Nomura Securities is neutral on India from a valuations perspective, Jim McCafferty, head of Asia-except Japan research, told CNBC-TV18.

“Right now we feel that India is expensive on conventional valuation matrix but this is an evolving situation. We need to think about what international investors can and cannot do. Their emerging markets strategies are constantly reassessed. So like them, we are constantly looking at what is the right market to be into,” he said.

“We do feel that valuations of India, 18-19 times forward earnings, almost double of what we are seeing in other big markets in the region like Korea. So, valuations probably mean that India stays, for us, as a neutral right now,” said McCafferty.

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Talking about emerging markets, he said, “Many investors globally have emerging markets mandates and they have to be invested in a number of this part of the index and China, Russia seems to be areas that investors are unwilling to put a lot of money to work and for that reason, India is an obvious beneficiary.”

For the entire interview, watch the accompanying video

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