Swiss brokerage UBS Securities remained bullish on domestic equities for 2015 while being overweight on banks and underweight on consumer staples and IT services. "We remain bullish on Indian equities for 2015. The economic growth recovery underway will likely sustain current valuations, especially as it starts manifesting in both macro and micro data points. Unlike the last three years, we expect consensus earnings growth estimates of 15 per cent plus for FY16\/FY17 to be met," UBS said in its report here. The sentiment amongst investors at the UBS India's 10th annual conference was clearly positive and interest in Indian equities was high. Though they are also hopeful, most corporates expect the positive sentiment to translate into numbers only after one or two quarters. Macro speakers were more confident on India versus other emerging markets, and there is an optimism around the ongoing reform initiatives. UBS report said it is overweight on banks and NBFCs, including HDFC Bank, Yes Bank, Shriram Transport Finance and Mahindra Finance. Among banks and NBFCs, management teams were cautiously optimistic on revival in business growth. While they believe that current demand is still weak and capex cycle revival still 1-2 quarters away, they expect growth outlook to improve gradually in the second half of FY15 and FY16. Asset financing firms are still witnessing subdued demand and meaningful recovery is likely only in FY16, the report said. It is underweight on consumer staples Hindustan Unilever, Godrej Consumer Products and Marico. UBS pointed out that in consumer sector, companies talked about an improvement in consumer sentiment and consequently in gross margins aided by lower raw material costs though real volume growth has lagged. The gap in growth rates between urban and rural markets has narrowed due to reduced rural stimulus, it said. The brokerage is also underweight on IT services sector. In power utilities and capital goods sector, the mood of corporates was largely optimistic and most of them believe that recovery is on its way, the report said. The specific issue many of investors talked about is the upcoming auction of coal blocks which, if successful, would be a strong catalyst. This would increase visibility on a critical issue. The foreign brokerage has set Nifty target for December 2015 at 9,600. "India looks well placed among emerging markets given the structural reforms being undertaken by the new government, like bringing more efficiency, total factor productivity, balance shift from public to private sector, deepening of financial markets," UBS Senior Independent Economic Advisor George Magnus said. Over the medium term, we can measure India's progress through change in education quality, infrastructure - which affect the income per head. "However, India manufacturing is lagging and may need to buck up before it's too late. The nature of manufacturing is changing (with packaging, branding becoming more important) and it may be more difficult to take advantage of now than it was for those countries which industrialised sooner," Magnus said. India may not be that susceptible to the risk of capital flows reversal as it was in the first "taper tantrum", partly because of the RBI's success with its measures.