Domestic brokerage Kotak said on Monday that its expects the government to accelerate reforms in 2015 with focus on land, labour and power sector.
It added interest rates will likely decline in the coming year, led by improvement in the fiscal position and lower inflation.
However, it also said that returns may moderate to 15-20 per cent for Sensex in 2015.
The brokerage cited expensive valuations after a large re-rating in 2014 as the key reason for the moderate returns.
Kotak expects 18.3 per cent growth in net profit of the BSE-30 Index in FY2016.
Sensex was up 29.1 per cent YTD compared with a 2.4 per cent fall in MSCI-Asia Pacific index, excluding Japan.
It added government's minority status in the Rajya Sabha and likely funding gap as the key risks.
($1 = Rs 62.2000)
Copyright: Thomson Reuters 2014
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