With Nifty correcting 2000++ points (10-15%) from the Top, Midcaps and Small Caps correcting 20-25% , The question that most of the investors and even traders ask and wonder - Aur kitna girega ?
There are so many factors involved which have to be taken into consideration.
1. PE Ratio - Comfort in Valuation emerging ?
Source : https://nifty-pe-ratio.com/
The Current PE level is near 21.35 which is near about the historic average zone of 22-23. What needs to be considered though is how the next 12 month earnings growth is going to be and the impacts headwinds like Inflation, War have on markets.
Assuming worst case scenario in terms of impact by war and Inflation, it would be safe to assume that we have a cushion of maybe 5-7% more fall in the index.
My Assessment : With the worst being factored in, we are reaching the levels where value should definitely emerge in the indices.
As we can’t take invest only on basis of PE ratio, I’ll also try to share the other studies whichever are relevant to the topic here in this thread.
Do share your views and studies about how you are currently viewing nifty’s valuation.
