India is overvalued if there is no evidence of investment cycle in next two years: Christopher Wood

ET Now caught up with Christopher Wood, Equity Strategist, CLSA, for his take on the Indian and global markets, as well as some stocks. Excerpts:

ET Now: In your latest strategy report, you have said the following – ‘India is the most promising story in Asia from a five-year time view.’ Five years are a long time. What about next one year, what about next three years? How do you see the India story panning out?

Christopher Wood: The key thing is, on a one-two-year standpoint, we need to see evidence of an investment cycle resuming in India. That is the key macroeconomic development we want to see. The investment cycle has been slowing down in India since 2009. In my view, the investment cycle bottomed out last year and from a one-two-year perspective, we get evidence that the investment cycle is resuming. If that is the case, current valuations in the Indian equities can be supported. If I am wrong and there is no evidence of an investment cycle in the next two years, then India is overvalued and, as I said, I am wrong.