Bharat Iyer, MD, JP Morgan India believes if earnings were to return for the EMs then one could make 10-12 percent returns from them. However, he says one should not compare the EM returns with that of developed market (DM).

Rakesh Arora, Head-Research, Macquarie Capital Securities, says there is a big difference within EM countries and according to him countries that are consumers of commodities will significantly outperform countries that produce commodities. “So, our pecking order amongst EMs is China, India and then the others,”

Talking on the outperformance of India, Arora believes Indian government is on the right track and that there are many things changing -- like the way of business is done is changing, Chrony capitalism is out and all these positive initiatives will take shape in 2016 and as confidence returns to India growth story, market will get rerated. “FY17 we see rerating of market, which will drive the outperformance,” he adds.

Ridham Desai, MD, Morgan Stanley Indi: The house was and is most bullish on India. It is their number one emerging market. However, he thinks earnings in India will pick up over the next 12 months and could be a material driver but it is always tricky to forecast earnings. From his interactions with foreign investors, Desai says India continues to be the best house in bad neighborhood with a 1 and 3 to 5 year view and that there is tremendous appetite to buy India. So, whenever the market corrects, investors will come and buy even though rest of the EM world may be challenging, So, 2016 could see some recovery in earnings along with stable multiples.

Iyer on India story clearly believes risks for India are external than internal because internally, the policy environment is very robust. The global macros have been positive for India; there was very modest growth all around which resulted in lower crude prices and benign liquidity. However, if either of these were to turn then it could pose a risk to our market. Arora says, the driver for the market this year was the domestic investors and domestic mutual funds who invested in midcaps and they rallied. The year 2016 may not be different, he says, adding that one could see two dominant themes play out. One is government led infrastructure push, which will pick pace in terms of execution and second, is urban consumption. Therefore, the house would look to invest in these themes.