NBFCs, oil & gas & corp banks are big on Birla Sun Life's list -:- Equity Research

Despite global events like Brexit, Indian markets will not see any big headwinds as monsoons have picked up and GST Bill stands a big chance of getting passed and liquidity in the system is much higher, said Mahesh Patil, Co-CIO at Birla Sun Life AMC. Even with the oil and gas space having lesser stock value, he maintained these companies have delivered and have shown improvement in refining margins and volume growth has spiked, too. "The valuations in oil and gas sector remain attractive in high single-digits," he said. With huge scope of opportunities in NBFCs, Patil added that this lending space is growing at 40 percent and expects earnings growth in NBFCs to be good. He is also positive on corporate banks. He said: "They have gone under recovery and the clean-up process and  we shall not see a further deterioration in their asset quality, but the earnings growth will take time to bounce back." Below is the verbatim transcript of Mahesh Patil's interview to Anuj Singhal and Sonia Shenoy on CNBC-TV18. Sonia: Great time to be buying into the market now but do you get a sense that there are more upsides in store? A: One, the big events are behind us, Brexit is behind us. On the global front while one would still be a cautious because the full impact of Brexit and what the repercussion would be is something which is still unknown. To that extent there could still be some shocks from the global side. However, there is enough liquidity around globally and central banks willing to pump in more money, so given that the market should remain pretty steady. On the domestic things we don’t see any big headwinds at least in the near-term and we have seen earning season, which was good, some mild recovery, monsoons have picked up, goods and service tax (GST) looks like it will go through in this parliament session, at least there is a good chance of that happening. So given all these factors while the markets valuations are slightly on the higher side, the liquidity which is around our view has been that you should see markets scaling newer highs. However, one should not rule out any kind of mild corrections along the way on the back of global factors.