India will continue to trade at a premium to EMs: Franklin's Radhakrishnan

'Equity valuations remain stretched as the gradual improvement in earnings growth is yet to justify these valuation levels', said Anand Radhakrishnan

Global brokerages have raised concerns about India’s record valuation premium to other emerging markets (EMs). Anand Radhakrishnan, managing director & chief investment officer-Emerging Markets Equity-India, Franklin Templeton, explains the reasons for India always trading at a premium. In an interview with Samie Modak, Radhakrishnan says as corporate profits improve over the coming quarters, price-to-earnings (P/E) multiples will look normal. Edited excerpts:

Concerns are being raised about India’s valuation premium to EM peers. Is it sustainable?

India has historically traded at a premium to EM peers, based on collective factors like demographic dividend, good corporate governance, and reasonable sector diversification. Additionally, recent efforts