The next one and a half months, the focus will be both on earnings, elections and newer indicators thrown up by the economy. There is a scope that the markets can rally about 10% more from the current levels and that will discount at least four to five years of good economic growth without any doubt. Current Nifty PE is around 29.5. If the indices rise by about 1100-1200 points, Nifty PE will be around 32.5. Even if some stocks like ICICI Bank, Axis Bank, SBI, Tata Motors, Bharti Airtel etc, which have seen huge destruction in earnings in last two years come back to normal earnings, the PE would still be about 28.5-29 for the Nifty. If about 15% growth for three years is added, about three year forward P/E that is for 21-22 would be around 20, so that is not cheap by any standards. However the downside risk is much higher, if things go wrong. Elections can throw a hung Parliament, monsoons can play truant, earnings growth may not pick up amidst very high valuations, global events like trade war, protectionism etc could adversely impact India. So, one needs to be quite careful.