BANGALORE: The strong rally in Indian markets in recent months has been fuelled by inflows from foreign institutional investors, who have pumped in $12 billion so far this year. Experts say with FII holdings in most good large-caps close to peak levels, incremental FII flows will now target quality mid-cap companies, with good earnings visibility, reports Business Standard.

Andrew Holland, chief executive of Ambit Investment Advisors, says, “As India is a domestic consumption-driven story with good fundamentals, we believe FII flows will definitely move to mid-caps and the next rung of stocks through the next few years. The shift, however, will not be broad-based."

Let’s have a look at some of the stocks that are going to be a big hit in future:

1. Cummins India

Capital goods stocks seem to return as favorites in the current market rally. The bet is that an expected economic turnaround will improve fundamentals for companies in this sector. Since most capital goods stocks have seen a re-rating of their PE multiples in the ongoing rally, Cummins India is one good pick for now.

The company manufactures engines and generator sets, operating on diesel, natural gas and dual fuel for industrial, power generation and automotive applications. Its technological prowess, strong pricing power and debt-free status are positives. Investors willing to stay put for at least two years can buy the stock. The stock trades at a reasonable 22 times its estimated earnings for 2015-16.