TOP PICKS FOR DIWALI, SAMVAT 2073 By Motilal Oswal

Strong pick-up in earnings and return to double digit growth in revenue is
crucial for markets to move up on a sustainable basis. We remain bullish on markets and advocate sticking to our QGLP philosophy for deploying money into quality stocks. Following are the list of our preferred picks for Samvat 2073.

Though the market stands at a gain of over 25% from CY16 lows, yet the
valuations are around 10 Year average on 12-month forward earnings multiple. The Sensex trades at 16.8x one year forward earnings, at its long-period average of 16.9x. Sensex P/B is at 2.6x, near its 10-year average of 2.7x. Market-cap-to-GDP ratio of 75% (FY17E GDP) is below the long-period average of 78%. Valuations look attractive as we expect Sensex EPS to grow at 17% CAGR over FY16-18 as compared to 6% CAGR witnessed during FY08-16.