Valuation of Indian equities still remain expensive, says Credit Suisse

The brokerage likes select names in financials, chemicals, construction materials, and IT, but is cautious on consumer companies given the overly stretched valuations

The valuation for Indian equities remain expensive and some de-rating is warranted, given the general elections in April-May, said a note by foreign brokerage Credit Suisse.

The benchmark Nifty is trading at a 12-month forward price-to-earnings multiple of 17.1, versus the 10-year average of 15.3. 

Despite this, equity markets could gradually grind higher as corporate earnings are set to accelerate, says the brokerage, even as the RBI’s 25-basis-point rate cut provides further impetus to the economy. 

“The Q3 earnings so far portray good earnings momentum, which should get further fillip once the consumption stimulus, announced in the form of income