Nifty 50 Earnings – FY 2018 & Q4 – Analysis

On year-on-year basis (from FY 2017 to FY 2018) earnings* showed a growth of 9.01%. In comparison, average stock prices went up by 17.31% during the same period**.

*Based on 30 companies which have declared the results

**Based on stock prices as on 16th May for each year.

Current PE Valuation of the Nifty = 26.81

Key Points about Nifty Results Analysis:

  1. The analysis is based on the results of 30 out of 50 Nifty companies which have declared results so far.
  2. Earnings are improving and in the last one year, the stock prices have also shown increasing trend.
  3. Mostly when we are anticipating or going through a bull market, earnings tend to chase prices and so the valuations remain expensive.
  4. On year-on-year basis there is an average growth of 9.01% in terms of profitability. And Nifty has gone up by 17.31 % during the same period.
  5. We expect the markets to rise by 10-15% over the next 12 month period.
  6. Valuation-wise, markets are expensive; trading at PE multiple of 26.81 on trailing basis.
  7. The broad analysis shows mixed bag of earnings from companies within a single sector like automobiles, IT and banking  – some players have done well while others have lagged behind.
  8. Fundamentally (besides valuations) things are looking good at macro level. 
  9. Fun Fact: If you remove Axis Bank, Lupin and Bharti Airtel from the above, the remaining 27 companies earnings have improved over 19% y-o-y.

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