Nifty stocks trade at a discount to respective 10-year average P/Es

Nifty50 rallied to a fresh record high of 11,856 in April but since then the momentum has fizzled out. The index is down about 3 percent from las month's high and it has also breached its crucial short-term moving averages at 5-days exponential moving average (EMA), 13, 20 and 50-days EMA in May.

A large part of the fall can be attributed to selling seen in the largecap stocks and about 25 such companies, or 50 percent, of the Nifty50 constituents are trading below their respective 10-year PE averages.

PE multiple, or price-to-earnings ratio, is a valuation metric which measures the current stock price relative to the company's earnings. It is also sometimes referred to as earnings multiple.

As many as 25 companies in the Nifty50 basket are trading below their respective 10-year average earnings multiple. These include Eicher Motors, Hero MotoCorp, L&T, Axis Bank, Yes Bank, SBI, NTPC and Power Grid, according to a report by Motilal Oswal.

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