Market valuation too demanding; divestment target may not be met: Nomura

Valuation of Indian stock market at 22.5 times fiscal 2021-22 (FY22) earnings is too demanding, said analysts at Nomura in their 2021 Asia economic, currencies & equities mid-year outlook call on Monday. Within the region, they expect north Asian markets, particularly China and Japan, to do well in the remaining part of calendar year 2021 (H2-CY21). The Rs 1.75 trillion divestment target for FY22, according to them, may not be achieved.

“Global investors are emotional and not rational. The traditional valuation parameters such as price-to-earnings ratio (PE) suggest that Indian equities are trading at 22.5x FY22 earnings, as compared to Japan