ICICI Prudential Mutual Fund

Equity Market Outlook

Our Equity Valuations Index indicates that the valuations are not cheap and continue to remain in the neutral zone.

Equity Valuation Index

Equity Valuation index is calculated by assigning equal weights to Price-to-Earnings (PE), Price-to-Book (PB), G-Sec*PE and Market Cap to GDP ratio. G-Sec – Government Securities. GDP – Gross Domestic Product, Data as on October 31, 2025. Equity Valuation Index (EVI) is a proprietary model of ICICI Prudential AMC Ltd. (the AMC) used for assessing overall equity market valuations. The AMC may also use this model for other facilities/features offered by the AMC and any other factor which the AMC may add/delete from time to time.

Key Takeaways

	Global macros at this point of time are more challenging which may impact global growth. Contrary to this, India's fundamental attributes are robust and sustainable – Clean balance sheets, a structural increase in consumption, unwavering domestic demand, and fiscal prudence. Hence, long term structural story remains intact. Recent RBI actions like liquidity injection; key policy rate cuts, large dividend to the Govt. and GST rationalisation are positive for India’s business cycle and in-turn may result in India growth and corporate earnings to pick-up.
	Indian markets have underperformed global markets considerably making it a contrarian option. Having said that, valuations are not cheap but have moderated from the peaks. Mid-cap and Small-cap valuations continue to remain high.
	So, investors with a long-term view can remain invested in equity markets. We continue to recommend investing in Hybrid schemes and opting for one-step higher risk in the hybrid category. Investors who wish to invest in diversified equity schemes should stick to flexible mandate or large-cap biased schemes.

Source: U.S.– United States of America; US Fed: Federal Reserve of US; FY: Financial year. FPI– Foreign Portfolio Investor.

Detailed Equity Update

Fixed Income Outlook

Our Debt valuation index suggests maintaining a cautious stance on duration due to evolving growth-inflation dynamics and global uncertainty.

Debt Valuation Index

Data as on Oct 31, 2025. Debt Valuation Index considers WPI, CPI, Sensex returns, Gold returns and Real estate returns over G-Sec yield, Current Account Balance, Fiscal Balance, Credit Growth and Crude Oil Movement for calculation. RBI – Reserve Bank of India. Debt Valuation Index is a proprietary model of ICICI Prudential AMC Ltd. (the AMC) used for assessing overall debt valuations. The AMC may also use this model for other facilities/features offered by the AMC. Cautious Highly Aggressive Aggressive Moderate Very Cautious

Key Takeaways

	Bond yields cooled down in Oct 2025 tracking the fall in US Treasury yields. Expectations for further policy easing by the RBI also brought down yields.
	However, yields began to rise again after the US Fed’s hawkish remarks that dampened hopes for a December 2025 rate cut. In line with our view, we expect economic growth to rebound strongly. Also, the yield curve shape is very steep at the current juncture.
	Effectively, this means that as recovery progresses we may see the yield curve flatten. On monetary policy, we believe the room for policy easing is limited given the expected growth recovery. Also, the space for further rate cuts is quite narrow.
	We find the forward pricing of long-dated G-sec yields and the 5-year OIS attractive. The forward curve is already pricing in policy normalization. We expect the curve to flatten over the next 1–2 months. We like long-duration assets and SDLs from a tactical perspective. We recommend low duration, corporate bond and short term category of schemes under the current policy environment.

Source: Data Source: RBI Monetary Policy Statement 2025-26 dated August 6, 2025, RBI Statement on Developmental and Regulatory Policies dated August 6, 2025

Detailed Fixed Income Update

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DISCLAIMERS:

The stock(s)/sector(s) mentioned above do not constitute any recommendation and ICICI Prudential Mutual Fund may or may not have any future position in this stock(s). Past performance may or may not be sustained in the future. The portfolio of the scheme is subject to changes within the provisions of the Scheme Information document of the Scheme.

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The information contained herein is only for the purpose of information and not for distribution and do not constitute an offer to buy or sell or solicitation of any offer to buy or sell any securities or financial instruments in the United States of America ("US") and/or Canada or for the benefit of US persons (being persons falling within the definition of the term "US Person" under the US Securities Act, 1933, as amended) or persons residing in Canada.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.