Market racing far ahead of India Inc's earningsB G Shirsat / Mumbai February 10, 2006The stock market is currently trading at a price-to-earnings multiple (P/E) of 16.65 times to its trailing twelve-month (TTM) earnings ended December 2005. A year back, the stock market was valued at 13.24 times of its TTM earnings ended December 2004.The average P/E is arrived at by dividing the collective market capitalisation of the companies studied by the Business Standard Research Bureau with the total net profit earned by them in the trailing 12 months ended December 2005.The study has covered as many as 1,613 companies belonging to the manufacturing and the services sectors. However, it has not taken into account the firms that announced net losses in December 2005.While the net profit of the corporate sector for the trailing 12 months ended December 2005 rose 21.56 per cent, the market value of traded stocks shot up by almost 50 per cent. The P/E ratio for the BSE Sensex stocks is moving ahead of the market with the 30-scrip Sensex currently trading at a P/E of 18.42. A year ago, Sensex stocks were valued at 15.61 times. S&P CNX Nifty also witnessed a rise in valuation with the P/E moving up from 14.05 times a year ago to the current level P/E of 16.80.In contrast, Hong Kong Hangseng
