Moneycontrol Bureau
Ridham Desai, Morgan Stanley says industrials is the best sector to buy on declining short rates.
"Financials and consumer discretionary are other ways to play this theme. We are overweight these three sectors," he says.
"Chetan Ahya, our India economist, believes that 2015 marks the beginning of a big rate cut cycle with a cumulative rate cuts of 150 basis points. This will likely mark the start of a new earnings cycle," says Desai.
He says the brokerage expects an earnings CAGR of 24 percent from FY15-17. "In our view, the forthcoming rate cut cycle mirrors the cycle of 2000-04. Industrials, banks and consumer discretionary were the best-performing sectors in that period as well. Further, we believe that companies with high operating and financial leverage will benefit as growth recovers and interest rates fall," he adds.
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