Indian equity valuations have eased sharply down to the levels of peer regional markets, offering investors some comfort after a prolonged phase of elevated multiples.
The Nifty 50 is now trading at 19.4 times on a trailing 12-month (TTM) earnings basis, slipping below its five-year median of 22.6x and 10-year median of 22.3x—marking a marked shift down from recent peaks.
The headline index has slipped below the 20x price to earnings, or PE, mark for the first time since the Covid-led market disruption in 2020. At these levels, it is placed at a discount to markets in Taiwan, Japan, and South Korea, a Mint analysis based on data from Bloomberg showed.
The moderation follows a nearly 12% correction in the Nifty 50 from its 52-week high of 26,328.55 touched on 02 January 2026, driven by the West Asia war, sustained foreign outflows, and softer earnings momentum.
While the pullback has brought valuations below to historical averages, it also raises a key question: are Indian equities attractive enough to lure foreign investors back?
Foreign portfolio investors, or FPIs, have pulled out about ₹1.25 trillion from Indian equities in 2026, driven by global risk-off sentiment, earnings and growth concerns and sector-specific pressures.
“With the Nifty now around 19x PE, valuations have come off meaningfully and look more reasonable versus history,” said Ravi Singh, chief research officer at Master Capital Services.
Still, he said, it may be premature to call it a bottom. "Much will depend on earnings—any disappointment could drag valuations towards 17–18x, suggesting this is more of a consolidation phase than a clear buying zone.”
Sachin Jasuja, head of equities at Centricity WealthTech also added, “India's ~19x PE appears durable as a fair value floor due to strong GDP projections, moderating inflation and still-positive earnings momentum. Policy support and trade tailwinds add cushion, though global slowdowns could still pressure valuations towards emerging market levels.”
Valuations enter “fair zone”
The recent correction has pushed Indian equities into what analysts increasingly describe as a “fair valuation” zone, with its premium over global peers narrowing. In some cases, Indian markets are currently trading at relative discount to its peers.
At around 19x TTM earnings, the Nifty trades broadly in line with South Korea’s Kospi (20x), while remaining below Japan’s Nikkei 225 (22.3x), the US S&P 500 (23.7x) and Taiwan’s Taiex (25.4x). It continues, however, to trade well above markets such as Hong Kong’s Hang Seng (11.9x) and the UK’s FTSE 100 (14.6%).
This marks a notable shift from the market peak. On 26 September 2024, when valuations were elevated, the Nifty traded at 24.8x—almost at par with the S&P 500 (24.6x) and higher than most global peers, including the Nikkei (23.3x) and Taiex (22.3x). It also commanded a steep premium over the Kospi (13.7x), FTSE 100 (12.5x) and Hang Seng (10.1x).
Jasuja said the Nifty's premium over markets such as FTSE 100 is justified by India’s stronger growth outlook, favourable demographics, and structural reforms.
Growth visibility
What continues to anchor India’s valuations is its relatively strong macro and earnings outlook. According to a report by Emkay Global, India’s GDP is expected to grow at around 7.3–7.5% in FY26, among the fastest globally.
The brokerage also highlighted that despite the correction bringing Nifty valuations closer to 19x TTM, earnings visibility remains intact, with Nifty profits projected to grow at a low-to-mid teens over FY26–FY28 on annualised basis
This combination of high growth and earnings visibility remains scarce globally, particularly when compared with slower-growing developed markets and structurally challenged emerging economies.