Brokerage firms recommend stocks from mid-cap and small-cap space over blue-chips

Investors looking for steady stock picks in uncertain times may scour the list of recommendations by Edelweiss, ICICI Securities and Angel Broking. Most of their preferred picks are from the mid- and small-cap space as blue-chip stocks languish on account of FII selling.

Angel Broking has recommended a few stocks in sectors such as auto and IT based on earnings growth visibility. With falling rates and huge underpenetration, they believe retail finance companies, especially those focused on housing finance, are likely to perform well.

ICICI Securities said the benefi t of lower commodity prices would result to margin expansion for some companies. Though a rampup in earnings would take time, profi tability would be aided by lower input costs and declining interest rates.

ICICI Securities expects sectors like auto, cement and capital goods to benefi t from this strong operating and fi nancial leverage, while the rupee’s depreciation affi rm positivity on IT and pharma sectors. ICICI continues to maintain negative bias on metals, infra and real estate.

Edelweiss has selected its list of nine mid-cap stocks based on growth potential, corporate governance, management credentials, earnings visibility, leadership position, consistency and sustainability of earnings growth. The brokerage, however, has not given its price targets for its picks.