According to a report by domestic brokerage company Motilal Oswal, the two-thirds of the regional indices are still trading above their 10-year average P/E multiple, despite a fall of more than 10 percent in benchmark indices in benchmark indices. The areas trading at the highest premium include infrastructure, utilities and consumer durables. In contrast, media, bank and vehicle companies are trading on a decline against their historic average.
In major areas, IT is trading above, while banks are available with discounts. Consumer shares are trading largely to their long -term average.
The IT sector is trading at 31 percent premium with a PE ratio of 27.6 times. This boom is due to the third quarter results upgrade from several software exporters. Motilal Oswal says, ‘Commentary in some areas has become positive and we believe that improvement in technical expenses (mainly operated by BFSI in the last six months) is now growing in other areas such as high-tech and retail. ‘
Private banks are currently trading at a price-to-book (P/B) ratio of 2.2 times the historic average of 2.5 times, indicating a decline. Brokerage has said, ‘The debt growth is at 11.5 per cent, which is less than a high level of 18 per cent, as the deposit market remains attractive. In addition, the elevated debt-ratio ratio is affecting the debt growth, while the pressure in unsecured loans remains. Deposit growth remained stable, while negative trends may be seen in the CASA ratio amidst the speed in fixed deposits. ,
The PE and PB ratios of the consumer sector are currently at 42.9 times and 10.4 times, which correspond to their 10 -year average. However, the region has faced many challenges, including continuous pressure in demand improvement. The margin is also under pressure due to high food inflation and rising prices of palm oil. To reduce this pressures, companies are emphasizing on the rise in prices.