Valuations still 'expensive', even after the drawdown: Expert takes from MC Global Wealth Summit

Experts weigh in on valuations, economic growth, and global shifts at the Global Wealth Summit 2025

A panel of top money managers at the Moneycontrol Global Wealth Summit echoed the need for caution in investing in the broader market space, as valuations may not be cooled off entirely.

The big froth in the small and midcap space might be over, said Prashant Jain, veteran money manager and founder of 3P Investment Manager, but he is still not comfortable with valuations in the space and sees an extended period of underperformance. The sharp decline is the space, seen in recent months may be behind us, he added.

Rashi Talwar Bhatia, Partner & Portfolio Manager, Ashmore Investment Management India said even after a 30 percent drawdown in the small and midcap space, stocks still appear expensive. "…we've corrected from being two standard deviations above the 10-year history, but we're still a standard deviation above (In small and midcaps)," Rashi added.

She said that there is a need for rationalization of valuations, and one should look at the price one is paying. While believing in India's long-term growth story and a ‘consistent upward trend’, Rashi Talwar warned that equity valuations cannot get ‘out of whack, so to speak.’

Both Talwar and Jain agreed that largecap stocks are starting to present attractive valuations.

On India Story

Prashant Jain said the IPO supply should decrease by 60-80%, following which Foreign Institutional Investor (FII) selling could slow down. "Local flows are expected to remain steady with majority going towards largecaps," Jain said, adding that profit growth for India is likely to be around 10-12% as profit margins don’t have much room for expansion. The high, compounding returns seen during 2019-24 have now returned to more normal levels, said Prashant Jain.

Abakkus Asset Manager’s Sunil Singhania said that the key focus should be on whether India’s economy can sustain a 6.5–7% growth rate, in order to drive a profit growth of 11–12% per annum.

Trump’s Reciprocal Tariffs 

Singhania feared that the deterrence of reciprocal tariffs may be waning, referring to the flipflop on tariff imposition by US President Trump. At some point, repeated warnings and interventions lose their impact. "…like how constant shouting eventually gets ignored, global markets too will also adapt and move on. While new developments will continue to influence markets and create short-term concerns, the broader economic picture remains unsettled," Singhania added.

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