| Sensex remains expensive against world market |
| Trading at historical P/E average earning downgrade to continue as pressure on low growth remains |
| B G Shirsat & Ashok Divase / Mumbai March 9, 2012, 0:17 IST |
The average price-to-earnings (P/E) ratio of the 30-scrip Bombay Stock Exchange benchmark, the Sensex, though currently just above the historical average of 15, has been at the higher side as compared to key world indices. Analysts estimate aggregate net profit at Rs 194,853 crore for 2011-12, which brings down the Sensex P/E marginally to 14.81 from the current 15.62.
For 2012-13, domestic and foreign brokerages expect the net profit of Sensex companies to grow around 14 per cent, to Rs 222,512 crore. So, at the current market capitalisation of Sensex companies, the one-year forward P/E is just around 13.
The European and US markets are comparatively cheap, trading at a P/E of 12-13 times earnings for calendar year 2011 and eight to 13 times for CY11. However, the earnings growth for US and European markets are likely to be double-digit, marginally below ours. According to a Bloomberg estimate, the earnings of Dow Jones companies are likely to be up 11.1 per cent in CY12, compared to 14 per cent for the 30-scrip Sensex. The index-based companies in England, Germany and France are expected to show earnings growth of 11-12 per cent in CY12.
| ESTIMATES FOR SENSEX COMPANIES | ||||
| Name | Sales (Rs crore) | Net profit (Rs crore) | ||
| FY 11-12 | FY 12-13 | FY 11-12 | FY 12-13 | |
| Bajaj Auto | 19751.47 | 22600.63 | 3152.8 | 3531.44 |
| Bharti Airtel | 71775.22 | 82483.76 | 4896.74 | 8133.2 |
| BHEL | 48481.66 | 49315.76 | 6462.33 | 6280.83 |
| Cipla | 7009.30 | 8022.72 | 1109.38 | 1339.09 |
| Coal India | 61743.62 | 67715.11 | 14658.40 | 16816.03 |
| DLF | 9545.13 | 10571.78 | 1438.23 | 1784.83 |
| GAIL | 39447.87 | 43662.90 | 3889.68 | 4107.76 |
| HDFC | 6060.90 | 7355.77 | 4020.37 | 4879.77 |
| HDFC Bank | 17448.92 | 21268.72 | 5157.95 | 6439.60 |
| Hero MotoCorp | 23187.23 | 26138.30 | 2386.11 | 2757.95 |
| Hindalco | 77579.57 | 80539.18 | 3100.16 | 3164.93 |
| HUL | 22752.47 | 25795.13 | 2698.59 | 3172.92 |
| ICICI Bank | 18078.79 | 21486.25 | 6365.50 | 7545.86 |
| Infosys | 34316.94 | 40234.47 | 8416.17 | 9843.22 |
| ITC | 24869.43 | 28735.17 | 5966.41 | 6808.99 |
| JSPL | 17257.85 | 19546.34 | 3989.73 | 4427.85 |
| L & T | 54040.38 | 61259.44 | 4240.50 | 4696.38 |
| M & M | 29891.70 | 34657.53 | 2666.44 | 2987.25 |
| Maruti Suzuki | 34821.80 | 42593.50 | 1508.28 | 2346.90 |
| NTPC | 61621.70 | 70797.24 | 8902.23 | 9724.55 |
| ONGC | 146602.30 | 162867.94 | 26887.29 | 28469.74 |
| Reliance Ind | 330858.54 | 327658.09 | 20712.11 | 21756.01 |
| SBI | 55552.24 | 62490.73 | 11437.92 | 14303.16 |
| Sterlite Ind | 39653.98 | 44617.93 | 5420.71 | 6153.16 |
| Sun Pharma | 7686.95 | 9015.70 | 2346.34 | 2706.71 |
| Tata Motors | 160261.79 | 181179.33 | 10600.79 | 11969.43 |
| Tata Power | 23556.35 | 27941.30 | ||
