Gladiator Stocks Scrip I-Direct Code Action Target Stoploss VIP Clothing MAXWEL Buy in the range of 50-53 62.00 45.50 Lux Industries LUXIND Buy in the range of 725-740 870.00 660.00 Time Frame: 6 Months Research Analysts Dharmesh Shah dharmesh.shah@icicisecurities.com Pabitro Mukherjee pabitro.mukherjee@icicisecurities.com Nitin Kunte, CMT nitin.kunte@icicisecurities.com Vinayak Parmar vinayak.parmar@icicisecurities.com Dipesh Dagha dipesh.dagha@icicisecurities.com April 5, 2017
Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 VIP Clothing (MAXWEL): Rebounding from major support level augurs well... CMP: 53.50 Buying Range: 50-53 Target: 62.00 Stop loss: 45.50 Upside: 20% Stock Data 52 Week High / Low 74.4/42.20 50 days EMA 52 200 days EMA 55 52 Week EMA 55 Face Value ( ) 2 Market Capitallisation ( Cr.) 354 *Recommendation given on i-click to gain on April 03 2017 at 15:22 hrs Stock price vs. BSE small cap 75 70 65 60 55 50 45 40 35 140% 40% VIP Clothing Price performance in last five years 2% -26% 145% BSE Smallcap 44% -8% -60% 2012 2013 2014 2015 2016 Year Source: Bloomberg, BSE, ICICIdirect.com Research 15,000 14,000 13,000 12,000 11,000 10,000 Key technical observations The share price of VIP Clothing is emerging out of a nine months corrective phase. The prolonged correction has the underpinning characteristics of a secondary correction within the larger uptrend. In the last three months, the stock has been consolidating in the broad range of 48-56 indicating a base formation and accumulation by stronger hands ahead of the impending reversal Breakout past channel augurs well... The stock has seen a sharp up move during current week trade, resulting in a resolute breakout past the major falling channel containing the entire price action since June 2016 currently placed at 50 levels, thereby signalling a major structural turnaround in trend and offers a fresh entry opportunity. Base formation at key value area suggests accumulation by stronger hands The corrective price decline off the June 2016 high of 74 got anchored near key value area of 46-48 being the confluence of the following technical parameters: The major long term trend line support joining the lows since 2014 currently placed at 50 levels as can be seen in the adjacent chart 61.8% retracement of the preceding major up move of 2016 between 29 and 74 is also placed at 48 levels The previous major consolidation area of May-June 2016 is also placed around 48 levels The rising 200 weeks EMA, which has acted as a major support base for the stock since mid of 2014 is also placed around 46 levels Based on the above technical parameters we believe the crucial level of 46-48 is likely to act as a major support base for the stock going forward Long term time wise behaviour quantifies overall bullish price structure... The major rally in 2016 ( 29 to 74 ) occurred in just four months. The corrective decline off the June 2016 highs of 74 has already completed nine months while retracing just 61.8% of its preceding rally. Extended time wise correction and limited price correction highlights the robust price structure Momentum oscillators indicate build-up of positive momentum Among oscillators, the weekly 14 period s RSI has recently generated a bullish crossover above its nine period s average and is seen rebounding from the bull market support reading of 40 indicating strong momentum in the underlying trend and augurs well for continuance of the up move Conclusion Based on the aforementioned observations, we expect the stock to continue with its current up move and test levels of 62 in the medium term being the 61.8% retracement of the entire nine months decline from 74 to 42. 2
VIP Clothing (MAXWEL): Weekly Bar Chart 87 Breakout from a falling channel signals reversal of the corrective trend and resumption of a fresh up move 74 61.8% retracement of previous decline @ 62 42 29 Base formation at the major support area around 46-48 being the confluence of : -The long term 200 weeks EMA - The 61.8% retracement of the preceding rally ( 29-74) -The long term rising trendline support joining lows since mid 2014 12 Weekly RSI in uptrend recently generated a buy signal indicating bullish momentum Source: Bloomberg, ICICIdirect.com Research 3
Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 Lux Industries (LUXIND): Favourable risk-reward... CMP: 740.00 Buying Range: 725-740 Target: 870.00 Stop loss: 660.00 Upside: 19% Stock Data 52 Week High / Low 835.55/576 50 days EMA 694 200 days EMA 693 52 Week EMA 693 Face Value ( ) 2 Market Capitallisation ( Cr.) 1902 *Recommendation given on i-click to gain on April 03, 2017 at 15:27hrs Stock price vs. BSE Small cap 760 710 660 610 560 Price performance in last two years 6% Lux Industries BSE Smallcap 7% 7% -10% 2015 2016 Year Source: Bloomberg, BSE, ICICIdirect.com Research 15,000 14,000 13,000 12,000 11,000 10,000 Key technical observations Lux Industries, earlier known as Biswanath Hosiery Mills, is a leading Indian innerwear brand. Its products include various hosiery products for men, women and children. The stock price has remained in a secondary corrective phase since demonetisation. However, a closer assessment of historical price charts suggests that the stock is attractively poised above key value area and offers a good entry opportunity for medium term traders with a favourable riskreward setup. Basing pattern at lower band of trend channel... The stock is currently emerging out of five weeks of basing pattern formed at the lower band of rising trend channel encompassing the up move since December 2015 till date. (refer chart). After a decent correction off its high of the 2016 peak of 815 the share price anchored near key value area of 650 before entering into a base formation phase. Key support near 650 is validated as November March 2017 decline ( 815-650) equates with that of April September 2016 decline ( 725-576). The share price consolidated in the range of 650-700 for over five weeks as selling pressure receded and value buying emerged at the key support zone. The price action in last weeks trade has seen the share price resolve decisively above the base formation range indicating end of the corrective phase and resumption of uptrend. Robustness in price structure augurs well... The corrective decline during November 2016 March 2017 (815-650) carries all characteristics of a secondary corrective phase. The share price retraced its two months rally September November 2016 rally ( 576-815) by 70% over four months. The slower pace of price correction resulting in higher trough in price is a hallmark of inherent robustness in price structure and augurs well for a medium term uptrend in the stock. A correction viewed with in backdrop should, therefore, be seen as a buying opportunity. Volume expansion at support zone... The basing pattern near the lower band of the rising channel witnessed higher participation as reflected in trading volumes (twice the 20 week average volume of ~1 lakh shares). At the same time, the entire corrective phase during November 2016 March 2017 was on the back of thinner volumes indicating profit booking nature of the corrective decline. The volume expansion at the support zone after a correction highlight inherent strength in the trend and positive bias for the medium-term. Conclusion Based on aforementioned observations, we expect the stock price to enter into a sustainable uptrend and head towards target of 870 in the medium term. The projection is based on 123.6% external retracement of November 2016 March 2017 decline ( 815-650), which is placed at 879 and also coincides with higher band of the rising trend channel that encompasses the entire price action since the beginning of CY16. 4
Lux Industries (LUXIND): Weekly Bar Chart Fresh demand generation at lower band of channel augurs well 123.6% retracement of down move @ 879 815 725 651 576 Steady volume expansion at lower band of channel indicate accumulation pattern which augurs well for next up leg Source: Bloomberg, ICICIdirect.com Research 5
Strategy Follow up Open Recommendations: Date Scrip Name Rec Price Target Stoploss CMP Return till date (%) 28-Feb-17 Kajaria Ceramics 578 679 523 612 5.9% 14-Mar-17 Titan 453 548 398 484 6.8% 15-Mar-17 Kansai Nerolac 360 425 326 378 5.0% 17-Mar-17 Dabur 273 318 248 282 3.3% 20-Mar-17 IDBI 75 98 66 77 2.7% 23-Mar-17 GMDC 121 154 102 128 5.8% 28-Mar-17 Sun TV Network 780 920 715 795 1.9% 30-Mar-17 Ingersol Rand 750 920 685 778 3.7% 30-Mar-17 KSB Pump 671 784 595 715 6.6% 31-Mar-17 FM Goetze 550 680 480 577 4.9% Summary Performance - Recommendations till date Open Recommendations 10 Total Recommendations 134 Yield on Positive recommendations 19.0% Closed Recommendations 124 Yield on Negative recommendations -8.0% Positive Recommendations 89 Strike Rate 72% 6
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 7
Recommended product wise trading portfolio allocation Product Allocations Product wise Max allocation in allocation 1 Stock Number of Calls Return Objective Frontline Stocks Mid Cap Stocks Duration Daily Calls 8% 2-3% 3-4 Stocks 0.5-1% 2-3% Intraday Stocks on the Move 6% 3-5% 7-10 Per Months 7-10% 10-15% 3 Months Weekly Calls 8% 3-5% 1-2 Stocks 5-7% 7-10% 1 Week Weekly Technicals 8% 3-5% 1-2 Stocks 5-7% 7-10% 1 Week Monthly Call 15% 5% 2-3 Stocks 7-10% 10-15% 1 Month Monthly Technical 15% 2-4% 5-8 Stocks 7-10% 10-15% 1 Month Techno Funda 15% 5-10% 1-2 Stocks 10% and above 15% and above 6 Months Gladiator Stocks 15% 5-10% 1-2 Stocks 15% and above 20% and above 6 Months Cash 10% - 100% 8
Pankaj Pandey Head Research pankaj.pandey@icicisecurities.com ICICIdirect.com Research Desk, ICICI Securities Limited, 1st Floor, Akruti Trade Centre, Road No 7, MIDC Andheri (East) Mumbai 400 093 research@icicidirect.com 9
Disclaimer ANALYST CERTIFICATION We /I, Dharmesh Shah, Dipesh Dagha, Nitin Kunte, Pabitro Mukherjee, Vinayak Parmar Research Analysts, authors and the names subscribed to this report, hereby 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 compensation was, is, or will be directly or indirectly related to the specific recommendation(s) or view(s) in this report. Terms & conditions and other disclosures: ICICI Securities Limited (ICICI Securities) is a full-service, integrated investment banking and is, inter alia, engaged in the business of stock brokering and distribution of financial products. ICICI Securities Limited is a SEBI registered Research Analyst with SEBI Registration Number INH000000990.ICICI Securities is a wholly-owned subsidiary of ICICI Bank which is India s largest private sector bank and has its various subsidiaries engaged in businesses of housing finance, asset management, life insurance, general insurance, venture capital fund management, etc. ( associates ), the details in respect of which are available on www.icicibank.com ICICI Securities is one of the leading merchant bankers/ underwriters of securities and participate in virtually all securities trading markets in India. We and our associates might have investment banking and other business relationship with a significant percentage of companies covered by our Investment Research Department. ICICI Securities generally prohibits its analysts, persons reporting to analysts and their relatives from maintaining a financial interest in the securities or derivatives of any companies that the analysts cover. The information and opinions in this section have been prepared by ICICI Securities and are subject to change without any notice. The report and information contained herein is strictly confidential and meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent of ICICI Securities. While we would endeavour to update the information herein on reasonable basis, ICICI Securities is under no obligation to update or keep the information current. Also, there may be regulatory, compliance or other reasons that may prevent ICICI Securities from doing so. Nonrated securities indicate that rating on a particular security has been suspended temporarily and such suspension is in compliance with applicable regulations and/or ICICI Securities policies, in circumstances where ICICI Securities might be acting in an advisory capacity to this company, or in certain other circumstances. The research recommendations are based on information obtained from public sources and sources believed to be reliable, but no independent verification has been made nor is its accuracy or completeness guaranteed. These research recommendations and information herein is solely for informational purpose and shall not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments. ICICI Securities will not treat recipients as customers by virtue of their receiving these recommendations. Nothing in this section constitutes investment, legal, accounting and tax advice or a representation that any investment or strategy is suitable or appropriate to your specific circumstances. The securities discussed and opinions expressed herein may not be suitable for all investors, who must make their own investment decisions, based on their own investment objectives, financial positions and needs of specific recipient. This may not be taken in substitution for the exercise of independent judgment by any recipient. The recipient should independently evaluate the investment risks. The value and return on investment may vary because of changes in interest rates, foreign exchange rates or any other reason. ICICI Securities accepts no liabilities whatsoever for any loss or damage of any kind arising out of the use of these recommendations. Past performance is not necessarily a guide to future performance. Investors are advised to see Risk Disclosure Document to understand the risks associated before investing in the securities markets. Actual results may differ materially from those set forth in projections. Forward-looking statements are not predictions and may be subject to change without notice. 10
Disclaimer ICICI Securities or its associates might have managed or co-managed public offering of securities for the subject company or might have been mandated by the subject company for any other assignment in the past twelve months. ICICI Securities or its associates might have received any compensation from the companies mentioned herein during the period preceding twelve months from the date of these recommendations for services in respect of managing or co-managing public offerings, corporate finance, investment banking or merchant banking, brokerage services or other advisory service in a merger or specific transaction. ICICI Securities or its associates might have received any compensation for products or services other than investment banking or merchant banking or brokerage services from the companies mentioned herein in the past twelve months. ICICI Securities encourages independence in research report preparation and strives to minimize conflict in preparation of research report. ICICI Securities or its associates or its Analysts did not receive any compensation or other benefits from the companies mentioned in the report or third party in connection with preparation of the research report. Accordingly, neither ICICI Securities nor Research Analysts and their relatives have any material conflict of interest at the time of publication of this reports. It is confirmed that Dharmesh Shah, Dipesh Dagha, Nitin Kunte, Pabitro Mukherjee and Vinayak Parmar, Research Analysts giving these recommendations have not received any compensation from the companies mentioned herein in the preceding twelve months. Compensation of our Research Analysts is not based on any specific merchant banking, investment banking or brokerage service transactions ICICI Securities or its subsidiaries collectively or Research Analysts or their relatives do not own 1% or more of the equity securities of the company/companies mentioned herein as of the last day of the month preceding the publication of these research recommendations. Since Associates (ICICI group companies) of ICICI Securities are engaged in various financial service businesses, they might have financial interests or beneficial ownership in various companies including the subject company/companies mentioned herein. It is confirmed that Research Analysts do not serve as an officer, director or employee or advisory board member of the companies mentioned herein. ICICI Securities may have issued other reports that are inconsistent with and reach different conclusion from the information presented herein. Neither the Research Analysts nor ICICI Securities have been engaged in market making activity for the companies mentioned herein. We submit that no material disciplinary action has been taken on ICICI Securities by any Regulatory Authority impacting Equity Research Analysis activities. This report or recommendations are not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to law, regulation or which would subject ICICI Securities and affiliates to any registration or licensing requirement within such jurisdiction. The securities described herein may or may not be eligible for sale in all jurisdictions or to certain category of investors. Persons in whose possession this document may come are required to inform themselves of and to observe such restriction. 11