"We see a lot of visibility for India's tech sector ... the growth prospects are extremely exciting right now. India still accounts for just over a one percent of the global software services market. So the potential is fantastic," Desai told Reuters Television. Desai said India was strong in the information technology sector and a structural change in the Morgan Stanley Capital International (MSCI) indices with the inclusion of technology sector would boost prospects for the sector.

"Technology for the first time has come in as an index in the emerging market index and India enjoys a fair amount of weightage in that, just over 10 percent. That should attract a lot of money into the Indian tech sector," he said. Desai said strong economic growth will boost earnings of cyclicals, and aluminium, chemicals and cement stocks would do well.

"Valuations are very attractive for cyclicals. Cyclicals as a group are trading at 30 percent below their five year averages, in terms of PE multiples, and that makes a very compelling story for cyclicals," he said.Desai also recommended banking stocks and said an improvement in economic activity would help loan growth and boost prospects for the sector. "We see a lot of consolidation in the banking sector. We see a benign interest rate environment and the banking sector benefiting from improvement in economic activity," he said.

Desai said good earnings prospects for the corporate sector should support higher valuations for Indian equities. "We have already seen a lot of earnings revision in the corporate sector. Analysts are raising earnings estimates that make valuations fairly attractive for India right now. The market is trading just shade under its five year average and we think it has a potential to trade above average during this cycle," he said.