We believe one should not look at indices, before concluding Indian markets are expensive. The additions to indices specially in large cap have mostly been costlier stocks making their past absolute valuations un-comparable. Indian seems to be in a Goldilocks situation with High Growth of corporate earnings, an ever growing macro economy contributing to ~15% of worlds incremental growth and witnessing start of a Capex cycle to help India become a manufacturing hub for the world. Themes we like are a) Power, b) Water c) Defense, d) Railways, e) ER&D and f) Chemicals.
