Sectors we believe have a positive outlook are Education, Infrastructure, E&C, Power and Housing Finance

Perspective note on economy & markets from Sanjay Sachdev, Chairman, ZyFin Capital

The current market valuations are at 14x to 15x forward earnings vs. the LTA of 15.8x. Depending on the reform trajectory and macro recovery, we believe markets could sustain the positive momentum in long run.

Sectors we believe have a positive outlook are Education, Infrastructure, E&C, Power and Housing Finance. With most expecting India's GDP to grow at 5.5% in FY15e and 6.5% in FY16e, we are of the view that most macro parameters will show improvement over the next 12-24 months, which will eventually lead to policy rate cuts, which again will re-rate equities.

The biggest advantage to corporate India will be faster decisions based actions by the new Government, leading to an economic recovery which in turn has already enthused investors. We are in effect moving into a new realm where the long term average of the markets will get redefined. This is because markets are a function not just of earnings but a combination of sustainable earnings along with positive sentiment and confidence. Though earnings may take time to reach the pre-2008 levels, the medium term traction will continue with the strong push by the government to reform and remove some of the impediments the economy has faced recently.

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