India's longer term outlook is attractive and for the short term there is likely to be a consolidation phase, says Pratik Gupta, CEO & Co-Head, Kotak Institutional Equities.

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"India looks quite attractive, the longer term outlook is very good, there are very few large emerging markets in the world where you can see GDP growth north of 6 percent for the next 10-15 years and the macro outlook is also looking stable. Whether it's the current account deficit, the fiscal situation, or inflation, yes, it has gone up a little bit right now, but hopefully, this is a temporary phenomenon and it will come down. So overall top down looks fantastic," Gupta said.

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He said that Kotak Institutional Equities' global clients want to invest in India, but when it comes down to picking stocks or investing in particular sectors, issues come up as most of them complain that the valuations are quite high.

"The longer-term outlook is very attractive still. And we also remain quite positive from a long-term perspective. But the problem is that in the short term we will most likely go through a consolidation phase because of the expensive valuations, both at the broader market levels as well as the individual stocks level," he said.

However, Kotak Institutional Equities is not expecting a very large correction. "We believe there is a lot of money waiting on the sidelines, both foreign as well as local. If the market were to correct more than let's say 3-5 percent, we think a lot of money will come into the market and support," he said.

He added that equally in the short term, Kotak Instituional Equities does not see a big rally in the next few months either. "So, we think unfortunately, we are going to be stuck in this boring zone plus-minus 4-5 percent for the rest of the year," he said.

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(Edited by : C H Unnikrishnan)