Punita Kumar Sinha, managing partner of Pacific Paradigm Advisors and chairperson of InCred AMC, on Tuesday, said that the Indian market is trading at an expensive valuation.
“Valuations are really stretched. If you look at the overall market valuations, we are trading at over 3.5 or something in that range of price to book versus much lower valuations than we have seen historically, so overall, I would say our risk levels are a little higher now, given what is happening globally,” Sinha said, in an interview to CNBC-TV18.
According to her, uncertainty in China is likely to lead foreign flows towards India. “The China story is getting trickier, given the regulatory environment there and that is likely to benefit India,” said Sinha.
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On sectors, she said, “One sector that has seemingly lagged and could potentially benefit from any capex and growth recovery is financials because financials are gear to economic recovery and we have not seen that kind of crazy froth lately in the financial sector. So, there are pockets of opportunity over there and the capital adequacy is not looking good.”
“The real estate sector has been underperforming for a long time. Now, real estate, rents are going up everywhere, demand is picking up and employment is coming back. So real estate is another sector. The consumption story, of course in India, is a secular story, one will have to be mindful of inflation, but there are pockets of opportunities there. So while there are pockets of opportunities in different sectors like this, of course, the risk levels are rising, and one will have to be more cautious,” Sinha said.
For the entire interview, watch the video