India has been one of the worst-performing markets in 2025, according to valuations Guru Aswath Damodaran in his blog post. Despite being part of one of the fastest-growing economies, he believes Indian stocks remain the most expensive. Damodaran also noted that the Chinese Shanghai index has outperformed India’s benchmark index, the Sensex, so far this year.
“The most expensive market in the world is India, and no amount of handwaving about the India story can justify paying 31 times earnings, 3 times revenue, and 20 times EBITDA, in the aggregate, for Indian companies,” Damodaran wrote in a blog post recently.
He argues that while India’s economy is growing quickly, its current valuations are significantly higher than those of most global markets. He refers to EBITDA, which represents a company’s earnings before interest, tax, depreciation, and amortisation, as a key measure of profitability.
Damodaran compares India to other regions, pointing out that some of the more affordable markets, such as those in Latin America and Eastern Europe, come with risks like political instability and slow growth. On the other hand, Japan, often regarded as a low-growth market, is struggling with additional challenges related to its ageing population. His analysis is reflected in the performance of blue-chip stocks across various countries this year.
In particular, the benchmark indices of Argentina, Brazil, and Chile have outperformed those of other nations. Damodaran highlights that while India’s price-to-earnings (P/E) ratios are elevated, other regions are seeing investors pay lower multiples.
His caution about expensive valuations extends beyond India. As a Professor of Finance at New York University’s Stern School of Business, Damodaran notes that certain markets in the Middle East may appear expensive due to market composition, where a large presence of financial services firms, often with no reported revenues, can skew perceptions.
At the same time, regions like Japan and South Korea seem undervalued based on enterprise value-to-sales metrics, despite facing broader economic challenges.
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