Sensex valuation falls to its lowest in over 2.5 years amid market selloff

In a year, index has risen by 6.2%, while EPS is up by 19.2%

Amid a sustained selloff in the broader market, the Indian equity market valuation has dropped to its lowest level in over 30 months. 

The BSE benchmark Sensex is now trading at a price-to-earnings (P/E) multiple of 21.9x on a 12-month trailing basis, the lowest since June 2022, when the multiple was 21.6x. Excluding that period, the current valuation marks the lowest level since June 2020. 

This decline indicates that the index’s valuation is now significantly below its historical trend. Over the past eight years, the Sensex has been cheaper only twice: During the March–June 2020 period, at the height of