Capitalmind
Capitalmind
Actionable insights on equities, fixed-income, macros and personal finance Start 14-Days Free Trial
Actionable investing insights Get Free Trial
Charts & Analysis

Nifty P/E Close To Extremes While EPS Growth at Lowest in 5 Years, Before July Quarter Results

Share:

Indian stock market P/E ratio zooms upward, while earnings growth has been horrible for the Nifty. Here’s the standalone metric:

image

We’ve added two metrics here – one is an area coverted by green lines, a one standard deviation from the average (which is about 19). Most of the time the Nifty is within the 1 SD range.

The orange dotted lines is a 2 standard deviation move – that is, a much higher extreme. (beyond 2SD is noted at about 5% of the observations).

[blurb-capmind-prem]

We are currently at about 23.4 – probably a little bit higher today. The 25 P/E number is a good 500 points away – the Nifty needs to be beyond 9000.

But Earnings Growth Sucks

The last two times we crossed 23 P/E, our Nifty earnings were growing strong, or trending up. Given where we are right now, at -2.12% Earnings Growth for the Nifty as a whole, we are really in extreme territory!

However results are going to come in starting very soon – good, or not? That will determine where valuations really are.

 

Subscribe to Capital Mind:

To subscribe to new posts by email, once a day, delivered to your Inbox:

[wysija_form id=”1″]

Also, do check out Capital Mind Premium , where we provide high quality analysis on macro, fixed income and stocks. Also see our portfolio which has given stellar returns in our year, trade by trade as we progress. Take a 30-day trial:

[wysija_form id=”2″]

Share:

Like our content? Join Capitalmind Premium.

  • Equity, fixed income, macro and personal finance research
  • Model equity and fixed-income portfolios
  • Exclusive apps, tutorials, and member community
Subscribe Now Or start with a free-trial