Indian Stocks Struggle as Valuations Face Scrutiny
Amid a broader market selloff, once-booming Indian equities are facing intense scrutiny in 2025.
Key Highlights:
* High-flying tech favorite Zomato faces a 20% plunge due to disappointing earnings.
* Real estate giant Oberoi Realty sees a 23% decline after missing profit targets.
* Valuations remain elevated, with the Nifty 50 trading at higher earnings multiples than other emerging Asian markets.
Expert Commentary:
"Valuations are a primary concern, and investors question whether they are justified by fundamentals," said Arvind Subramanian of Morningstar.
Small Cap Woes:
Small caps are particularly affected after outperforming larger peers in 2024. GE Vernova T&D India, a top performer last year, has shed 15% ahead of earnings.
Bullish Outlook Remains:
Despite the setbacks, India bulls believe in the long-term growth story. Valuations have cooled with the recent correction, bringing the Nifty 50 slightly below its five-year average.
Earnings Outlook:
However, initial results for the December quarter are not encouraging. Analyst Kunal Vora of BNP Paribas SA warns of overly optimistic earnings estimates that may require a stronger economic outlook to materialize.