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:
- The analysis is based on the results of 30 out of 50 Nifty companies which have declared results so far.
- Earnings are improving and in the last one year, the stock prices have also shown increasing trend.
- Mostly when we are anticipating or going through a bull market, earnings tend to chase prices and so the valuations remain expensive.
- 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.
- We expect the markets to rise by 10-15% over the next 12 month period.
- Valuation-wise, markets are expensive; trading at PE multiple of 26.81 on trailing basis.
- 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.
- Fundamentally (besides valuations) things are looking good at macro level.
- 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.