Market valuations can get further extended on expectations of reforms: Macquarie

Inderjeet Singh Bhatia of Macquarie Capital says spectacular victory for Prime Minister Narendra Modi-led BJP in the key state elections has proven that his political capital remains intact and that he is well placed to get another 5-year term in 2019.

He further says market valuations can get further extended on expectations of reforms though he believes these elections have not opened incremental room for legislative actions.

Singh recommends adding domestic cyclicals and rural exposure names like infrastructure, financials, and housing into the portfolio.

Hero Motocorp, L&T, HDFC Bank and ITC are top picks in the large cap space, he says.