Indian equity valuations are currently trading above their long-term averages, suggesting that stocks are not inexpensive at current levels, according to Motilal Oswal Financial Services. However, the brokerage firm believes that the market is not yet in an overheated zone.

The Nifty is trading at an estimated price-to-earnings (PE) ratio of 21.7 times, which is higher than its 5-year, 10-year, and 15-year averages. Additionally, the price-to-book multiple for the Nifty stands at 3 times, compared to a decade average of 2.7 times.

While these figures indicate that valuations are elevated, Motilal Oswal Financial Services points out that the Nifty's PE ratio was even higher at 23-24 times in September 2024, when the indices reached their peaks. The market capitalization-to-GDP ratio, a broad indicator of overall market valuations, is estimated at 127% for fiscal year 2026, which is above the historical average of 87%, but down from a peak of 146% in September.

Furthermore, the PE ratios of mid-cap and small-cap indices suggest that their valuations are at a premium compared to large-cap stocks. Despite this, Motilal Oswal's head of institutional research, Gautam Duggad, has stated that the firm is increasing its allocation to mid-caps, citing their superior growth potential. The brokerage firm prefers a combination of large- and mid-cap stocks.

Motilal Oswal Financial Services offers a variety of financial products and services, including retail and institutional broking, financial products distribution, and investment banking. The company's services cater to a diverse clientele, including resident and non-resident individuals, Hindu undivided families (HUFs), and corporations.

The company's shareholding pattern reveals that promoters hold a significant stake at 68.44%, followed by foreign institutions at 6.01%, mutual funds at 5.12%, and other domestic institutions at 0.59%.

Motilal Oswal Financial Services' financial performance shows a mixed picture. While the company has demonstrated strong growth momentum in the past, recent quarterly results indicate a decline in revenue and profit. Specifically, the company posted a loss of ₹64.77 crore in March 2025 quarter, following three consecutive quarters of profits. Additionally, the company's quarterly topline performance witnessed a decline of 39.65%, the lowest in the last three years.

Despite these short-term setbacks, Motilal Oswal, MD & CEO of Motilal Oswal Financial Services, remains optimistic about the company's long-term prospects. He highlighted that the company's operating PAT crossed a major milestone of ₹2,000 crore and that all capital market businesses gained market share. He believes that India's financialization theme has only just begun and has many years to go.