India’s benchmark index - Sensex is on a massive bull-run for last six months and is continuously breaking new records. Sensex crossed the 38,000 mark on 9 Aug 2018 and is inching closer towards the 39,000 level.
If we look at the Price-to-earnings (P/E) ratio of the 30 stocks which makes up the Sensex, 21 out of these companies are trading at an expensive valuation, according to the financial investment research platform – MarketsMojo.
Oil-to-telecom conglomerate - Reliance Industries is currently trading at a P/E ratio of 22.17 times and has been listed under the grade of ‘Very Expensive’ valuation by MarketsMojo. The share price of the company has moved up around 57 percent in last one year and on the other hand, its earnings increased by 17.32 percent during the same period, according to data compiled by MarketsMojo.
Sensex includes seven banking stock and barring three, all these banking stocks are trading at a ‘Very expensive’ valuation. For instance, private sector bank - ICICI Bank, saw its share price increasing by 14.5 percent while earnings declining by 52 percent in the last one year. The stock is currently trading at a PE ratio of 48.07 times.
Other banks trading at a ‘Very Expensive’ valuation are Axis Bank, SBI and Kotak Mahindra Bank. While, Yes Bank and IndusInd Bank are being traded at an ‘Attractive’ valuation with a P/E ratio of 18.47 time and 29.63 times respectively and HDFC Bank with a P/E ratio of 30.79 is categories as a ‘Fair’ valuation stock, according to MarketsMojo data.
Among IT stocks, TCS is considered overvalued and listed as ‘Very Expensive’ valuation stock with a P/E ratio of 29.25. While it’s per Infosys is categorized under ‘Fair’ valuation with a P/E ratio of 19.16 and Wipro is listed as ‘Attractive’ valuation stock with a P/E of 16.75.
Other Sensex constituent companies which are trading at an ‘Attractive’ valuation according to MarketsMojo are – Hero MotoCorp, Bajaj Auto and Vedanta.
First Published: Sept 3, 2018 2:47 PM IST
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