One could see 22 percent earnings growth in the financial year 2020, said Hiren Ved of Alchemy Capital Management, adding that the auto sector is also likely to see a recovery in the second half.
“We have seen some productivity improving reforms over the last few years and the stage is set for an earnings recovery and solid growth over 3-5 years,” said Ved, in an interview with CNBC-TV18.
“India being one of the major economies - even foreign investors would find it difficult to ignore a big market like India. So investors should take advance of this and invest in equities through various avenues,” he said, adding one must keep faith and not worry about 1-2 year returns because on a 3-year rolling basis, investors have usually made decent returns.
Talking about the current rally seen in Indian market, he said it was basically catch-up rally as while the rest of the emerging markets (EMs) were rallying, India was underperforming.
Sector-specific, he is of the view that the delayed impact of NBFC crisis is felt by the autos and others, however, he believes that slowdown in autos and consumer durables is temporary and should get reversed in the second half of the calendar year.
Selectively cement could be a good investment and the capital goods space could see some cyclical recovery in H2FY20. Although the house is not very upbeat on PSU banks, he said in the short to medium-term there could be a rally in them.