Expect market to widen; pharma, consumer sector, HFCs to do well, says Macquarie's Sandeep Bhatia

“I would not only then expect the consumer sector or the pharmaceutical sector but much more wider participation in the next 12-18 months. The midcap and the small cap should come back. India is getting good things in getting production-linked incentive (PLI) coming, manufacturing has to revive.”

India needs a sustained, wide employment growth and gross domestic product (GDP) growth to come through for a long a period of time, Bhatia said.

The mood is very positive for markets, India has started on the recovery path and the unlock process is progressing well.

“I think India is in a very good position right now to get flows from across the globe,” he said.

Bhatia believes high-quality housing finance companies (HFCs) will continue to outperform.

“High-quality HFCs will do well. There is increase in transactions, in places like Mumbai there is pick up in activities. HFCs will definitely see improvement.”

Auto ancillary looks promising from a two-five years point of view, he said.

“Autos and auto components is a story which will continue to motor on. For the next two-five years the auto component story looks very strong,” Bhatia said. He also likes cement and metals.

On real estate sector, he said, “The real estate sector is definitely going to see a rebound, the HFCs are actually a better way of playing this.”

Bhatia expects earnings upside to continue in India for the next 2-3 years.

“For the first time we are seeing an earnings upgrade cycle for the first time across the board in India, more importantly that should continue for the next 2-3 years. If that happens then entire widening and broadening of the market which I am hoping for, will definitely come through,” he said.