High-multiple stocks reshape Nifty 50, Push valuations above MSCI India for first time in 7 years

The Nifty 50 Index has overtaken the MSCI India Index in forward valuations for the first time in over seven years, fuelled by a wave of high-multiple stock inclusions that have sharply altered the index’s earnings profile.

As of latest data, the Nifty is trading at 22.77 times one-year forward earnings, compared with 21.83 times for the MSCI India Index a rare reversal that underlines the growing presence of high-growth, premium-valued stocks in the domestic benchmark.

The rebalancing of the Nifty in 2024 brought in several richly valued counters, notably Eternal, Jio Financial Services, Trent, and Bharat Electronics replacing lower-multiple stocks such as BPCL, Britannia, Divi’s Laboratories, and LTIMindtree.

Nifty 50: New additions and their performance

Eternal, up 72 per cent since March inclusion, trades at a staggering 362x forward earnings

Trent has jumped 34 per cent, with a P/E of 92x

Bharat Electronics has surged 83 per cent, now at 46x

Jio Financial, despite a 12 per cent decline, still commands a 92x multiple

By comparison, outgoing names carried far lower valuations; BPCL at 8x, Britannia at 46x, Divi’s Lab at 60x, and LTIMindtree at 28x.

Recent entrants like InterGlobe Aviation and Max Healthcare also trade at elevated multiples of 26x and 62x, respectively.

Nifty 50 Good performance in 2025

The valuation expansion has coincided with market outperformance. The Nifty 50 has gained 3.8% year-to-date, outpacing the MSCI India’s 2.4% rise — further widening the divergence in returns and investor perception.

Market strategists say the Nifty’s composition is increasingly skewed toward consumer, financial, healthcare, and digitally driven businesses, which may justify higher multiples, but also pose risks in a valuation-sensitive environment.

It is widely believed that while the Nifty’s new makeup reflects India’s shift toward growth and innovation-led sectors, the rich valuations will likely make the index more sensitive to global rate moves and earnings misses.