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Infra spend, 7 Pay Panel +ve for mkt; like NTPC: Macquarie

Rakesh Arora, Head of Research-India at Macquarie Capital Securities is bullish on sectors like infrastructure in road and railways, consumer discretionary and pharmaceutical. He is neutral to negative on banks and IT.

Current market is a ‘buy-on-dips’, says Rakesh Arora, Head of Research-India at Macquarie Capital Securities adding that India is better placed amongst Emerging
Markets (EMs).

Arora expects Foreign Institutional Investors (FIIs) to flow-in soon. In coming days, government-led infrastructure spending, One rank, One Pension (OROP) and the Seventh Pay Commission will be closely watched by investors.

Investor sentiment is positive on urban consumption, he says even with no earnings cheer this quarter. Arora expects 8 percent earnings growth in FY16, 10 percent in FY17 and 15 percent in FY18.

Arora is bullish on sectors like infrastructure, particularly road and railways. He also likes consumer discretionary and pharmaceutical. He is neutral to negative on banks and IT. Investors need to look at companies that have shown consistent growth in a volatile market, he says.

Discussing individual stocks, he recommends better-than-peer TVS Motor , Coal India , Sadbhav Engineering  and NTPC . In banking space, he likes HDFC Bank and IndusInd in private banks and only SBI in PSUs.

Transcript to follow.

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