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Charts & Analysis

Chart Of The Day: Nifty EPS Growth Plummets to 10%

The Nifty Earnings Per Share stands at Rs. 276.25, which translates to a dramatically low 10.23% growth in EPS since Nov 21 last year.

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The Price to Earnings Ratio, or P/E has dipped to below 18 (it’s at 17.42 on Nov 21, 2011)

EPS growth has tanked in the September quarter, which is partly due to a great 2010 September. The EPS last year, same time, was Rs. 250.

While these are standalone earnings only, the consolidated earnings situation seems to be even worse this time. I will put that data in a separate post.

Also see Normalized EPS (that is, PE last year which is supposed to have predicted EPS growth this year)

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The wider the gap, the greater the overvaluation last year. If you consider that the Nifty P/E is still 18 and we are likely to see an EPS contraction due to high inflation and a worldwide crisis, the Nifty remains overvalued today.