2016: a year of stock picking

Although FIIs are still significantly overweight on India within emerging markets, other emerging markets have corrected making them apparently cheap The year 2015 was marked by global events like softening crude and commodity prices as well as the end of the decade-long US Federal Reserve easy monetary policy. On the domestic front, expectations built around reforms and capital expenditure (capex) revival, had to be toned down considerably due to political logjam. Both these factors have led to a considerable cut in earnings estimates. However, most of the events are now behind us and it appears that expectations are more realistic. Valuations are reasonable at 15-16 times on financial year 2016-17 earnings.

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