Research house IDFC Securities expects Nifty earnings to register 15.1 percent CAGR over FY16-19 and set FY19 Nifty EPS target at Rs 579, implying 20.9 percent YoY growth.
Recent quarterly earnings (July-September) were stable to better-than-expected, which supported the market and gave investors a confidence to stay positive on India growth.
After earnings season, experts also lifted their earnings estimates and believe that there could be strong earnings revival from second half of FY18.
The Nifty50 rallied nearly 24 percent year-to-date, driven majorly by liquidity on hopes of earnings growth and Modi government reforms.
IDFC feels the asset-heavy and export oriented industries are expected do well as global economy is recovering. Consumption sector will find growth impetus from retail credit, it said.
The research house is overweight on engineering and capital goods, construction, metals & mining, oil & gas, consumer goods, automobiles, media and pharmaceuticals sectors.
IDFC's large cap top picks are SBI, ONGC, Motherson Sumi, HPCL, Hindalco, Bharat Electronics, Aurobindo Pharma and Ashok Leyland while mid-small cap top picks are Kajaria Ceramics, SpiceJet, Ashoka Buildcon and Greenply Industries.
Its top sell idea is Bajaj Auto.
Not only IDFC but other brokerage houses also remained negative on the stock, especially after September quarter earnings.
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