There is a problem with your method.8.5 P/E is basically no growth P/E which means company with no growth should deserve P/E of 8.5 but if you are taking average P/E then it’s double counting the growth.Let’s assume,If you are taking average P/E it means that P/E has growth expectations already from Nifty which basically depends mostly on nominal GDP growth.If you are taking multiplier with growth rate, you are double counting the growth.8.5 should be replenished with 1/Ke of India.In this era,These formulas are outdated because at that time Market capitalization was explained by tangibles.But in this contemporary era,where we are transforming from tangibles to intangibles,These formulas don’t work anymore.
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