‘Investors must temper return hopes after stellar equity run’

The Sensex and Nifty reached new milestones of 85,000 and 25,000, respectively, last week. In an email interview with Puneet Wadhwa, JYOTIVARDHAN JAIPURIA, founder and managing director of Valentis Advisors, shares that his focus remains on finding companies that fit their 'U's' philosophy - undervalued, underowned, and undiscovered. Edited excerpts:

Will Indian equities outperform their emerging market (EM) peers, given current central bank policies?

After a stellar run in equities over the past few years, investors need to temper their return expectations. At current valuations, we may see time and price corrections, with increased volatility in equity markets. Our fiscal and current account deficits are in check, and lower oil prices are a positive factor.

India is poised to be the fastest-growing economy in the world in the coming years.

A drop in Fed rates will benefit all EM equities, including India. Globally, investors are particularly optimistic about India. In the short term, India's relatively high valuations (with an 85 per cent P/E premium over other EMs) could lead to better performance from some underperforming EMs.

What's your current market positioning?