
ETF India’s economic growth: Standing out globally
India is one of the strongest growing economies in Asia, driven by digital transformation, robust consumption and expanding exports. Find out more.
The Indian stock market has demonstrated robust growth, resulting in an above-average valuation.
It is worth noting that small-cap equities in India tend to have higher price-to-earnings (P/E) ratios compared to the MSCI India, approximately 1.3 times higher.1 We anticipate a larger upward trend for large-cap stocks in 2024, as they generally exhibit higher return on equity (ROE).2
When comparing India's equities to their own historical performance, they are currently trading close to the +1 standard deviation level of the past 10 years. Given the robust earnings visibility of Indian companies, we expect the P/E ratio to sustain.2
Source: Bloomberg, Jefferies.
The valuation of the Indian market is expected to remain within the range of the longer-term trend.
When considering the price-to-earnings (P/E) ratio alongside growth, the Indian markets are found to be fairly valued and outperform other major economies. In fact, the MSCI India's PEG ratio of 1.3x is notably better than developed markets, Korea and Mexico.
We believe while maintaining a disciplined valuation approach, it is crucial to acknowledge the strong fundamentals and macro stability that underpin India's equity valuation, paving the way for further upside potential.
We believe that India's stock market valuation is supportive because of the following reasons:
Source: ACE Equity and Jefferies. *Sample of ~600 listed companies.
Source: Bloomberg and Morgan Stanley Research.
An active fund of around 70 companies featuring quality growth characteristics in the fastest growing large country in the world.
The investment concerns the acquisition of units in an actively managed fund and not in a given underlying asset.
India is one of the strongest growing economies in Asia, driven by digital transformation, robust consumption and expanding exports. Find out more.
Asian and emerging market equities offer investors diversification benefits, with our strategies focused on ideas in unloved areas of the market. Find out more.
The Indian election was narrowly won by Narendra Modi's Bharatiya Janata Party (BJP), but what are the investment implications. Find out more.