Investments in Indian Equity and Research > Equity Investments, Fundamental Research and Sectors Review

StanChart on Indian Valuations

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resh:
Nifty 12-month forward P/E trading at 22.3x, close to its recent peak of 23x and higher than its long-term average of 16.3x. Price to book
value ratio (P/B) at 3.7x and Market cap to GDP ratio at ~122%, are significantly above long-term averages. Mid-caps trade at a 11% premium to large-caps, higher than its 10-year historical average premium of 1%.

Nifty EPS grew a robust 15% in FY21, the highest growth in a decade. Bloomberg consensus earnings growth expectations for FY22 and FY23 stands at 34.8% and 17.1% respectively. Pace of earnings revisions have turned positive over the past month.

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