Market valuations are attractive; buy selectively for long term: Analysts

Over the past few months, rising interest rates amid surging inflation has dented market sentiment across the globe

Puneet Wadhwa New Delhi
BSE, stock market, sensex
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The sharp correction in the Indian markets from their peak levels has made valuations attractive, said analysts, who advise buying selectively, but only from a long-term perspective.
56 of the Nifty100 stocks, according to Mahesh Nandurkar, managing director at Jefferies, now trade below the 10-year historical averages, including stocks in financial, select auto, and pharma sectors.
"Valuation (one-year forward consensus PE) has declined 25 per cent from October 2021 peak, almost matching the 33 per cent price-earnings contraction during the 2011 tightening cycle when repo rates went up by 375 basis points (bps) versus 250 bps this cycle. Consequently, valuations are in line with the 10-year average at 17.2x. Relative valuations are also better. Compared to the emerging market & Asia ex-Japan benchmark, the Nifty PE premium is at the average levels," Nandurkar wrote in a coauthored note with Abhinav Sinha.

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First Published: Mar 29 2023 | 11:22 AM IST

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