Himanshu Sinha@hsinha1445
"Indian markets are undervalued."
You hear it everywhere. The data says the opposite — at least where the AI and defence money is actually going.
The chart below is trailing-twelve-month PE, India vs the US, sector by sector. Government companies excluded.
🛡️ Defence
India median: 85x. US median: 23x. India premium: +267%.
Lockheed Martin trades at 25x. Solar Industries trades at 97x. Same business model — long-cycle defence procurement — radically different price tag.
⚡ Grid and electrical infrastructure
India median: 104x. US median: 40x. India premium: +159%.
Hitachi Energy India trades at 180 times earnings. The parent — Hitachi Energy globally — has never seen that multiple. Same products, same customers, same contract book. Different listing.
🤖 AI compute hardware
Netweb Technologies — the only listed Indian AI server builder: 123x.
Nvidia, Broadcom, AMD, ASML — median: 64x.
India premium: +94%.
🔌 Power generation
India median: 37x. US median: 42x. India premium: −10%.
This is the one tide where India is not at a premium. Indian power generators trade roughly in line with US peers. Credit where it's due — the valuation case here is honest.
The other three are not.
Three clarifications on what I left out:
I dropped EMS — Dixon, Kaynes, Syrma, Amber, PG Electroplast, Cyient DLM. They're real companies riding a real PLI tailwind. But the bulk of their revenue is from mobile phones, ACs, washing machines, lighting. That's manufacturing-localization, not AI. Folding them in here would dilute the thesis with washing-machine multiples. They deserve their own piece.
I also dropped data centres. There is no clean Indian listed pure-play. CtrlS, Yotta, Netmagic, STT GDC — all private or foreign-owned. That absence is itself a finding. Indian capital wants to bid up "AI infrastructure" without having the actual infrastructure to bid for.
And I dropped PSUs — BEL, HAL, BHEL, NTPC, Power Grid, Coal India. Yes, their PEs look low. But that's how dividend stocks work everywhere. PSUs pay out most of their profits as cash every year — so your return comes from the dividend cheque, not from the stock re-rating upward. When you get paid in cash year after year, the market doesn't need to award a high multiple. The PE stays low by design, not by accident. Different animal — doesn't belong in this comparison.
Indian markets aren't broadly undervalued. The loudest tides — defence, grid, AI hardware — are priced like they're already the next big thing.
