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Market valuations dispersion indicator is trading near -1.0 SD levels below mean, indicating market is
heading towards oversold territory
The valuation dispersion indicator has shown tendency to revert from+/- 1.5 S.D levels. High Z-score
indicates High value stocks outperforming low value stocks & vice versa.
Valuation dispersion calculation methodology: PE & PB factors across the universe ( BSE-200 stocks)
are ranked individually. The difference between the top & bottom deciles medians provides the factor
dispersion for each factor. Then a composite valuation dispersion based on an equal weighted average
PE & PB dispersion is derived. Valuation dispersions are expressed in z-scores terms (i.e. no. of
standard deviation away from the 1 year rolling mean).
The chart below shows the consensus earnings expectation for FY11 and FY12 decomposed into the
sector wise contribution towards the over all Nifty growth.
Strong contributors (FY11E) – Energy, Industrials
Weak contributors(FY11E) – Telecom, Cons Disc
Analyst estimates across the brokering industry play an important role in the performance of the
stocks
Upward and Downward revisions by the analyst community on the stock’s EPS, Price target and
rating provides a valuable insight.
The tables below display the estimates revised by the sell side analyst community
The universe contains the companies with minimum 6 to 8 analyst coverage and the
recommendation that have been revisited over last 1 to 3 months
A different approach to look at sector popularity and valuation.
For e.g.: On the below matrix, sectors in the bottom right quadrant are out of favor and undervalued,
whereas sectors in the top left quadrant are relatively overvalued and command higher than average
proportion of Buy recommendations
A different approach to look at sector popularity and valuation.
For e.g.: On the below matrix, sectors in the bottom right quadrant are out of favor and undervalued,
whereas sectors in the top left quadrant are relatively overvalued and command higher than average
proportion of Buy recommendations
Indicator compares one year sector forward estimate ( i.e.FY11 )with past three year historical forward estimates.
Analysis gives detail insights about sector valuation premium /discount.
Our universe covers BSE 200 stocks with GICS Industry group classification for sector basket. Stocks with three
years forward estimate history along with minimum 15 analyst coverage are included for the analysis.
PE Basis
Auto & parts (+46%), Food & Bev (+37%)
PB Basis
Food & Bev (+37%), Pharma & Bio (+35%)
Sector
Current Est. PE Vs. 3-years
Historical. Avg Forward PE
Auto & Parts 46%
Food &Bev 37%
H/H & Pers Products 29%
Banks 29%
Capital Goods 26%
Software & Services 23%
Pharm & Bio 23%
Energy 20%
Div Financials 15%
Materials 9%
Utilities -3%
Sector
Current Est. PB Vs. 3-years
Historical Avg Forward PB
Food &Bev 37%
Pharm & Bio 35%
Banks 30%
Software & Services 29%
Capital Goods 25%
Materials 24%
Auto & Parts 24%
Energy 19%
H/H & Pers Products 15%
Div Financials 10%
Utilities -4%
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Market valuations dispersion indicator is trading near -1.0 SD levels below mean, indicating market is
heading towards oversold territory
The valuation dispersion indicator has shown tendency to revert from+/- 1.5 S.D levels. High Z-score
indicates High value stocks outperforming low value stocks & vice versa.
Valuation dispersion calculation methodology: PE & PB factors across the universe ( BSE-200 stocks)
are ranked individually. The difference between the top & bottom deciles medians provides the factor
dispersion for each factor. Then a composite valuation dispersion based on an equal weighted average
PE & PB dispersion is derived. Valuation dispersions are expressed in z-scores terms (i.e. no. of
standard deviation away from the 1 year rolling mean).
The chart below shows the consensus earnings expectation for FY11 and FY12 decomposed into the
sector wise contribution towards the over all Nifty growth.
Strong contributors (FY11E) – Energy, Industrials
Weak contributors(FY11E) – Telecom, Cons Disc
Analyst estimates across the brokering industry play an important role in the performance of the
stocks
Upward and Downward revisions by the analyst community on the stock’s EPS, Price target and
rating provides a valuable insight.
The tables below display the estimates revised by the sell side analyst community
The universe contains the companies with minimum 6 to 8 analyst coverage and the
recommendation that have been revisited over last 1 to 3 months
A different approach to look at sector popularity and valuation.
For e.g.: On the below matrix, sectors in the bottom right quadrant are out of favor and undervalued,
whereas sectors in the top left quadrant are relatively overvalued and command higher than average
proportion of Buy recommendations
A different approach to look at sector popularity and valuation.
For e.g.: On the below matrix, sectors in the bottom right quadrant are out of favor and undervalued,
whereas sectors in the top left quadrant are relatively overvalued and command higher than average
proportion of Buy recommendations
Indicator compares one year sector forward estimate ( i.e.FY11 )with past three year historical forward estimates.
Analysis gives detail insights about sector valuation premium /discount.
Our universe covers BSE 200 stocks with GICS Industry group classification for sector basket. Stocks with three
years forward estimate history along with minimum 15 analyst coverage are included for the analysis.
PE Basis
Auto & parts (+46%), Food & Bev (+37%)
PB Basis
Food & Bev (+37%), Pharma & Bio (+35%)
Sector
Current Est. PE Vs. 3-years
Historical. Avg Forward PE
Auto & Parts 46%
Food &Bev 37%
H/H & Pers Products 29%
Banks 29%
Capital Goods 26%
Software & Services 23%
Pharm & Bio 23%
Energy 20%
Div Financials 15%
Materials 9%
Utilities -3%
Sector
Current Est. PB Vs. 3-years
Historical Avg Forward PB
Food &Bev 37%
Pharm & Bio 35%
Banks 30%
Software & Services 29%
Capital Goods 25%
Materials 24%
Auto & Parts 24%
Energy 19%
H/H & Pers Products 15%
Div Financials 10%
Utilities -4%
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