Valuations in India’s stock market have normalised andare now in line with long-term averages but that does not mean they are cheap, according to Pankaj Murarka, chief investment officer at Renaissance Investment Managers.

“After a year of consolidation, valuations have normalised at 29 times one-year forward earnings. India is no longer as expensive as it was a year ago. Valuations are now in line with long-term averages,” Murarka told NDTV Profit in a televised interview.

“Valuations are reasonable, but not cheap or too attractive,” he added. The fund manager also asserted the point that India remains a long-term growth story and foreign funds will eventually return.

Indian stocks are still below their life highs reached at the end of September 2024. The benchmark Nifty 50 and BSE Sensex have declined around 6% in the last 12 months. Besides, India has been the worst-performing equity market in Asia, primarily due to a pullout of foreign capital.