Author: Sambit Mohanty

L’Occitane International

Posted on by Sambit Mohanty

Key points from this note:

 

• We recommend accumulating the stock as it bounced back on strong volume after testing its pivot price level. We are up 26% on the name since adding it in May 2021.

 

• Rebound of sales in the U.S. and Europe, along with the successful rollout of ELEMIS in China, continues to be the key growth driver.

 

• The stock found strong support at its pivot price level after breaking out of a stage-three consolidation. We can expect strong momentum going forward as the Hong Kong market has witnessed two follow-through days in the last five trading sessions.

 

• Consensus expects double-digit revenue and EPS growth until FY23. Institutional sponsorship has steadily increased in the last few quarters

O’Neil Capital Equipment Sector Weekly

Posted on by Sambit Mohanty

We removed SMS from our Developed Markets Focus List due to technical deterioration. The stock breached support along its 50- and 100-
DMA on successive days on above average volume and is trading 20% below its 52-
week high. The fundamental story of the company remains strong as it is wellpositioned to benefit from the aging population in Japan. The reemergence of COVID

Taiwan Semiconductor Manufacturing Company

Posted on by Sambit Mohanty

Key points from this report:

 

  • Accumulate: The stock is up 6% on more than 3x volume this week. It is close to breaking out of a yearlong consolidation base (pivot: TWD 679) ahead of the announcement of its Q4 2021 results on January 13. Accumulate the stock using an aggressive entry here as it breaks above immediate resistance at TWD 638 or wait for traditional entry at TWD 679.
  • Strong fundamental ratings and rankings: EPS Rank 76, Composite Rating 93, and SMR Rating of A. The high fundamental ratings are due to strong double-digit (+24%) earnings growth in the last three years.
  • Growth accelerating in 2022: TSMC will grow at a faster pace in 2022 than in 2021, driven by foundry price hikes, the ongoing industry upgrade cycle in HPC/5G, and strong demand for cryptocurrency. Per consensus, earnings growth is expected to accelerate to more than 22% in 2022 from 14% in 2021.

Pidilite

Posted on by Sambit Mohanty

Key points from the report:

 

  • Buy Pidilite as it breaks out into new highs from a stage-one twelve-week flat base on strong price-volume action and is actionable.
  • Leadership in the adhesives segment, focus on a three-tier portfolio, and pioneer status in underpenetrated segments such as waterproofing and tile and stone solutions will drive Pidilite’s growth.
  • Solid fundamental profile: EPS Rank of 84 and SMR Rating of A backed by 20%+ pretax margin and ROE. EPS Rank is set to improve further, aided by accelerating EPS growth estimates for FY22 and FY23.
  • Technical profile remained solid throughout last year. The stock has been trading along 10-WMA support and briefly tested support at its 40-WMA in November 2021. RS line is trending upward with an RS Rating of 42 and an A/D Rating of A-.

Tube Investments

Posted on by Sambit Mohanty

Key points from this note:

 

  • We reiterate our buy recommendation on Tube Investments as it breaks out of a stage-two consolidation base.
  • The company targets moving away from the cyclical business and achieving stable revenue growth of 17% in the long term. It expects pretax margin of 12–15% in the next three to four years and 25% in the next 10 years.
  • To achieve stable revenue growth, it targets improving its existing business, transforming to an asset-light business model, and acquiring mismanaged companies in secular industries.
  • Good fundamental profile: Good EPS Rank of 93. Best-in-class SMR Rating of A.

U.S. Economic Summary

Posted on by Sambit Mohanty

Q3 GDP expanded 2.3%:
The U.S. economy grew 2.3% q/q in Q3, according to the final figure, 20bps above market expectations. This was far
below the 6.7% growth in Q2 as effects of the government stimulus continued to fade and a surge in COVID-19 cases
and global supply constraints weighted on consumption and production.

Radico Khaitan

Posted on by Sambit Mohanty

Key points from this report:

 

  • We are reiterating our buy call on Radico Khaitan as it has broken out of a stage-three consolidation on strong volume after finding support at its 50-DMA. We are up 95% on the stock since adding it on June 4.
  • RS line is trending upward with a strong RS Rating of 77 and an A/D Rating of A.
  • Strong fundamental profile: Composite Rank of 95 and SMR Rank of B. EPS Rank of 87.

Larsen and Toubro Infotech

Posted on by Sambit Mohanty

Key points from this note:

 

  • The stock is forming the right side of a stage-four cup base. It has retaken all key moving averages and trades above strong resistance at INR 7,200, providing an aggressive entry point. Buy.
  • Highly positive analyst day commentary: Management sees broad-based sustainable demand, primarily led by discretionary spend on projects that are driving business transformation and new spend areas like cybersecurity, cloud, and ESG.
  • Announced Fosfor, a new data-to-decisions product suite that enables businesses to monetize data at speed and scale. Total addressable market of $15B.

Infosys

Posted on by Sambit Mohanty

Key points from this report:

 

  • The stock is emerging from a nine-week flat consolidation base. Buy.
  • Strong Q2 FY22 print. Beat across all metrics and raised guidance. Infosys reported better-than-expected Q2 FY22 results, with revenue of INR 296B (+20.5% y/y), above estimates of INR 293.6B, and EPS of INR 12.93 (+12.98% y/y), above estimates of INR 12.48. The company now expects FY22 revenue growth of 16.5–17.5% in constant currency (up from previous guidance of 14–16%) and operating margin of 22–24% (in line with previous guidance).
  • Strong digital revenue growth. Digital revenue increased 42% y/y to INR 166B and contributed 56% of total revenue.
  • Robust growth in client wins and platform deals. As of Q2, Infosys has 1,714 (+15% y/y) active clients after adding 179 clients in the recent quarter. It has multiple million-dollar clients: 35 are in the $100M+ category, 62 in $50M+, 270 in $10M+, and 841 in the $1M+ category.