Indian merchandise seem “cheap” because their price-to-earnings ratios have dipped below those long-term averages contrast to the US and other emerging markets. But Amit Bhartia, the founder of Delorean Partners and a seasoned portfolio manager who’s spent decades navigating global markets, is pushing back hard. He says we’re asking the wrong question entirely. India doesn’t deserve to be judged by the same old yardstick from past regimes. The current setup—economically, geopolitically, and on the ground—calls for something different.
Bhartia, who previously put in nearly 30 years at GMO as a partner and CEO of their Singapore office, laid this out clearly in a recent LinkedIn post that’s making waves. He kicks things off with a nod to the late statistician John Tukey: better to get an approximate answer to the right question than a precise one to the wrong one. Wall Street loves averages, but Bhartia argues they’re misleading here. “The arithmetic is right. The question is wrong. Valuations are regime-dependent,” he writes.
So what’s changed? For starters, India’s earnings story isn’t what it used to be. Remember how the premium for Indian equities was built on outperforming peers in growth? Bhartia points to charts tracking 12-month trailing EPS, reset to a base in 2012. India was pulling ahead of emerging markets until around September 2025, then it all slipped back. Now the trends are pointing down relative to both the US and EM peers. That relative strength that justified higher multiples? It’s fading fast.
Investors have been betting on India’s shine for years, but when earnings impetus cools like this, it forces a rethink. Corporate results have been varying, consumption feels soft in places, and the broader global picture isn’t helping. Bhartia’s take cuts through the optimism: you can’t keep applying yesterday’s playbook when the fundamentals under the hood have shifted.
Then there’s the geopolitical angle, which Bhartia unpacks with some real edge. For two decades, India got a bit of a free ride as the US zeroed in on China. Trade deficits tell part of the story—China’s ballooned while India’s grew too, but alongside surging IT exports, H-1B visas, and Indian students flooding American campuses (from about 80,000 two decades ago to over 360,000 recently). Washington is noticing. Bhartia quotes US Deputy Secretary of State Christopher Landau at the Raisina Dialogue: the US isn’t about to repeat the “mistakes” it made with China.
Add to that Russia’s tightening embrace with China—becoming more of a junior partner, reliant on Beijing for everything from commodities to tech. India’s old role as a strategic counterweight isn’t shining as bright anymore. Fewer hedges, more scrutiny. In a world where capital flows and policy winds shift with great-power rivalry, that premium India once enjoyed looks shakier. Bhartia doesn’t sugarcoat it: India is entering this new phase with different cards in hand.
But perhaps the most grounded part of his argument is what he calls the “Grassroots Distress Index.” Official stats can paint a rosy picture sometimes, but Bhartia and his team built something that looks closer to the street level. It mixes real entry-level IT fresher salaries, microfinance loan delinquencies, and household net financial savings as a slice of GDP. Right now, this index is sitting at multi-year highs. That suggests everyday economic stress—especially among younger workers and lower-income households—is running hotter than headlines admit.
When people at the bottom are feeling the pinch—whether through stagnant starting pay in key sectors, rising defaults on small loans, or squeezed savings—it ripples through the whole economy. Consumption, which drives a huge chunk of India’s growth story, doesn’t magically rebound if households are stretched. Bhartia uses this to hammer home his point: high distress doesn’t scream “buy the dip based on historical averages.” It asks for caution.
None of this means India’s story is broken. Far from it. The country still has structural tailwinds—demographics, digital push, policy focus on manufacturing and infrastructure. But Bhartia is saying stop averaging across regimes you simply can’t average. Treat those 20-year multiples as a starting point, not gospel. The real question isn’t “Is India cheap versus history?” It’s “What multiple does India actually deserve right now, given earnings trends, geopolitics, and ground realities?
This view lands at a tense time for Indian markets. Valuations have come off their peaks, but debates rage about whether large-caps look reasonable or if mid- and small-caps still carry froth. Foreign investors have been selective, and domestic flows have shouldered a lot. Bhartia’s contrarian lens—rooted in deep experience across emerging markets—adds a necessary dose of realism. It’s easy to chase averages; harder to stare at the messy, regime-specific picture. In the end, Bhartia isn’t calling for panic or a blanket sell. He’s urging sharper questions. Smart investors will dig into the components, not just the headline averages.
As Bhartia puts it, an approximate answer to the right question beats the precise wrong one every time. For anyone with skin in the Indian equity game, that’s worth chewing on. The regime has changed—valuations should reflect that.
Sources:
- Livemint article: “India deserves a different valuation framework in the current regime, says Delorean Partners’ Amit Bhartia” (June 22, 2026)
- Amit Bhartia’s LinkedIn post: “On India Valuations: An Exact Answer to the Wrong Question” (June 16, 2026)
- Delorean Partners website and team profile
- Additional context from market reports on Indian valuations and geopolitics.
