Indian equity markets face a valuation challenge that could keep them range-bound in the near term, according to UTI AMC 's Head of Equities, Ajay Tyagi. Despite strong domestic flows, policy support, and earnings recovery expectations, current market pricing reflects much of this optimism, creating limited room for significant re-rating.

Current Valuation Landscape

Tyagi highlighted that Indian markets have been trading at a premium to their long-term valuation averages since 2024. Even after nearly a year and a half of consolidation since the August 2024 peak, the valuation premium persists across market segments.

Earnings Growth Disconnect

The valuation concern stems from a significant disconnect between market expectations and actual earnings delivery. Tyagi pointed out that while India typically witnesses corporate earnings growth aligned with nominal GDP at around 12.00%, recent performance has fallen short of this benchmark.

This earnings underperformance occurred while markets had already priced in stronger growth, resulting in elevated valuations as prices remained high despite lagging fundamentals.

Forward Outlook and Policy Support

Looking ahead, consensus expectations are building in a sharp recovery for FY27 earnings, estimating nearly 16.00% growth over FY26. Policy changes including income tax relief and GST rationalization are expected to support consumption patterns. However, Tyagi cautioned that markets are not cheap even after accounting for these positive developments, as the forward earnings optimism is already factored into current pricing.

Sectoral Value Opportunities

Despite the overall valuation concerns, Tyagi identified specific sectors offering relatively better value propositions based on current pricing metrics.

Private Sector Banks

Private sector banks emerge as one of the few pockets trading at a discount to their long-term valuation averages. Despite demonstrating:

• Better underwriting quality than PSU peers
• Stronger balance sheet positions
• Superior operational metrics

These banks have underperformed the broader market rally, leading to comparatively reasonable pricing opportunities.

Information Technology Sector

The IT sector presents another attractive opportunity where valuations have cooled to near long-term averages after a challenging period. Tyagi noted that fears around AI disruption appear overplayed, creating scope for mean reversion as earnings stabilize and the sector adapts to technological changes.

Auto Original Equipment Manufacturers

Auto OEMs appear better positioned on valuation metrics despite their operational strengths. These companies have delivered:

• Stronger returns over time
• Healthier balance sheet positions
• Consistent operational performance

Yet they continue trading at lower multiples than ancillaries, creating a valuation gap that Tyagi finds difficult to justify based on fundamentals.

Investment Strategy Implications

Tyagi's assessment suggests that while Indian markets are not cheap and optimism is largely priced in, select pockets like private banks, IT, and auto OEMs offer relatively better value. He expects broad indices to consolidate further, making stock picking guided by realistic valuation expectations a key strategy for navigating the current market environment.

The combination of elevated overall market valuations and sector-specific opportunities creates a mixed landscape where selective investing based on individual company fundamentals and sector valuations becomes crucial for potential outperformance.

Source: https://www.etnownews.com/markets/exclusive-market-valuations-high-ajay-tyagi-of-uti-amc-lists-top-sectoral-bets-article-153420090

UTI AMC has announced the appointment of Mr. Kapil Udaiwal as President & Head - Human Resources, effective January 1, 2026. The company disclosed this senior management change under Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Appointment Details

The appointment was formalized through a regulatory filing dated January 2, 2026, addressed to both the National Stock Exchange of India Limited and BSE Limited. The company's communication outlined the key aspects of this leadership change in its human resources function.

Professional Background

Mr. Udaiwal brings extensive experience spanning over 23 years across ITES, IT, and BFSI sectors. His career trajectory includes significant roles at prominent organizations, demonstrating his expertise in human resource management and organizational development.

His professional journey includes:

• Early Career: Experience with Aptech Limited and Infosys
• Recent Role: Chief Human Resource Officer at Ageas Federal Life Insurance Company for over 13 years
• Key Achievement: Successfully led Ageas Federal's transformation to become a "Great Place to Grow"
• Scale of Management: Oversaw a workforce of 2,200+ employees across 77+ locations
• International Exposure: Managed HR integration from Ageas Global Office (Belgium) to India

Educational Qualifications

Mr. Udaiwal's academic credentials reflect a strong foundation in both technical and management disciplines. His educational background encompasses multiple specializations relevant to his new role.

Regulatory Compliance

The appointment follows proper regulatory protocols, with UTI Asset Management Company Limited ensuring full compliance with SEBI guidelines. The company has made the information available on its official website at www.utimf.com/amc-shareholders , maintaining transparency with stakeholders.

The filing was signed by Arvind Patkar, Company Secretary and Compliance Officer (Membership No.: ACS 21577), ensuring proper authorization and documentation of this significant organizational change.