Falling P/E may cap returns in 2023: Credit Suisse's Neelkanth Mishra

India’s outperformance this year has been underpinned by expanding valuations which cannot go on forever, Credit Suisse has said in its report on outlook 2023.

“Of the three drivers of market returns, which are forward earnings, global market price-to-earnings (P/E), and India’s P/E premium to global equities, earnings and premiums have dominated returns over the past year, offsetting a falling global P/E. A higher premium is possible, but unlikely,” the brokerage has said.

Credit Suisse expects domestic earnings to grow 15 per cent over the next one year and market returns could be in line with that.

“The potential 15