ICICI Prudential Mutual Fund

Equity Market Outlook

ICICI Prudential Equity Valuation Index indicates that, valuations are not cheap and they continue to Remain in the neutral zone. To navigate recent market volatility, we continue to recommend Hybrid/Asset Allocation schemes. However, valuations have cooled off from the 2024 market peak. Hence, one can opt for investing in asset allocation schemes with relatively higher equity exposure. Investors who wish to invest inequity for the long term can invest in schemes that have the Flexibility to manoeuver across sectors/market cap.

Equity Valuation Index

Data as on February 28, 2026 has been considered. 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. 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 any other factor which the AMC may add/delete from time to time. G-Sec - Government Securities. GDP - Gross Domestic Product.

Key Takeaways

	On a macro level, Fiscal Deficit is well under control, inflation outlook is benign given supply side reforms, demand environment continues to remain robust.
	GDP data for Q3FY26 came in at 7.8% highlighting the sustained resilience & strengthening of Indian Economy while Indian markets have underperformed global peers significantly in recent times, cooling-off valuations. Rupee has also depreciated– making a case for FII comeback.
	Despite recent corrections from its peak in 2024, the overall market valuations continue to remain in the neutral zone.
	Meanwhile, the narrative around India’s long term structural growth continues to remain positive, there may be minor hiccups in the interim due to geo-political tensions, complex trade dynamics, choppy FII flows, soaring global valuations & volatile macros.
	We continue to recommend investing in hybrid / multi asset allocation schemes to manage anticipated interim volatility.
	If investing in equities for long term, we recommend schemes with flexibility to maneuver dynamically across sectors / market cap.

U.S.– United States of America; US Fed: Federal Reserve of US; FY: Financial year. FI– Foreign Portfolio Investor. AI– Artificial Intelligence.

Detailed Equity
Update

View Fund
Recommendation

Fixed Income Outlook

Our Debt valuation index hints at a moderately rewarding stance on duration. We would like to approach it with a combination of long duration G secs/SDL and short term corporate bonds.

Debt Valuation Index

Data as on Feb 28, 2026. 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

Key Takeaways

	We believe there is seasonal tightness in liquidity conditions during Jan-Mar quarter due to delayed fiscal spending, leading to a buildup of government cash surplus.
	Consequently, we have observed an increase in yields in the short-duration Certificate of Deposit (CD) and Commercial Bill (CB) segments. Given this context, we recommend that investors consider low or short duration funds to capture the elevated yields.
	In G-secs, we saw markets being fearful and cautious possibly due to end of rate cutting cycle by the RBI; losses in existing portfolio; fear of higher supply of G-sec/SDLs.
	We believe that these fears may be overstated and sentiment-driven as there are adequate drivers of demand for G secs from banks, NPS funds and insurance sector.
	The current yield scenario is already elevated and therefore, any further rise in yields may be relatively capped. At the current levels, we believe most of the negative are already priced in. The 15-year and above G-sec curve is already pricing in a normal economic environment.

Detailed Fixed Income Update

View Fund
Recommendation

For more details, please contact

Your Relationship Manager	[RM_NAME] [RM_MOBILE] [RM_EMAIL]
Head- Customer Engagement & Business Development	Rohit Khurana Rohit_Khurana@icicipruamc.com

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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.