AI: Valuations & Leverage A Concern
Think Medium-Term, Be Strategic, Focus On Quality Companies
FinTech BizNews Service
Mumbai, 04 November, 2026: A new Samvat year brings new opportunities and possibilities. The year gone by has seen significant changes in the global economy and financial markets, bringing both opportunities and challenges. As we step into Samvat 2083, here is the perspective of Uday Kotak, Founder and Non-Executive Director, Kotak Mahindra Bank, on the key developments shaping the markets and what investors can look forward to in the year ahead.
Key highlights from his message:
- Indian investors showed remarkable resilience
Despite geopolitics, volatile global markets and significant FII outflows, domestic investors continued to demonstrate confidence in Indian equities. - India’s relative valuation picture is improving
After the correction in markets, India no longer looks as expensive relative to other markets as it did six to twelve months ago. Its higher-growth potential remains an important advantage. - AI is transformative, but valuations and leverage are a concern
AI will reshape the global economy, but heavy borrowing and investment behind the AI boom have created pockets of significant overvaluation. A correction in the global AI trade could potentially lead to flows returning to India. - Oil and interest rates are key risks to watch
Higher crude prices remain a vulnerability for India because of its high import dependence. On rates, he expects the overnight repo rate to move up by another 50 to 75 basis points from current levels, which could also create pressure on long-term bonds and yields. - For investors, quality and risk management matter more than short-term calls
The central investment message is to think medium-term, be strategic and focus on quality companies. Traders, particularly in derivatives, should maintain enough financial capacity to withstand volatility and avoid excessive risk - Watch the video here: https://www.youtube.com/watch?v=GX54WcgvP4Y
