Equity valuations remain pricey despite correction
Financial Express Mumbai|May 19, 2022
Trend to continue if downgrades in earnings estimates are significant
RUCHIT PUROHIT & YOOSEF
Equity valuations remain pricey despite correction

DESPITE ASTEEP correction in equity markets, India remains expensive compared to its peers. The market could remain expensive if the downgrades in profit estimates, post the earnings season, are significant.

From the peak of 18,477.05 on October 18, 2021, the Nifty closed at 16,240.30 on Wednesday, a fall of 12.1%. At its peak, the 50stock gauge was trading at a price earnings multiple (P/E) of 22.74 estimated one-year forward earnings, according to data sourced from Bloomberg. That P/E multiple has now come down to 17.93 times, closer to the ten-year average multiple of 16.79 times.

However, the multiple is higher compared with 16.4. times for the Jakarta Composite, 11.6 times for the Taiwan TAIEX and 10.1 times for the KOSPI. Other markets such as Shanghai Composite, Brazil are even less expensive.

This story is from the May 19, 2022 edition of Financial Express Mumbai.

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This story is from the May 19, 2022 edition of Financial Express Mumbai.

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