INDIA IS NOW CHEAP - FINANCIALS AND TECH NEAR COVID LOW MULTIPLES

Research evidence excerpt

INDIA IS NOW CHEAP - FINANCIALS AND TECH NEAR COVID LOW MULTIPLES

Rupal Agarwal +65 6326 7641 rupal.agarwal@bernsteinsg.com 20 July 2026

DETAILS

Indian market has been under pressure since Q425 and in the first half of 2026, MSCI India is down -10% in dollar terms while

KR was up 112% and TW 64%. Since June, as expected, momentum trend has started seeing a reversal in turn improving

sentiment towards the anti-momentum/anti-AI market ie. India. Since April, we added more risk back in India, and we believe

there are ample opportunities for investors to look at. We discuss them below.

Indian market has de-rated to below 10yr average valuations after 3yrs; now trading at 18.6x fwd. PE ie. -0.7SD below 10yr avg.

On book-value it is still slightly above average levels at 3.3x PB. Relative to EM, valuations seem to have bottomed on 12m fwd.

PE while on PB the relative valuation has now dropped to COVID lows. Most sectors are now trading at or below 10yr average,

with Financials (-1.9SD) and Tech (-1.5SD) being the cheapest sectors trading at COVID level valuations. Healthcare, Industrial,

and Utilities are relatively expensive, trading above 10yr average, but within +1SD. Staples, Financials, Technology, Energy are

trading at COVID lows even on PB. Hence, Financials, Technology, Energy are quite attractively valued now. (Exhibit 1-Exhibit 3)

EXHIBIT 1: India valuations are now cheap both on absolute and relative basis, which trade at 18.6x on fwd PE and

at 3.3x on PB. Relative to EM, India’s PB has fallen near COVID lows

INDIA - 12m fwd. PE India relative to EM - 12m fwd. PE India relative to China - 12m fwd. PE

30x 2.0 2.2

25x 1.8 1.7 10yr avg

20x 10yr avg 1.6

10yr avg 1.2 1.4

15x

1.2 0.7

10x

1.0

0.2

5x 0.8

0x 0.6 -0.3