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The valuation conundrum: Expensive for short term, attractive in long term

Among expectations, analysts say its important to keep an eye on earnings revision fo Sensex, Nifty

Samie Modak 

The BSE Sensex hit a record high last week and trades at 19.2 times its one-year forward earnings estimate, compared to the 10-year average of around 17 times. At these valuations, the markets look expensive and vulnerable to short-term correction. However, some analysts see long-term value and believe earnings are expected to enter a high growth cycle. “While the market appears to believe in a growth turn, it is far from pricing in a multi-year growth cycle, implying significant upside potential in the next three to five years. That said, the next few months might ...

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