Emerging Markets: Rajesh Cheruvu Explains India's Premium Valuation Approach
India has historically traded at a premium compared to other emerging markets (EMs) due to its large, profitable, and diverse corporate landscape. Rajesh Cheruvu, MD and CIO of LGT Wealth India, shares insights on market volatility, focusing on industrials and healthcare stocks while assessing the potential of new-age tech and FMCG sectors.
Current Market Dynamics
The Indian market has shown resilience despite global volatility. The fiscal support and a favorable growth forecast from the Reserve Bank of India contribute to a positive outlook, with projected GDP growth of 7.2% for FY25. The PMI indicates strong manufacturing performance combined with robust consumer demand.
Sector Preferences
Currently, we are overweight in industrials and healthcare sectors, while maintaining an underweight position in energy and utilities. Investor sentiment is shifting towards consumption and pharmaceutical stocks, fueled by improved rural demand and declining crude prices.
New-Age Tech Stocks and IPO Market
The rise in new-age tech stocks signifies a shift towards profitability and efficiency. The ongoing momentum in the IPO market reflects strong domestic inflows, revealing opportunities in emerging sectors like technology and renewable energy.
Valuation Compared to Other Emerging Markets
India's premium valuation over other emerging markets is attributed to its balanced corporate landscape, which includes sectors such as technology and consumer goods.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.