With earnings risk, valuations aren't really compelling: Edelweiss Fin head

In a Q&A, Aditya Narain says India's valuations have come off but are still more expensive than other markets. Also, downward pressure on earnings makes the environment uncertain

Inflation trajectory, both domestically as well as globally, will shape the economy and the market, over the next couple of quarters, says Aditya Narain, Head of Research at Edelweiss Financial Services. In an interview to Samie Modak, Narain says India’s valuations have come off but are still more expensive than other markets. Also, the downward pressure on earnings makes the environment uncertain. Edited excerpts:

What are the key headwinds for the market at this juncture?

Very simplistically inflation--and its impact on demand and monetary policy and fiscal policy responses. It’s been a very long time since India experienced such broad-based