Samvat 2072 had its share of volatility for domestic equity markets where initial few months were marked by sharp selling while post Budget\u00a0bulls took charge driving market all the way to within touching distance of all-time high. Indian equities seem to be on a cusp of new growth trajectory enabled by several policy measures being taken and implemented be it coal block allocation, spectrum auction for telecoms, deregulation of petrol and diesel prices, gas price reform, FDI in Insurance & Defence sectors, reduction in Repo rate, 7th Pay Commission Roll out, passage of GST Bill among few others. Monsoons have been near normal which is likely to boost agriculture-dependent rural income. Better operating efficiencies, higher capacity utilisation, slow pick up in pricing power as demand improves aided by higher disposable income will translate to higher ROE's of corporate India. Motilal Oswal believes earnings growth to pick up momentum from 2QFY17 onwards. Though the market stands at a gain of over 25 per cent 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 16.9 times. Market-cap-to-GDP ratio of 75 per cent (FY17E GDP) is below the long-period average of 78 per cent. Valuations look attractive as Sensex EPS to grow at 17 per cent CAGR over FY16-18 as compared to 6 per cent CAGR witnessed during FY08-16. Motilal Oswal remains bullish on markets and advising investors to put money into quality stocks. Below are the preferred picks of Motilal Oswal for Samvat 2073: HDFC Bank Target Price: Rs 1450 Investment Rationale: Over the last 12 years, HDFC Bank's market share has increased significantly in retail loans, low-cost deposits and profitability, indicating the strength of its franchisee. Strong fundamentals and near-nil stress loans would enable the bank to gain market share. Further, continued strong investment in people and branches indicating management positive outlook on business. RoEs are expected to be the best amongst private banks at around 20 per cent. LIC Housing Finance Target Price: Rs 748 Investment Rationale: LIC Housing Finance (LICHF) is the second largest housing finance company with 10 per cent mortgage market share in India. LICHF is promoted by government owned largest insurance company the LIC of India. LICHF provides individual housing loans, loan against property and loans to developers as project finance. Motilal Oswal believes LIC Housing Finance should sustain over 2 per cent incremental spreads in coming years, which would boost its earnings and RoE. The brokerage firm estimate 22 per cent EPS CAGR over FY16-19 with consistent RoEs of around 20 per cent which should drive re-rating. Shriram City Union Finance (SCUF) Target Price: Rs 3,000 Investment Rationale: The company, part of the Shriram Group, has successfully evolved as a multiproduct lender over the past decade. Core focus of the company is towards small enterprise loans where it has market share of over 40 per cent (Source: Frost & Sullivan). It has over 1000 branches of which around 80 per cent is in underpenetrated semi-urban India. SCUF is tapping aggressively into the vast potential of those small enterprises (54% loan mix) who find it difficult to deal with scrupulous money lenders on one hand and highly organised banks on the other. It has suuceessfully tried to bridge this gap. Motilal Oswal believes that SCUF's deserves to trade at a premium over other asset financiers, owing to high structural loan growth, better earnings visibility, lower cyclicality and superior asset quality. Bharat Electronics Target Price: Rs 1,450 Investment Rationale: Bharat Electronics enjoys a robust order book - to - sales position of over 4.6 times. Key orders like Akash missile system weapon locating radar, tactical communication system, mobile cellular communication system, electronic warfare systems, advanced composite communication system and commander TI sights are likely to be finalised in coming months which would further strengthen the order book. Amara Raja Batteries Target Price: Rs 1257 Investment Rationale: The company is India's second-largest lead-acid battery manufacturer (next to market leader EXID), with market leadership in telecom and UPS segments. It is reckoned as one of the pioneers in VRLA (valve regulated lead acid) batteries. Johnson Control USA (JC) is an equal partner and acquired 26 per cent equity in Amara Raja Batteries in 1997. Stable competitive environment, significant FCF generation (around Rs 260 crore over FY16-18) and stable RoE of 25 per cent -coupled with potential shift from unorganised to organised players when GST rolls out is to sustain high growth trajectory.