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India Business News: The Next 50 index is projected to achieve a remarkable 39% earnings growth over the next year, based on Bloomberg's compiled estimates. This expected
The gauge has seen its forward profit estimates climb 20% so far this year, far outpacing the 3.5% increase for the larger gauge.
PSU stocks have surged, with 68% delivering multi-bagger returns. The index gained 101% in a year, outpacing benchmarks. Despite the bullish trend, questions arise on sustainability. Bernstein highlights select opportunities in high-momentum and dividend-yielding stocks with reasonable valuations.
The PSU index is expensive, trading at 11.2x fwd PE and 1.8x PB which is +1SD to the historical average. However, relative to the broader market (BSE 500), PSU portfolio is still trading below the historical mean on 12-month forward PE and just slightly above the mean on PB.
Bernstein and others make the argument that China isn't headed for Japan's "lost decades." The country may just be in a period of transition.