Archive · 29 Sep 2026
DBS Says India Stocks Look Expensive as Earnings Growth Lags
DBS is a bank that studied stock markets in Asia.
It says Indian stocks cost more than many other Asian stocks.
This means investors pay more for each unit of expected company earnings in India.
DBS also expects Indian companies’ earnings to grow more slowly than earnings in Asia ex-Japan.
India’s economy is still expected to grow strongly in 2026 and 2027.
Because of the high prices and slower earnings growth, DBS has a neutral view on Indian stocks.
The bank prefers China, Taiwan and Singapore in the region.
It says these markets may benefit from spending on artificial intelligence and semiconductors.
DBS also expects India’s interest rates and government bond yields to rise during the forecast period.
DBS says Indian equities trade at substantially higher valuations than Asia ex-Japan and emerging markets.
India’s forward P/E is 21.1 times, versus 11.7 times for Asia ex-Japan and 11.4 times for emerging markets.
DBS projects India’s earnings growth at 7.4% in 2026 and 10.9% in 2027, below regional forecasts.
The bank forecasts strong Indian economic growth but remains neutral on India within Asia ex-Japan.
DBS favors China, Taiwan and Singapore, citing their exposure to artificial-intelligence investment and semiconductor activity.
- Who
- DBS and investors in Indian and Asian equities.
- What
- DBS assessed India’s stock-market valuations, earnings outlook and regional positioning.
- When
- The forecasts cover 2026 and 2027, with some interest-rate and bond-yield projections extending through the third quarter of 2027.
- Where
- India and the Asia ex-Japan equity market.
- Why
- India’s stocks have much higher valuation multiples while projected earnings growth is lower than in Asia ex-Japan and emerging markets.
India Growth Case
Valuation Concern
Economic outlook
India Growth Case
India is expected to record strong GDP growth, with DBS forecasting 7.8% growth in calendar 2026 and 6.8% in 2027.
Valuation Concern
Strong economic growth has not translated into an equally strong relative earnings outlook, according to DBS forecasts.
Stock-market appeal
India Growth Case
India’s strong macroeconomic growth can support continued investor interest in its equities.
Valuation Concern
India’s forward P/E and price-to-book ratio are higher than comparable Asian markets, while its projected earnings growth is lower.
Regional preference
India Growth Case
India remains an important market in Asia despite DBS assigning it a neutral rating.
Valuation Concern
DBS favors China, Taiwan and Singapore, which it says are better positioned for the artificial-intelligence investment cycle.
- India forward P/E
- 21.1 times
- Asia ex-Japan forward P/E
- 11.7 times
- Emerging-markets forward P/E
- 11.4 times
- India earnings growth forecast
- 7.4% in 2026 and 10.9% in 2027
- India GDP growth forecast
- 7.8% in calendar 2026 and 6.8% in calendar 2027
- India policy-rate forecast
- 5.25% in the third quarter of 2026, rising to 5.75% in the fourth quarter
- DBS positioning on India
- Neutral within Asia ex-Japan