India has historically traded at premium multiples compared to other emerging markets. On the price to earnings (P/E) multiple, currently, it is trading at ~80% premium based on consensus estimates. India certainly has been, and is projected to be, among the fastest-growing emerging markets (EMs) (20-year growth: 7.0% real GDP). But GDP growth or even earnings growth, in and of itself, does not warrant a premium multiple or deliver higher returns. Other factors such as corporate governance and quality of underlying assets usually are the dominating factors in influencing multiples.
