Prefer BFSI, industrials and realty sectors, says Edelweiss Securities' Aditya Narain

Aditya Narain, head of research of institutional equities at Edelweiss Securities, believes that there will be earnings upgrades for FY21 but remains circumspect about the extent of upgrades for FY22.

Speaking about BFSI sector, he said, "Edelweiss is running an overweight on BFSI. That is a change that we have made in our strategy over the last week or so. Our presumption is that the asset quality side has played out much better than what most people anticipated. So given liquidity, the signs of economy moving and the fact that the government is likely to push towards infrastructure, we believe that the lending cycle is going to see a little bit of an upward push."

"We have been sitting at 5-6 percent for the loan growth perspective, I think that is going to start moving to 8-10 percent levels over the next 3-6 months. The stocks have moved on the back of an easing of asset quality concerns, the opportunity for performance beyond the current lies in the fact that you should start seeing a lending cycle start. So that is the big shift that we have made in our portfolio", he said.