Recently, Mike Shiao, Chief Investment Officer (excluding Japan) at Schroders, and Investment Director Chandrashekhar Sambhshivan stated that due to consistent policy stability, resilient macroeconomic conditions, ample domestic fund inflows, and strong economic growth, companies in India are expected to record double-digit profit growth. Therefore, Schroders holds a positive and constructive view on Indian stocks. Schroders believes that current valuations make Indian stocks more attractive for investors seeking opportunities in the Indian market. In recent years, Indian stocks have consistently outperformed most emerging market countries, with all sectors showing positive performance. However, after a recent market correction, Indian stock valuations have fallen slightly, due in part to profit-taking, changes in geopolitics in the Middle East, and the upcoming US presidential elections. From a valuation perspective, Indian stocks (represented by the MSCI India Index) are currently valued lower than 1 standard deviation over the past five years. Some mid-cap stocks with strong fundamentals and higher earnings visibility have also undergone correction, making current valuations more reasonable than a few weeks ago. Schroders points out that Indian companies have shown strong earnings growth, significantly outperforming most developed economies and some emerging markets such as Thailand, Indonesia, and Brazil. Currently, it is the earnings reporting season in the Indian market, and the latest financial reports released so far remain robust. For the fiscal year 2024, the return on equity (RoE) of the MSCI India Index reached 16.9%, a 13-year high, indicating increased returns for investors. With Indian companies' RoE transitioning from low double digits to mid double digits in recent years, it is expected to achieve higher and more sustainable RoE in the future. Moreover, over the past decade, Indian companies have effectively managed their balance sheets, maintaining low leverage and benefiting from demand-driven growth. The debt ratio (total debt divided by total assets) of the MSCI India Index has significantly improved, dropping from 28% in 2019 to 21.2% by the third quarter of 2024. The ratio of free cash flow to sales has also risen substantially, now exceeding the long-term average. Schroders expects corporate balance sheets to continue strengthening. In terms of liquidity, benefiting from robust domestic liquidity and inflows of foreign institutional funds, liquidity in the Indian stock market remains strong. These trends reflect the high confidence of Indian people in the country's economy and market, and this positive structural fund flow is expected to continue. Schroders states that Indian stock valuations are falling to more attractive levels. Considering the strong fundamentals and macroeconomic stability that can support the valuation of Indian stocks, there is still room for valuation to increase in the future.