The bout of market volatility in the first quarter of 2015 is unlikely to subside in the second quarter, which is expected to be news-heavy, says Morgan Stanley.
Expect government spending to rise, at least one rate cut if not two, and earnings to be better than in the previous quarter.
Progress on land bill and the national goods and services tax bill also on watch in Q2.
The bank adds the government has budgeted doubling of divestments, bunching of supply is a risk to short-term equity prices.
MSCI India trading at 17.5x of 1-year forward earnings compared with 12.5 times for MSCI Asia Pacific ex Japan index.