New Delhi, Jan. 30 -- The recent correction and sustained underperformance of the domestic stock market relative to other global markets may not be a temporary phase but could indicate a deeper, more permanent reset in market valuations, according to a report by Kotak Institutional Equities.

The report highlighted that Indian equities are facing growing disruption threats across sectors, while Indian companies have not made meaningful investments to counter these challenges.

As a result, the report believes this could eventually lead to a structural decline in market multiples, bringing them down to what it terms "correct" levels.

It stated "the recent correction in and continued large underperformance of the Indian market versus other...