Motilal Oswal Financial Services on Monday said the house is underweight on power and utility space because of lack of earnings growth.
In an interview to Gautam Duggad, head of research, institutional equities, said banks may see short-term volatility, but that will not create a problem for the long-term opportunity.
"For 5-6 quarters, one had seen almost triple-digit earnings growth for the metals universe. But now we are entering a phase where the base is becoming adverse and stock prices have already run up meaningfully," Duggad said.
Duggad said, "So, while we are still seeing a very good spread in steel specifically on the ferrous side, one should be cautious because the best of the earnings as far as metals is concerned is behind us."
"We continue to have preference for plays that have earnings visibility for couple of years like private banks, consumption space, autos and within power, only prefer Power Grid within the model portfolio," he added.