However, the company has said that the recovery process for the Indian economy will be gradual and growth numbers will be below potential.
Global financial services major UBS on Tuesday said it is "overweight" on India, but sees limited room for a re-rating and forecast an end-2016 Nifty target of 8,200.
"We see limited room for a re-rating and forecast an end-2016 Nifty target of 8,200 based on 15 times one-year forward Private Equity (PE) multiple," it said in a research note adding that "our Global Emerging Markets (GEM)/Asia Pacific (APAC) strategists remain overweight on India.
According to the Swiss firm, there were big earning downgrades in 2015 and more are likely this year.
"Consensus FY16/FY17/FY18 forecasts of 10%/20%/18% earnings growth still appear optimistic," it said adding that cuts in 2016 may remain significant at around 8%.
On prices, it said the country's disinflationary process is likely to continue largely aided by political commitment, Reserve Bank of India (RBI) policy, below-trend growth, and balance sheet repair.
It expects Consumer Price Index (CPI) inflation in the fiscal year 2016-17 at around 4.6%.
ALSO READ: India beats China on GDP growth in 2015; may grow 7-7.5% in 2016
During 2015, the Consumer Price Inflation remained well under control hovering in the range of 3.66-5.4%, while industry chambers and some other experts are hopeful that it will keep below 6% mark in the new year -- a target set by the Reserve Bank of India.
It further said the recovery process for the Indian economy will be gradual and growth numbers will be below potential.
"While lower RBI policy rates should boost fixed investment, balance sheet repair and a difficult external environment should keep the recovery gradual and Gross Domestic Product (GDP) growth below potential," it added.
It expects the fiscal year 2016-17 growth at around 7.6% and financial year 2017-18 at 7.8%.
Meanwhile, the government recently lowered its economic growth forecast for 2015-16 to 7-7.5% from 8.1-8.5%.
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