Sensex Vs Dow: Are Indian Markets Still Overvalued? | CA Rachana Ranade

For the first time in 16 years, the Sensex's Trailing Twelve Months (TTM) Price-to-Earnings (PE) ratio (21.8) is lower than the Dow Jones Industrial Average's TTM PE ratio (22.4). Historically, the Sensex has traded at a 25% premium to the Dow Jones's PE, suggesting a potential shift or a new perspective on India's growth potential relative to the US.

The current valuation of the Indian market, as indicated by the Sensex's PE ratio, may be reasonable based on current data, but it raises questions about whether India's future growth potential and growth story are still intact or if they are being discounted in the current market prices.