We are positive on a range of domestic cyclical stocks and quality mid-caps where there is still upside left in terms of value and where earnings outlook remains strong. Amongst sectors we like, banking is one of the preferred sectors as plays on the overall economic revival story. We like both private and PSU banks – private banks in anticipation of continued structural market share gains and PSU banks as beneficiaries of improving asset quality and lower interest rates. We also like stocks in the tyres and auto ancillary space owing to recovery in auto sales volumes and improving margins. We are positive on cement stocks, on similar expectations of economic revival and more specifically, pick-up in infrastructure and construction activity due to the government’s focus. We particularly like smaller regional cement players as their valuations still look compelling.
Reliance industries ltd has market capitalisation of 309,826.55 crore with avg. quarterly profit of more than 5000 crore in last years. The PE is 13.91 against industry PE of 18.25. The dividend the company pays is also very good and is around 95% annual. The annual growth of the company is also very good including EBITDA margin and all. The price of its share (current price of rs. 957)showed practically no change from NOV’2009 till date.The book value is RS. 609
While on the other hand a company like symphony f total market capitalisation of 5132 crores only (equal to the quarterly profit of reliance industries) has current share price of rs.1465. The annual growth and all is also very good with this company. The PE is 51 which is very high as compared to Reliance. The face value of symphony is also 2 as compared to the face value of reliance which is 10. The annual growth and all is also very good with this company. The book value is RS. 66 only.
I just want to know why this difference in stock price? Anyone who can justify it?
PS: I am no AMBANI fan.
Suman,
This is not Apple to Apple comparison. How can you compare 2 different sectoral stocks with each other? You will definately get the big difference in that case.