With the Enam Conference underway, CNBC-TV18 finds out the mood across conference in such turbulent times from Dharmesh Mehta, managing director of institutional equities, and Srinivas Subramanian, head of investment banking at Enam Securities.

The Enam heads indicated that the Indian market will see volatile times and some small correction, depending on the global situation in the short-term. They also mentioned that any kind policy development would help the Indian markets to find value.

While Subramanian said that 2011 will be a little more wary, Mehta told that majority of hedge funds are short or underweight India even today.

Moreover, Subramanian further stated that India will have 7-7.5% GDP growth this fiscal.

Here is the edited transcript of their interview to CNBC-TV18. Also watch the accompanying video.

Q: What are you picking from all the investors because we are travelling through very trouble times? Yesterday, the Italian bond yields crossed the 7% mark as well. What are people making of the global situation now?

Mehta: People have come in India as they find the valuations very attractive. This is the right time to pick up large stakes in decent companies, which are now coming at a good price.

There is a concern on the global macro situation. So, people would not come tomorrow morning and start buying. This is the time for them to understand what is happening on the ground, and then, take a long-term decision depending on that.

Q: From the last time the conference was held till date, there has been a big slide across the Indian market. What advice will you give out? Is it a good time to spend the money that people have been sitting on? Is there a feeling that there could be further capitulation thats on its way?

Subramanian: We are clear that many of the corporate have pushed behind their capital raising plans. With the markets current condition, the capital raising plans will be pushed further into 2012. The year 2011 will be a little more wary.

Many of the good quality companies are sitting on cash and these companies are in the focus on investing and infrastructure, which requires cash. Like investors have been doing their homework to see what they can buy for long-term, corporate have also been doing their homework for a long-term strategy.

Q: What have you made of the Indian markets? With the current unstable scenario, what will be the implications for that? Are we likely to break the 4,700 range or the yearly lows in the near-term?

Mehta: In the short-term, we will have volatile times and some small correction, depending on the global situation. We will see some volatility in Indian markets because we have still not broken the trend of following the global markets.

People are waiting for some positive things to take place from the government by which they can break the entire link between global markets and India, which has been following each other since six-12 months. If such things happen, serious money will come into India.

Q: How are hedge funds positioned towards India?

Mehta: Majority of them are short or underweight India even today because India has massively underperformed the global markets this year. They arent very optimistic as on today. They will look for this kind of cues and if it happens, we will see a lot of short covering coming into the market.

Q: We havent seen any significant outflows, barring the month of September. Given the turbulent times globally, are you expecting significant outflows to take place in India?

Mehta: People have seen worse in India this year. If this was the case, then they should have exited this year itself. The inflows have been marginally positive this year, but not negative.

India has its own set of problems rather than global issues affecting them. On overall global macro perspective, India is a good place to hide. If they get the cues or policy action happening, then people prefer being defensive in India rather than facing the volatile times in Europe, US and other countries of the world.

Q: There is a fear of contagion now in the euro zone. If the contagion is limited or contained within the euro zone, could the emerging markets, especially India, escape a lot of the pain seen over there?

Mehta: Definitely, because we have already been through the pain last year without any problem at our end. The impact would not be the same, but there will be a short-term volatility.

If we get our act together, we can massively get flows versus the European or the other countries showing weakness in the economies today. Its up to India now to perform and get all the money.

Q: A lot is pinned on the kinds of policy actions. Which policy action are you hopeful for in the next few months with respect to finding value in the Indian markets. Which sectors or stocks are investors biased towards now?

Mehta: Any policy action will be a good news. Its not an expectation of what will happen, but we need something to happen. The investor will be happy to see few things like divestments, FDI in retail, mining getting through, land acquisition act, the whole corruption issues on Lokpal Bill and political problems. There are many things to happen. Even three out of five or eight happen, we will be in a good shape.

Q: Are you confident that at least three out of five or eight would happen?

Mehta: I never pre-guess on what would happen. I am not confident and going with a zero expectation. If anything happens, it will be great for me.

Q: What does the macroeconomic situation for India look like given the trade deficit numbers that came in yesterday, which were quite weak? Also rupee is at a 2.5-year low. Where does one go from here?

Subramanian: We can divide the overall scenario into three parts growth through consumption, growth through exports and growth through investment. The first one comes across very nicely. The export growth was also reasonably well until yesterday numbers came out.

In terms of the policy measures, people need to look at the influence of positive investment climate in the country. Even without that, we should look not only at about 7-7.5% GDP growth this year, but also for the next fiscal. The government has proven its policy arsenal to take it back to more than 7.5% growth levels.