Birlasoft, ICICI Bank among Edelweiss’ top Diwali stock picks

Edelweiss’ top stock picks for Diwali –

Birlasoft: Better deal signings, focus on niche verticals, top client growth and increased efficiency due to cutting of tail are responsible for improved profitability, the brokerage said. 

Brigade Ent: Edelweiss believes Brigade is best play on revival in residential market and would continue to maintain its market share given its asset light model, strong Brand and execution track record.

ICICI Bank: In terms of valuation, ICICI is trading at discount over large peers such as Kotak and HDFC Bank. “The valuation gap ought to close, leading to an upside of 22-25% CAGR in the share price over the next two years,” the note stated.

HFFC: The broker believes Home First Finance Company is well placed to capitalize on the high growth yet under penetrated affordable housing market.

Indo Count: With multiple industry tailwinds such as robust US import demand, ‘China plus one’ strategy playing out, continuation of export incentives in addition to attractive valuations, Edelweiss continues to prefer IndoCount in textiles space.

IndusInd Bank: “The stock is currently trading at a discount to the 4 largest private banks. We believe that it has the potential to trade at 2.2xP/ABV, implying 30-35% returns over the next 2 years.”

Infosys: Edelweiss expects Revenue/EBIT/PAT to grow 40%/41%/42% over FY21-FY23E. It believes that margins will remain resilient owing to operating leverage, higher offshoring and elevated utilization.

Inox Leisure: ILL is well placed to capitalise strong pent-up demand as vast majority of Indians would be vaccinated. Further, ILL is expected to add screens aggressively post normalisation, which should aid revenue growth.

Max Health: “We believe MHI is the best play in the Indian hospital space. Its increased bed capacity at lower cost will not only boost topline but also generate higher RoCE.”

Mindtree: The NxT acquisition will allow Mindtree to build deep domain expertise and positioning them as one of the leading partners for leveraging data and analytics.

The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.