Neelkanth Mishra, Credit Suisse says while India remains among the fastest nominal GDP and earnings growth economies, global weakness could be an overhang.
Despite rich valuations, he stays overweight on consumption and underweight on financials.
Mishra has an outperform rating on Tech Mahindra, HUL, UltraTech Cement and Tata Motors. He recommends trimming positions in SBI and Bharti Airtel.
Meanwhile, Mahesh Nandurkar, CLSA says looking at the consensus earnings trend over the last six years, considerable investor anxiety exists over FY17 earnings forecasts.
While FY17 earnings will likely get downgraded, earnings growth should still be near 15 percent, which would be far superior than the 7 percent average earnings growth seen over the past five years, he feels.
Nandurkar believes earnings recovery in FY17 should be driven by improved revenue growth as the economic recovery becomes more visible, operating leverage leads to margin improvement and most importantly, the base effect.
"Base effect-led earnings growth improvement should be visible from H2FY16 itself, with pharma, auto, cement, Reliance Industries, leading the trend, he says.
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