Just a query…Generally everybody says that in the long run, Share Price should follow the earnings. If that is so, Muthoot Net profit CAGR for 10 years is 16% while its share price CAGR for 10 years is 24 %…Now since the business is stable and secure, may be 2% difference is understandable but why 8% difference??
similarly for Pidilite, 10 years Profit CAGR is 14% while 10 years CAGR for share price is 30%…Why so much anamoly? or I am missing something…same is the case with Nestle.
In muthoot case, is it reverting to mean? And if so, does it mean that even pidilite and nestle will also revert to mean in near future?
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