Without using technical chart is it possible to calculate a stock price ?
Yes…As price is directly related to earnings,it can be determined from the company’s earning
Taking the example of Axis Bank::
Total Market Cap is 370284.09 crore, considering total market cap and not free float, because for calculating P/E ratio total market cap is used.
To calculate the P/E ratio , annualised earning is required i.e the sum of last four quaters…
Anuualised earning = (6071.11 + 7129.67 + 6034.64 + 6917.57 ) crores= 26152.41 crores
Now P/E ratio = Total Market Cap / Annualised Earning
= 370284.09 / 26152.42
=14.15
P/E ratio is also calculated by the formula, P/E = Stock Price / Annualised EPS
Annualised EPS = sum of all EPS from last four quaters (from the above snapshot)
Annualised EPS= (19.69+23.11+19.54+22.37)=84.57
As P/E ratio= Stock Price / Annualised EPS
Therefore, Stock price = P/E ratio * Annualised EPS
Putting the values calculated earlier into above equation,
Stock Price = 14.15 * 84.57 = 1196.66 which is aprx equal to 1196 in technical chart
Stock price can also be calculated by other methods…
I hope this is helpful to new market partcipants …