In recent days, Mike Shiao, Chief Investment Officer of Schroders Asia (excluding Japan), believes that the Indian stock market is growing strongly and valued above average levels, therefore he is optimistic about the Indian stock market. Compared to the MSCI India Index, Indian small-cap stocks often have higher price-to-earnings ratios. Schroders expects Indian large-cap stocks to have greater upside potential in 2024, as they typically demonstrate higher return on equity (ROE). The current trading levels of Indian stocks are close to the +1 standard deviation level of the past 10 years. Considering the strong earnings visibility of Indian companies, the expected price-to-earnings ratio may sustain within the long-term trend range. When considering the P/E ratio and economic growth, it is found that the valuation of the Indian market is reasonable and outperforms other major economies. Schroders believes that maintaining a rigorous valuation approach is crucial while recognizing strong fundamentals and macro stability, all of which support the further upside potential of Indian stock valuations. Schroders states that the valuation of the Indian stock market is supported by three main factors: First, strong corporate earnings growth. The strong demand in manufacturing and non-essential consumer goods industries is increasing pricing power, driving earnings growth. Companies across industries are showing sustained growth in earnings, with return on equity (ROE) reflecting positive growth. It is expected that by the fiscal year 2024, Indian companies' ROE may reach a new high in ten years, at 15%, and a disciplined and orderly expansion is expected to drive further ROE growth. On the other hand, Indian companies' profit growth is robust, with average earnings per share growth over the past five years at 22%. Earnings are currently experiencing a significant cyclical uptrend. Indian companies' earnings per share growth is significantly higher than most developed economies and emerging markets, and is expected to reach around 17% by 2024. Historical trends confirm that India's economic growth can substantial corporate earnings. Second, strong corporate fundamentals. Over the past decade, Indian companies have been able to effectively manage their balance sheets, maintaining a low leverage position, benefiting from demand-driven growth. The debt/equity ratio of Indian companies is at a historical low, around 0.5 times. Third, positive macro factors. The structural transformation of the Indian economy over the past decade has brought confidence to the market. The expected growth upcycle in India is expected to generate strong profits over the next three to four years. Expected interest rate cuts will boost market confidence in India's future cash flows, and its strong relative growth will further benefit this positive outlook.