Broader market valuation at all-time high even as key indices appear cheap

Valuations are steeper for foreign investors

A steady rise in market capitalisation in the past three years, coupled with stagnant corporate earnings, has pushed up the valuation of the broader market to an all-time high even as the benchmark indices like the S&P BSE Sensex and Nifty50 still look cheap compared to their previous highs.

A broader sample of large-cap, mid-cap and small-cap stocks are now trading at 30.5 times their combined net profit in the past 12 months.

This valuation is nearly 50 per cent higher than the Sensex companies’ current price-to-earnings (P/E) multiple of 30 per cent. The index companies’ valuation had peaked at