Axis Bank, ONGC will give great returns in next cycle: Rajat Rajgarhia, Motilal Oswal Securities

In a chat with ET Now, Rajat Rajgarhia, MD-Institutional Equities, Motilal Oswal Securities, shares some stock ideas.

ET Now: In a bull market, big money is made when both PE and earnings expand. Give me one or two stock ideas where you are confident of both an earning expansion and a PE expansion.

Rajat Rajgarhia: I will give you two large-cap names where you will see very good earnings and PE expansion. The first is of course Axis Bank. The earnings expansion is going to be quite good in an up cycle; there is immense scope for a PE expansion as well.

The second one is ONGC. You could see wonders there over the next three-four years as far as the earnings are concerned. Suddenly, it appears everything can go right for them. The valuations we have seen are always just a function of how earnings growth is.

So, I would stick to these two large-cap names. They are definitely going to be big-return stocks in this next cycle.