Birla Sun Life Portfolio Management Services Outlook and Strategy,
Our preferred sectors are sectors with good revenue visibility and momentum like consumer, pharma, and banks. We cannot afford to miss the infrastructure theme for 2010 as a lot of spending would build around it. Auto and real estate sectors would be very vulnerable to monetary policy and would be closely watched.
The Nifty EPS has been upped to 315 for FY11E, a 28% increase from Rs 246 in FY09. The forward based earnings have been trading at 18-21x which is no longer cheap. However, we could safely assume that we are far away from any asset bubble built up so far as the growth momentum sustains and investments are backed up by fundamental drive rather than driven by inflows.
