On the earnings front, Morgan Stanley thinks that the market is underpricing the risk that companies presented lower full-year guidance
The downgrade comes as Morgan Stanley cuts its loan growth outlook for IDFC and cites an increase of 125 basis points in three-month commercial papers, which would make funding more expensive.
India is back on the radar with foreign brokerages like Deutsche Bank, Morgan Stanley, BNP Paribas and JP Morgan upgrading their India rating. Falling crude prices, beaten down valuations and the promise of policy action have forced global investors to revisit the Indian markets, report CNBC-TV18's Nimesh Shah and Animesh Das.