A bubble in quality?

Companies with safe balance sheets and clean governance have benefited disproportionately from elevated stock specific risks

Illustration: Ajay Mohanty

Illustration: Ajay Mohanty

Akash Prakash New Delhi
Sunil Singhania of Abakkus Asset Manager has written an interesting piece on a bubble in quality stocks in India. Mr Singhania is a smart investor, has a good track record and is a veteran of the markets, having seen both bull and bear phases. All serious investors and students of stock market should read his piece. 

Mr Singhania basically makes the point that quality stocks in India trade at very high multiples. These multiples cannot be justified if we look at the financial performance of these  companies, or compare them with global peers. Given the high starting valuations, these companies will deliver very low to negative returns over the coming 10 years.  He, therefore, argues that investors must move out of
Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of www-business-standard-com-nalsar.knimbus.com or the Business Standard newspaper

First Published: Nov 05 2019 | 01:14 AM IST

Explore News

To read the full story, subscribe to BS Premium now, at just Rs 249/ month.

Key stories on business-standard.com are available only to BS Premium subscribers.

Register to read more on Business-Standard.com