Was just looking at Differentials between US listed companies and the Indian subs of the same for research purposes over the last week.
Cummins Inc
Market Cap: $37 B
Revenue: $32 B
Net Income: $1.94 B
ROE: 19.6%
P/S: 1.3
PE: 18
Cummins India
Market Cap: $12B
Revenue: ~$1.1 B
PAT: ~$200 Million (other income of $50 million)
ROE: 28.8%
P/S: 12
PE: 63
Yes, Indian sub is growing faster at 30% vs 10% but P/S and PE are out of whack. And historical PE ratio is approximately 32. Yes, I know about CPCB4 series on engines.
Same story for ABB, Siemens, Hitachi and others where Indian subs are at PE of 80/100/120 vs Main company at sub 20 PE. The entire cap good space is indefensible in terms of pricing. Below I have attached chart for NSE MNC index PE ratio
The Green line refers to PE ratio and is almost touching 50 now. Would love alternative comments on this.
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