marketanalyst wrote:As per the quarter ended from 30.09.2010 reports Earnings 64,301,732
Expected growth in earnings for quarter ended 31.12.2010 65%
Expected earnings 106,097,858
No. of shares in issue 223,732,169
Expected EPS. 0.47
EPS (0.47*4). 1.88
Health care sector P/E ratio 34.21
Intrinsic Value of a share (1.88 * 34.21) Rs. 64.30
Current Market Price Rs. 38.90
Therefore, price is under valued heavily.
With the growth rate identified in revenue from quarterly reports published previously, it is obvious that the growth rate exceeds 65%
This is my view. Analyse yourself and make the decision.
These days FD rate is around 7%
if you invest 100 in FD you get 7
If you invest stock market
Value = Stock Price / EPS <= 100/7
then P/E Ratio <= 14.28
which is more than 14.28 Highly over value. Investing in FD no Risk (But there also Risk Invisible Risk)
which is Under value Share P/E , 6 - 10
Highly Under Value Shares P/E < 6
then 10-14 is Valued share according to Risk and Expansion.
Now you compare Sector P/E 36
and saying to that share is Under Value
"aiy meke inne thanakola kana gonnuda"
if you think its Under Value you can think.
habai Suba Anagathayak .......!
Final Thing Under Value or Over Value is defined by using past Performance
Future expectations is a "Dream"