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Charts & Analysis

Nifty Stocks: EPS not quite growing?

Going through the Nifty stocks as results poured in, and some startling facts:

Nifty Stocks: EPS not quite growing?

  • Of the 50, 24 have contracted EPS. Meaning earning per share is less than the year earlier.
  • Current Nifty P/E is 20. Of the 50 stocks, a total of 39 stocks have grown EPS < 20% y-o-y.
  • With the new calculations of Nifty weights (based on free float) the EPS drops nearly Rs. 4 for Nifty as a whole. So Nifty EPS today is 215 versus around 220 as calculated before the nifty weight.
  • Last year at this time the Nifty EPS was 234. So as an index the Nifty has dropped 8% on EPS in a year.
  • There are some more stock issuances, QIPs, dilution like CCPS in Tata Steel, and so on. This is going to hurt EPS even more.
  • Bank EPS still seems to be strong in terms of growth.

Bank EPS will only move down if banks will recognise losses as they happen – some of the default story is yet to come.

I’ve used consolidated EPS where I could get info, and standalone where I couldn’t. In that, this calcuation differs from NSE (which takes only standalone into consideration for Nifty P/E and EPS calculations)

Will be an interesting budget tomorrow. Let’s see how that goes.

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