India Insights

Summary

• Indian equities have recorded enviable performances since the pandemic sell-off, having more than doubled since the low point in late March of 2020 and outperforming emerging markets by 50 per cent in dollar terms
• From a valuation standpoint, there is no support for the premise of overbought small caps relative to large caps, as evidenced by a shrinking price-to-earnings ratio premium of small caps vs large caps
• Small caps have also displayed better improvements in their profitability ratios relative to large caps
• The financial metrics indicate that the outperformance of small caps over large caps is justified