Research
Research notes
Notes on valuations, market cycles, and investor behaviour, built from published data. Every figure is traced to its source, and nothing here recommends a scheme.
Valuations
- 16 August 2026The most-sold sector is the cheapest it's been since the COVID crashForeign investors sold Indian financials harder than any other sector for eighteen months. Private banks now trade at 2.0× forward book against a 2.5× long-term average, a 20% discount, while PSU banks sit 30% above their own history. Profit estimates point the other way.
- 12 August 2026You now pay a 27% premium for smaller companies. History charged 5%.Small and midcaps trade at a median 38× trailing earnings against a 20× long-run average, and at a 27% forward-P/E premium to large caps versus a 5% historical norm.
- 9 August 202620× earnings buys fair value, not a bargainThe Nifty's trailing P/E is near 20×. At 15% ROE and 10–12% earnings growth, textbook arithmetic puts the fair multiple at 16.5–18×. The index now sits between fair and average.
- 7 August 2026The SMID premium finally grew an earnings legMidcap profits grew 27.2% in FY26 and smallcaps 17%, against 9.9% for the Nifty 100. After a year of premium valuations resting on flows alone, the expensive half of the market has posted the growth to argue for it.
- 3 August 2026The Nifty below 3× book: same price, better balance sheetNifty's price-to-book fell below 3× for the first time since December 2020, but today's 2.95× comes with a 14.5% implied ROE against 11.8% then.
- 2 August 2026India's market is now smaller than its economyIndia's share of world market cap has fallen from a 4.64% peak to 3.06%, dropping below its 3.29% contribution to world GDP. Two years of underperformance have made the market cheaper relative to the economy it represents.
Macro & cycles
- 15 August 2026The market is correcting through time, not priceThe Nifty has spent 103 trading days below its 200-day moving average, a top-10 consolidation by length, yet never fell 20% from its peak. The index has corrected sideways instead of down.
- 13 August 2026The oil shock left India better off than it found itBrent peaked near $118 during the West-Asia war and by mid-July was back at $73, roughly where it started. The unwinding came from the supply side: Hormuz reopened, Chinese imports fell, the UAE left OPEC. For India's macro, the reversal matters more than the spike did.
- 11 August 2026Corporate India is cycle-ready, and waiting on demandNSE 500 ROE stands at 15% against a 22% prior peak. Margins have recovered; asset turns and leverage haven't. Balance sheets are the cleanest in the series. The constraint is demand visibility.
- 5 August 2026The rupee's bad year is the exporters' best yearThe INR fell against every major currency over twelve months, from 0.25% against the rupiah to 19.3% against the rand. In May, merchandise exports hit an all-time high of $45.2 billion, up 18% year on year. The depreciation is doing what depreciation does.
- 4 August 2026Consumption is at the kind of low that cycles turn fromPrivate consumption has averaged 10.4% growth since FY18, the slowest stretch in a series going back to FY67. Six decades of data read it as a cycle at its trough.
Global markets
- 14 August 2026AI capex has overtaken every boom that ended in a bustAI-related investment is running at 2.4–2.7% of US GDP, past the telecom and shale peaks and 40% of the railroad mania. Every $1 of it needs roughly $4 of end-user spending to pay off.
- 6 August 2026Tech is 41% of world markets. India's tech weight halved.Technology's share of global market cap now exceeds the dot-com peak, while the Nifty 50's technology weight has fallen from ~19% to 7.4%. The dichotomy cuts both ways.
Investor behaviour
- 16 August 2026Equity flows are crowding the expensive endSmall-cap funds took ₹7,768 crore in July, the most of any equity category, while large-cap funds recorded their first outflow of 2026. The money is moving toward the segment trading richest against its own history.
- 10 August 2026India's next cycle is being funded before the crowd arrivesJune's primary-market mobilisation hit ₹1,38,548 crore, almost half the entire quarter's total. Under 2% of it came from IPOs. Three-quarters was private debt placements, and most of the equity was QIPs sold to institutions.
- 8 August 2026Investors are borrowing record sums to buy a flat marketStocks bought on leverage (MTF plus loans against shares) have grown eleven-fold in six years, to 0.41% of total market cap, the highest on record.
- 1 August 2026SIPs made money in markets where lump sums lost itAcross 16 equity markets over 30 years, systematic investing held up in markets where lumpsum investing lost real money. India's numbers lead the study.