New Delhi, Aug. 27 -- Since the market's lofty peaks last September, talk of "undervaluation" has grown louder on Dalal Street. The data tells another story. Despite occasional wobbles and sector rotations, valuations remain elevated, and far from bargain territory.

A Mint analysis of more than 4,000 BSE-listed firms shows that India's markets, even after recent corrections, look closer to premium than cheap. The debate is no longer whether stocks are undervalued, but whether India's growth trajectory justifies the premium investors continue to pay.

To grasp this shift, look back to the pandemic lows. On 23 March 2020, when the Sensex hit its Covid trough, fear reigned. Nearly two-thirds of companies traded below 10x earnings. Those bar...