16 july 2024 Punjab Khabarnama : A pre-budget survey of CEOs conducted by Moneycontrol in association with Deloitte has found that a majority of the top honchos believe that the Indian markets are moderately overvalued even as a sizeable chunk is of the view that it can be termed either stretched or fairly valued as well.
According to the survey, 55% of the CEOs find the current valuations moderately overvalued, 22% as stretched, 21% as fairly valued, and 3% as undervalued.
This assumes significance as the Indian stock markets are booming with both the benchmark indices — Sensex and Nifty – touching record highs consistently. The liquidity push from both foreign and domestic investors has ensured that the Sensex breached the 80,000 level with the broader Nifty also moving above 24,500.
Further, Nifty is currently trading at 24.80 times P/E, above the 10-year median of 23.5. Analysts expect it to trade around 18.97 times FY25 P/E, suggesting it is slightly overvalued now but undervalued long-term.Interestingly, majority of market participants are of the view that the valuations of the Indian stock market are healthy and even if slightly on the higher side, reflect the strong growth potential of the economy as well as robust earnings outlook.
“The Indian economy’s potential is sustainable in the longer term and stock market valuations look healthy but are moderately overvalued at the moment,” says Jimeet Modi, Founder & CEO, SAMCO Group.
