A roller-coaster ride left those invested in Indian markets with an almost-nauseating experience as the election results threw a spinner, in fact, polar opposite to what all the exit polls had predicted. Hot ValuationsEyes on budget, monsoon, earningsThe topsy-turvy nature of Indian equities in the last few months exposes the current fragility of the stock markets. A complacency risk?Perhaps, markets investors were pinning all hopes on a favourable outcome of the Lok Sabha elections to do the heavy lifting while ignoring basic fundamentals like valuations of Indian markets, corporate earnings and, most critical, the monsoon. “This overvaluation of indices was already unsustainable, and the election results only acted as a trigger for them to correct,” he explains. Nifty valuations at 18.7 times FY26 PE still don’t offer much upside for 12 percent earnings CAGR over FY24-26.

Source: Forbes June 06, 2024 12:14 UTC