Equity benchmark indices have been witnessing a steady run in the past few sessions, driven by banks as well as favourable developments due to GST. With the passage of GST, the focus now moves to domestic stories, which could give good returns on the back of better business environment for such firms. Earnings could face some pressure in the fourth quarter, but in 18-24 months, it will see much stronger earnings growth. We feel one large cap stock to benefit from GST and stable taxation could be ITC.

The portfolio strategy has to be focused within India, so domestic stories are best. There are significant headwinds coming from export stories, for combination of political uncertainty coming through and also because of specific issues, regulatory issues with some sectors like  pharma may face. I would therefore focus primarily on consumption. In the midcap pharma space, we like Glenmark Pharma.

We like NBFCs as they are cheaper than the large bigger counterparts in their respective space. We are looking at private sector banks rather than public sector banks in more calibrated way.

Home improvement - Asian Paints clearly plays into that entire story. The process of building cheap homes is something which India has to do. Unfortunately, I have not seen that happening for a long period of time say for last 5-10 year period. I still think that we are grappling with the way to do it on a large scale basis in this country. If we can do it and this government can start pushing that, I hear multiple stories that have now started happening like the villagers are getting subsidized loans at very favourable terms, both in terms of tenure and in terms of the interest rates. I still have to see that happening on a country wide basis or even on a state wise basis in some region of this country. Meanwhile, Asian Paints, Voltas and Crompton Greaves Electricals could also be looked at.