 11 161.85 √
GRINDWELL Grindwell Norton GRINOR 19948 54 175.61 √
KABRAEXTRU Kabra Extrusion KABEXT 1142 94 301.18 √
LT Larsen & Toubro LARTOU 262845 25 48.17 √
ORIENTREF RHI Magnesita ORIREF 5812 13 42.00 √
* Stocks highlighted in Bold and Italics are our CY22 recommendations. Stocks are listed in Sector and Alphabetical order
Note: The list of stocks enlisted in this report is selected on the basis of certain statistical and technical models. This report recommends only 9 stocks and
other stocks mentioned are only of analysis purpose. Market Cap and past returns are as of 22nd December 2021
Source: Bloomberg, ICICI Direct Research
December 27, 2021 ICICI Securities Ltd. | Retail Equity Research 26…Stock selection: Bottom up way
Market Capital Returns Returns Structural
NSE Symbol Company Name Idirect Code Outperformer Market Performer Bargain Buy
(| crore) (6M) % (12M) % turnaround
MOMENTUM PICK
SANGHVIMOV Sanghvi Movers SANMOV 911 6 105.92 √
SIEMENS Siemens SIEMEN 84336 19 57.04 √
SKFINDIA SKF India SKFIND 18368 42 128.13 √
THERMAX Thermax THERMA 19962 21 90.42 √
VOLTAMP Volt.Transform. VOLTRA 1952 40 65.69 √
Consumption & Retail
ABFRL Aditya Bir. Fas. ADIFAS 25987 31 83.97 √
ASIANPAINT Asian Paints ASIPAI 314626 9 26.12 √
BAJAJELEC Bajaj Electrical BAJELE 15563 33 123.20 √
BUTTERFLY Butterfly Gan Ap BUTGAN 1848 50 123.60 √
ICICI Securities – Retail Equity Research
DIXON Dixon Technolog. DIXTEC 32123 19 116.33 √
HAVELLS Havells India HAVIND 85894 37 55.75 √
KAJARIACER Kajaria Ceramics KAJCER 19552 27 81.94 √
LAOPALA La Opala RG LAOPA 4707 56 93.81 √
MCDOWELL-N United Spirits UNISPI 65670 34 62.60 √
RELAXO Relaxo Footwear RELFOO 31107 13 57.58 √
SHOPERSTOP Shoppers Stop SHOSTO 3779 50 78.01 √
SUPREMEIND Supreme Inds. SUPIND 28303 3 35.23 √
TATACONSUM Tata Consumer TATGLO 65886 -6 24.12 √
TCNSBRANDS TCNS Clothing Co TCNCLO 4933 35 77.32 √
* Stocks highlighted in Bold and Italics are our CY22 recommendations. Stocks are listed in Sector and Alphabetical order
Note: The list of stocks enlisted in this report is selected on the basis of certain statistical and technical models. This report recommends only 9 stocks and
other stocks mentioned are only of analysis purpose. Market Cap and past returns are as of 22nd December 2021
Source: Bloomberg, ICICI Direct Research
December 27, 2021 ICICI Securities Ltd. | Retail Equity Research 27…Stock selection: Bottom up way
Idirect Market Capital Returns Returns Structural Market
NSE Symbol Company Name Outperformer Bargain Buy
Code (| crore) (6M) % (12M) % turnaround Performer
MOMENTUM PICK
TITAN Titan Company TITIND 204169 31 53.44 √
TRENT Trent TRENT 37143 22 50.95 √
Energy
HINDPETRO HPCL HINPET 40875 -5 36.66 √
TATAPOWER Tata Power Co. TATPOW 69658 80 204.26 √
Infrastructure
ADANIPORTS Adani Ports ADAPOR 147588 -3 54.24 √
BLUEDART Blue Dart Expres BLUDAR 14728 6 63.71 √
CONCOR Container Corpn. CONCOR 37435 -13 59.05 √
ICICI Securities – Retail Equity Research
JKLAKSHMI JK Lakshmi Cem. JKLAKS 6255 -8 63.58 √
KNRCON KNR Construct. KNRCON 8059 28 72.28 √
TCI Transport Corp. TRACOR 9700 78 183.00 √
TCIEXP TCI Express TCIEXP 9700 79 183.54 √
ULTRACEMCO UltraTech Cem. ULTCEM 212955 8 46.92 √
Media
NETWORK18 Netwrk.18 Media NETW18 9255 66 147.27 √
TVTODAY T.V. Today Netw. TVTNET 2541 39 104.66 √
* Stocks highlighted in Bold and Italics are our CY22 recommendations. Stocks are listed in Sector and Alphabetical order
Note: The list of stocks enlisted in this report is selected on the basis of certain statistical and technical models. This report recommends only 9 stocks and other
stocks mentioned are only of analysis purpose. Market Cap and past returns are as of 22nd December 2021
Source: Bloomberg, ICICI Direct Research
December 27, 2021 ICICI Securities Ltd. | Retail Equity Research 28…Stock selection: Bottom up way
Idirect Market Capital Returns Returns Structural Market
NSE Symbol Company Name Outperformer Bargain Buy
Code (| crore) (6M) % (12M) % turnaround Performer
MOMENTUM PICK
Metals
HINDALCO Hindalco Inds. HINDAL 104123 26 99.81 √
JSL Jindal Stain. JINSTA 9387 76 178.67 √
SAIL SAIL SAIL 46551 -11 97.20 √
TATAMETALI Tata Metaliks TATME 2610 -26 40.61 √
TATASTEEL Tata Steel TATSTE 137845 1 87.72 √
VSSL Vardhman Special VARSPE 902 4 80.87 √
Others
BALRAMCHIN Balrampur Chini BALCHI 6494 -4 89.38 √
CHAMBLFERT Chambal Fert. CHAFER 15874 24 74.35 √
INDHOTEL Indian Hotels Co INDHOT 23924 33 60.07 √
ICICI Securities – Retail Equity Research
INDIGO Interglobe Aviat INTAVI 73785 12 21.94 √
INOXLEISUR Inox Leisure INOX 4583 17 39.52 √
MHRIL Mahindra Holiday MAHHOL 3872 14 48.85 √
PRAJIND Praj Industries PRAIND 5572 -17 191.54 √
TRIVENI Triven.Engg.Ind. TRIENG 5172 20 199.86 √
VIPIND V I P Inds. VIPIND 7805 41 67.87 √
Pharmaceuticals and Healthcare:
ABBOTINDIA Abbott India ABBIND 38717 9 17.47 √
APOLLOHOSP Apollo Hospitals APOHOS 68665 47 98.29 √
CAPLIPOINT Caplin Point Lab CAPPOI 5754 14 59.21 √
* Stocks highlighted in Bold and Italics are our CY22 recommendations. Stocks are listed in Sector and Alphabetical order
Note: The list of stocks enlisted in this report is selected on the basis of certain statistical and technical models. This report recommends only 9 stocks and other
stocks mentioned are only of analysis purpose. Market Cap and past returns are as of 22nd December 2021
Source: Bloomberg, ICICI Direct Research
December 27, 2021 ICICI Securities Ltd. | Retail Equity Research 29…Stock selection: Bottom up way
Idirect Market Capital Returns Returns Structural Market
NSE Symbol Company Name Outperformer Bargain Buy
Code (| crore) (6M) % (12M) % turnaround Performer
MOMENTUM PICK
CIPLA Cipla CIPLA 71780 -7 11.91 √
DIVISLAB Divi's Lab. DIVLAB 121147 6 22.64 √
FORTIS Fortis Health. FORHEA 20973 20 79.98 √
SEQUENT Sequent Scien. SEQSCI 4021 -40 -3.02 √
PSU
BEL Bharat Electron BHAELE 49560 34 81.20 √
HAL Hind.Aeronautics HINAERON 41648 24 56.89 √
IDBI IDBI Bank IDBI 49246 19 35.50 √
IRCTC IRCTC INDRAI 67180 102 200.11 √
Real Estate
DLF DLF DLFLIM 93381 27 71.99 √
ICICI Securities – Retail Equity Research
KOLTEPATIL Kolte Patil Dev. KOLPAT 2229 32 31.76 √
MAHLIFE Mahindra Life. MAHLIF 3504 14 108.30 √
OBEROIRLTY Oberoi Realty OBEREA 30839 38 56.17 √
PHOENIXLTD Phoenix Mills PHOMIL 16523 17 31.63 √
PRESTIGE Prestige Estates PREST 18315 58 78.79 √
Technology
BSOFT Birlasoft Ltd KPITEC 13942 30 115.10 √
COFORGE Coforge NIITEC 33320 38 113.56 √
HCLTECH HCL Technologies HCLTEC 331827 25 33.81 √
INFY Infosys INFTEC 767399 21 49.50 √
* Stocks highlighted in Bold and Italics are our CY22 recommendations. Stocks are listed in Sector and Alphabetical order
Note: The list of stocks enlisted in this report is selected on the basis of certain statistical and technical models. This report recommends only 9 stocks and other
stocks mentioned are only of analysis purpose. Market Cap and past returns are as of 22nd December 2021
Source: Bloomberg, ICICI Direct Research
December 27, 2021 ICICI Securities Ltd. | Retail Equity Research 30…Stock selection: Bottom up way
Idirect Market Capital Returns Returns Structural Market
NSE Symbol Company Name Outperformer Bargain Buy
Code (| crore) (6M) % (12M) % turnaround Performer
MOMENTUM PICK
LTI L & T Infotech LTINFO 124864 73 99.44 √
MPHASIS Mphasis MPHLIM 59413 58 122.81 √
PERSISTENT Persistent Sys PERSYS 34694 76 229.65 √
TCS TCS TCS 1343033 10 26.40 √
TECHM Tech Mahindra TECMAH 161067 57 75.70 √
ZENSARTECH Zensar Tech. ZENTE 10463 55 102.27 √
Telecom
BHARTIARTL Bharti Airtel BHAAIR 376067 30 39.44 √
RELIANCE Reliance Industry RELIND 1599996 6 22.17 √
TATACOMM Tata Comm TATCOM 39749 10 38.82 √
ICICI Securities – Retail Equity Research
Textile
AMBIKCO Ambika Cotton AMBCOT 1030 56 119.76 √
GOKEX Gokaldas Exports GOKEXP 1688 97 232.97 √
KPRMILL K P R Mill Ltd KPRMIL 20939 94 245.74 √
RAYMOND Raymond RAYMON 4228 47 95.13 √
VTL Vardhman Textile VARTEX 12926 63 119.12 √
* Stocks highlighted in Bold and Italics are our CY22 recommendations. Stocks are listed in Sector and Alphabetical order
Note: The list of stocks enlisted in this report is selected on the basis of certain statistical and technical models. This report recommends only 9 stocks and other
stocks mentioned are only of analysis purpose. Market Cap and past returns are as of 22nd December 2021
Source: Bloomberg, ICICI Direct Research
December 27, 2021 ICICI Securities Ltd. | Retail Equity Research 31MOMENTUM PICK
Commodity and Currency Outlook
ICICI Securities – Retail Equity Research
December 27, 2021 ICICI Securities Ltd. | Retail Equity Research 32Gold spot ($1805): Consolidate with positive bias, test all-
time high of $2075…
Gold prices are expected to Monthly Bar Chart
consolidate with positive bias 2075
while holding above the major
MOMENTUM PICK
support area of $1650 and 1921 Shallow retracement and a higher base at
gradually head higher to test its 12 month’s average highlights positive price
all-time high of $2075 in the structure
coming year.
1676
2001-11 multifold
rally
1380
1160
ICICI Securities – Retail Equity Research
1025 Support @ 1650 as it is confluence of
the rising 12 month’s average and 50%
retracement of entire 2018-20 rally
(1160-2075)
12 Months
average
681
Source: Bloomberg, ICICI Direct Research
December 27, 2021 ICICI Securities Ltd. | Retail Equity Research 33Brent Futures ($75): Consolidation likely in range of $55-95..
Brent prices after the strong up Quarterly Bar Chart
move in the last 19 months are 147 Stiff resistance at $95 as it is the
witnessing profit booking in the previous major breakdown area of
MOMENTUM PICK
128
last two months amid CY14 and 61.8% retracement of the
overbought placement of entire decline ($147-16)
quarterly stochastic. Going
ahead, we expect Brent prices to 87
enter into a consolidation in the 94
broad range of $55-95 in the
coming year
Breakdown area of 2011- 60
14 consolidation range
36 36
ICICI Securities – Retail Equity Research
27
Confluence of multiple retracement and March
2021 low around $55-60 makes it a major
support in medium term
16
Quarterly stochastic reacting lower from the overbought territory
Source: Bloomberg, ICICI Direct Research
December 27, 2021 ICICI Securities Ltd. | Retail Equity Research 34LME Copper ($9560): On cusp of decade long
consolidation breakout signifies structural turnaround….
Quarterly Bar Chart 161.8% external
LME Copper prices are on the
Faster retracement as it retracement @ 11800
cusp of breaking above
decade long consolidation retraced 37 quarters corrective
MOMENTUM PICK
phase, which has been phase in just five quarters 10729
10179
backed by faster pace of
retracement of the entire 9000
decline, signifying a structural
turnaround 7323
We expect it to continue its
positive momentum and
head higher towards $11800
in the coming year as it is the
161.8% external retracement
of the last two quarter’s 4310 4577
breather ($10729-8766)
Key support is placed at $8400 as
ICICI Securities – Retail Equity Research
it is 38% retracement of entire
2768 rally ($4577-10729)
1318
Quarterly RSI is resolving out of multi year trendline resistance indicating positive bias
Source: Bloomberg, ICICI Direct Research
December 27, 2021 ICICI Securities Ltd. | Retail Equity Research 35LME Aluminium ($2830): Higher base formation around
all-time high likely in coming quarters…
The prices, after a stupendous Quarterly Bar Chart
rally from March 2020 to
3292
October 2021 ($1420-3180))
MOMENTUM PICK
3180
witnessed profit booking in the
last two months from near the Faster retracement as it
previous all-time high of CY09 retraced 35 quarters corrective
(3292). Going ahead, post a 2772 phase in just six quarters
sharp up move we expect a
higher base formation around its 2603
all-time high in the coming
quarters in the broader range of
$2200-3300
ICICI Securities – Retail Equity Research
1424 1420
1243 1251 Major support @ $ 2200
- 50% retracement of entire rally ($ 1420-3180)
- Lower band of the consolidation of Apr-July 2021
Source: Bloomberg, ICICI Direct Research
December 27, 2021 ICICI Securities Ltd. | Retail Equity Research 36Rupee (75): Downside capped around 78….
In the last decade, on three Quarterly Bar Chart (Inverted scale)
occasions, the rupee has
Key support
seen sharp depreciation of
MOMENTUM PICK
more than 20% as in CY08- 76.9 at 78
09, CY13-14 and CY18-20. 19 quarter
The sharp depreciation is consolidation
followed by multi year 72.2
consolidation (minimum of
11 quarters) 68.9
In the current scenario, the 63.5
rupee after depreciating
from 63.5 to 76.9 during
CY18-20, has been
consolidating in a narrow
range in the last seven
quarters. As per historical
evidence, we expect the 11 quarter 58.5
Key hurdle at 72 levels
ICICI Securities – Retail Equity Research
current consolidation to consolidation o Rising trendline joining lows since 2013
extend in the coming year o Lower band of last year’s consolidation
in the broad range of 72-78 52
placed around 72 levels
53.5
43.7
39.2
Source: Bloomberg, ICICI Direct Research
December 27, 2021 ICICI Securities Ltd. | Retail Equity Research 37Notes
• It is recommended to enter in a staggered manner within the prescribed range provided in the
report
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• The recommendations are valid for twelve months and in case we intend to carry forward or exit the
position early, it will be communicated on i-click to gain page of our website, mobile notification and
email
ICICI Securities – Retail Equity Research
December 27, 2021 ICICI Securities Ltd. | Retail Equity Research 38MOMENTUM PICK
Pankaj Pandey Head – Research pankaj.pandey@icicisecurities.com
ICICI Securities – Retail Equity Research
ICICI Direct Research Desk,
ICICI Securities Limited,
1st Floor, Akruti Trade Centre,
Road No 7, MIDC,
Andheri (East)
Mumbai – 400 093
research@icicidirect.com
December 27, 2021 ICICI Securities Ltd. | Retail Equity Research 39Disclaimer
We/I, Dharmesh Shah, Nitin Kunte, Ninad Tamhanekar, Pabitro Mukherjee, Vinayak Parmar Research Analysts, authors and the names subscribed to this report, here by certify that all of the views expressed in this
research report accurately reflect our views about the subject issuer(s) or securities. We also certify that no part of our compensations, is, or will be directly or indirectly related to the specific recommendation(s) or
view(s) in this report. We confirmed that above mentioned Analysts of this report have not received any compensation from the companies mentioned in the report in the preceding twelve months and do not serve
as an officer, director or employee of the companies mentioned in the report
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ICICI Securities – Retail Equity Research
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