Large-cap shares and among them shares of financial services companies are expected to drive the market this year, said Kenneth Andrade, founder and CEO of Old Bridge Capital Management. The year 2019 will be the best for the financials after a long period of time, he added in an interview with CNBC-TV18.

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Talking about Nifty earnings, he said the state of the balance sheet has been a consolidated rather than an expansionary phase over a decade now. "However, we did have massive expansion in 2008 to 2012-13 but post that it has been consolidation."

“So the system went from an undersupply position in 2006-07-08, then huge amount of capex came up and all that capex is sitting on ground under utilised,” he said, adding that today we are close to 73 percent of utilisation on ground and this has to exhaust itself for us to go to the next capex cycle.

“Underlying earnings are driven by corporate book expansion, which has not happened since 2014-15 because of oversupply position,” said Andrade. However, once we reach the 80 percent utilisation levels, say 2020 onwards, corporate profitability will expand to a degree we haven’t seen a long time, he added.

Old Bridge Capital is quite apprehensive on the consumption cycle. “Expansion of balance sheet of retail finance companies and expansions of profitability and capacity of companies that are in consumer space has driven this economy so far. However, you had slight moderation of that in near-term and this moderation could extend itself for next one-two years,” he said.

So, it would be better to wait a bit on the consumption space, one will get better opportunities over the next couple of years. Moreover, valuations there too have to moderate considerably, he said.

With regards to aviation space, he said between Air India and Jet Airways around 30 percent of the market is up for grabs. The existing incumbents will go and fill the available capacities with a pricing advantage, he said. So essentially, capacities will get fully utilised, which will give pricing power.

“Aviation as an industry will go through massive capacity expansion,” he said.