Growth might recover in Banking sector: Rajan Malik, Philip Capital PCG

In a chat with ET Now, Rajan Malik, Head Equities, Private Client Group, Philip Capital PCG, shares his views about the market outlook.

ET Now: In which sector can one expect a cyclical turnaround in the expectation that growth might recover if that is your expectation for FY14?

Rajan Malik: For FY14, the jury is clearly outs between 8% to 12% earnings growth. Now there is a lot of difference, almost a 50% difference between 8% and 12% growth. If we were to grow at 12% to 14% in terms of earnings, then clearly at 5500-5600 you are fairly valued. However, this is an election year, government may not be able to push through a lot of its ideas and what it is proposing.

If that happens then earnings growth continues to remain in high single digit, then you are not very cheap at 5500-5600 in which case slightly lower levels will come in. Banking is one sector which we like and the move in the banking stocks over the last two days tells us very clearly that the market seems to agree with what we are saying.