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Commentary

India Has Highest P/E Among BRIC + Links

India seems to be the most expensive BRIC country in terms of P/E, going by FT: (HT @deepakmohoni)

 

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This is of course much to do with how the the index is constructed but the thing remains that we’re expensive in comparison. However the growth might just be bigger in India and therefore, the P/E is justified, but I personally don’t think so.

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Ritholtz talks about how commenters add unnecessary noise to articles on the web. And thus, why it’s probably useful to just disable comments. (And he gets more than 500,000 uniques a month! This is great, helps my aspirations!)

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  • piyush modi says:

    Well a good idea might to be look at historically how has the ratio been compared to other BRIC countries. You might find that India has consistently had higher index multiples. Two possible reasons –
    1. For Russia and Brazil – commodity exports are a very large part of the economy. Commodity companies typically trade at much lower multiples. Look at multiples of steel companies.. or cement..
    2. India has much better ROE. Its a lesser known fact, but one key determinant of higher PE ratios are higher ROEs, and here Indian firms beat other countries by a decent margin.

  • Statspotting says:

    The INR is fast turning into something like the currency used in ‘Monopoly’. No real value whatsoever. Everything is inflated – expectations, PEs, and of course prices of everything.
    http://statspotting.com/india-vs-us-inflation-comparison-chart/
    This could be the biggest story so far where expectations went awry.