Ridham Desai, MD and Co-Head Equity, Morgan Stanley, advises investors to buy on dips. He believes equities will return decent returns over the next 3-4 years.

Desai feels consumer sectors will lead the next bull market. “There are a boarder range of sectors like autos, media, education, retail, and even staples that are led by consumption. The demographic story has also moved forward in the last 5-6 years. We are now reaching a situation where the demographics are playing their role in driving growth. India has transitioned in terms of growth rate. It is quite possible now that the next high we register will be in double-digits. It won’t be 9%, it will probably be 11-12%."

On the road ahead for earnings, Desai said one will see another couple of quarters of tepid earnings. “This quarter will be marginally negative. But as we go into fourth quarter of this year, you are probably going to go back into double-digit growth.” He sees a Sensex EPS of around Rs 1,030-1,040 for FY10. "Our Sensex bull case EPS is Rs 1,130 for FY11."

source: MC