Angel Top Picks – January 2016

Within large caps we continue to like sectors where earnings growth continues to remain strong such as automobiles and IT. With falling rates and huge underpenetration, we believe retail finance companies, especially players focused on housing finance, are also likely to perform well. From a bottom-up perspective, we continue to like select emerging midcap companies with strong brands, entrepreneurial success and healthy growth outlook. We expect Sensex earnings to increase at a CAGR of 17% over FY2016-18 to ~`1,993. Based on our estimates our one year Sensex target works out to 31,500, implying a 24% upside from the current levels.

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