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Last Updated : Aug 21, 2017 11:20 AM IST | Source: CNBC-TV18

Still expect 17% earnings growth in FY18, buy Infosys at around Rs 800: Edelweiss

"We are still looking at 17 percent earnings growth in FY18," Maheshwari said.

Most global investors are worried about Indian valuations, especially after issues like US-North Korea tensions, uncertainty over White House, etc.

But it does not mean that investors lost interest in India, Nischal Maheshwari, Head-Institutional Equities, Edelweiss Securities said in an interview to CNBC-TV18, ahead of Edelweiss India Conference in Singapore and Hong Kong.

More than 100 individual funds attended its conference, where it saw good interest from them.

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Edelweiss highlighted two themes in this conference. One is government reform — GST i.e. moving to from unorganised way to organised. Second is affordable housing.

L&T Finance Holdings, DHFL, Capital First, Future Lifestyle Fashions, Redington India, Repco Home Finance, Rallis India, Max India, Brigade Enterprises, Greenply Industries, Dollar Industries, Greenlam Industries, V-Mart and Borosil Glass Works will attend this conference.

Maheshwari prefers housing finance companies over consumer finance companies.

Overall, Edelweiss is positive on consumer, consumption, private banks and auto sectors, wherein it is asking investors to put money.

June quarter was weaker than expected but Edelweiss has not cut its earnings forecast significantly, he said.

June quarter earnings growth was flat against Edelweiss' forecast of 6 percent growth.

But he expects the second half of FY18 to be better because of good monsoon and more government reforms. Earnings will be back-ended, he feels.

"We are still looking at 17 percent earnings growth in FY18," Maheshwari said.

On Infosys, he said management change, earnings growth will be a challenge for the company in the near term.

In short term, he advises avoiding the stock but at around Rs 800 level will be a good buying opportunity.

Edelweiss downgraded Infosys to hold with a target price of Rs 1,010 and also cut target multiple to 14 times FY19 EPS from 16 times earlier after Vishal Sikka resigned as CEO & MD of the company on August 18.
First Published on Aug 21, 2017 11:01 am
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