Sector Valuations Remain Mixed in April 2026; Select Opportunities Emerge Amid Divergence: PL Capital
PL Capital (Prabhudas Lilladher Group), one of India’s leading financial services organizations, in their latest report on sector valuations mentioned a mixed market scenario for the month of April 2026, where there is definite divergence between the sectors. This report analyses the one-year forward PE ratio for 20 major sectors, showing that although cyclicals remain expensive, many sectors have become undervalued.
The results from the analysis show that some industries such as those producing capital goods, cement, chemicals, Automobiles, and power are relatively more expensive compared to their historical averages, owing to high profits and good demand visibility. The defence and power industries, however, remain the two most expensive industries in the market.
On the other hand, there are a number of sectors which are trading below their respective historical valuation yardsticks, thus providing better comfort from the valuation point of view. They include IT, FMCG, hospitals, hotels, agrochemicals, construction materials, and real estate. However, the retail sector is considered the most under-valued among them.
Key trends identified:
- Cyclical sectors remain expensive: Capital goods, cement, chemicals, automobiles, and power continue to trade above long-term averages
- Valuation comfort in select sectors: IT, FMCG, hospitals, hotels, and real estate are below historical benchmarks
- Retail most undervalued: Offers relatively better entry opportunity among tracked sectors
- Defence and power expensive: Reflect strong investor optimism and sustained re-rating
Moreover, the report pointed out that consumer durables are still costly compared to other stocks due to previous corrections, whereas pharmaceuticals are roughly in alignment with their average long-term levels. Metals, energy, and textile shares also appear to be trading somewhat above their average historical levels.
From a broader perspective, it is important to note that only eight out of twenty industries under consideration have valuations lower than the industry's historical average.
Commenting on the findings, [Spokesperson Name], [Designation], PL Capital, said, “Sectoral valuations remain disparate with cyclical sectors showing high earnings visibility while other sectors have become more attractive. The present scenario is expected to see market movement determined by earnings growth and fundamentals of the individual sectors rather than expansion in valuations.”
PL Capital feels that investors should have a disciplined investment philosophy in sectors that provide valuation comfort and visibility for sustainable growth while being cautious about segments that are expensive in terms of valuations.
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