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Sorry for the delay in replying. Frankly, I did'nt expect any reply.
Why is the Indian stock market undervalued ??? Well, on various valuation parameters, it does look cheap. Which parameters ???
Price to earnings, price to sales, dividend yeild, price to cash flow, price to enterprise value, etc, etc, etc. Also, look at the ratio of total mkt cap to GDP !!! Its the lowest in years !!! Besides, interest rates are almost at their lowest ever and inflation is benign.
Oh, India has lots and lots of problems, I know !!! But isn't that, at least in India's case, par for the course ??? Can things get much worse ??? Perhaps. But, I tend to look at things positively. As regards
the slowdown in mfg, thats true, but services and agriculture are doing fine and mfg itself is poised for an upturn.
Having said this, I do not advocate buying across the board. Instead careful, disciplined stock specific buying at dips could prove extremely rewarding over the next few months/years.
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