Adani Group firms' valuation premium over Sensex surges to new high

The overtaking happened in the first half of FY21 and the group stocks continued to become expensive compared to the broader market

As the Adani Group companies continue to scale new heights on the bourses, they are becoming expensive compared to the broader market.

The seven listed group stocks are trading at a trailing price-to-earnings (P/E) multiple of 109.2X, which is nearly five times the Sensex companies’ average trailing P/E of 22.9X on Tuesday.

This is the group’s highest valuation premium over the index (see the adjoining chart).

The group companies reported combined net profits of Rs 17,676.3 crore during the trailing 12 months ended June this year against their market capitalisation of Rs 19.3 trillion on Tuesday.

There has been a decline in the P/E