Nifty P/E up 20%; discretionary, energy stocks see maximum expansion

Utilities and public sector banks are the two only pockets to see contraction in P/E

The benchmark Nifty is currently up 13 per cent on a year-to-date basis. However, the 12-month forward price-to-earnings (P/E) multiples for the index has shot up nearly 20 per cent during the same period. In other words, the rise in the stocks has been much higher than the 2021 earnings growth estimates for the underlying stocks. Within the market, the discretionary, energy, and information technology (IT) sectors have seen the maximum expansion in their P/E multiples, shows an analysis done by Credit Suisse. On the other hand, utilities and public sector banks are the two only pockets to see contraction