Stay with largecaps; metals, real estate to do well; Auto sector in the midst of negatives: Nippon India MF

On the pharma sector, he is of the view that excessive inventories have led to a rise in the prices of pharma products. The domestic branded segment is expanding and growing nicely with early double-digit growth, he said. Profits from US business for pharma companies now account for 25-30 percent of profit versus 70 percent earlier, he added.

Meanwhile, he believes that excess liquidity is driving re-rating in the equity market. He sees a shift of profit pools within sectors, which is better positioned than others. Large-cap risk-reward is more favourable currently, he said.

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“India can end up with significant lower spendings in the festive season. There could be more challenges if Indian income remains weak,” he added.