Nifty Stocks Trade Higher Than Value

The Economic Times - - Markets & Finance - Tar­get Price (`) CMP (`) Dif­fer­ence (%) Nifty Weight (%)

Bro­ker­ages have re-rated In­dian eq­ui­ties and raised the in­dex tar­get as much as 10-15% on the back of a his­toric win by BJP in the na­tional polls. But con­sen­sus 12-month tar­get prices of Nifty con­stituents are lag­ging way be­hind re­vised in­dex tar­gets. Ac­cord­ing to Bloomberg data, 28 Nifty con­stituents are trad­ing higher than their con­sen­sus 12-month tar­get price, which im­plies that these stocks are trad­ing higher than their in­trin­sic value com­puted on the ba­sis of their fun­da­men­tals pan­ning over the next one year. These 28 stocks com­mand a 45% weight in the Nifty and in­clude heavy­weight stocks such as L&T, RIL, ONGC, and Tata Mo­tors. For in­stance, L&T has a 12-month con­sen­sus tar­get price of ` 1,425, while the stock is now trad­ing at ` 1,513. This means the stock is trad­ing 6% higher than its fair value. In­ter­est­ingly, in some Nifty con­stituents such as NMDC, BHEL, Sesa Ster­lite and Hin­dalco, there is an upside of only 4-15% even if one con­sid­ers the most op­ti­mistic tar­get price of a sell side, said an an­a­lyst. Nifty con­stituents trad­ing higher than 12-mth tar­get price

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.