Quant – Navigating Crests & Troughs – May’26 sectoral PE trend
Published on 02 Jun 2026
Overall, May’26 valuations remain mixed. Industrial and cyclical sectors such as capital goods, cement, chemicals, automobiles, auto parts, textiles continue to trade above long-term averages, with defence and power among the most expensive pockets. On the other hand, sectors including IT, FMCG, hospitals, hotels, agro chemicals, building materials and real estate are trading below historical averages, offering relatively better valuation comfort, while retail remains the most undervalued. Consumer durables continue to appear expensive, pharma is broadly fairly valued, and metals, oil & gas and textiles trade moderately above averages, reflecting ongoing cyclical strength. Despite the moderation during the month, most sectors remain within their historical valuation bands, indicating limited signs of deep undervaluation across the market.
