Investments, Merchandise Exports Driving Economic Recovery; Related Stocks Reasonably Valued: ICICI Securities

Stock figures on a screen. (Photographer: Kiyoshi Ota/Bloomberg)

Investments, Merchandise Exports Driving Economic Recovery; Related Stocks Reasonably Valued: ICICI Securities

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

ICICI Securities Report

Despite the high price-to-earnings ratio (trailing 29.9 times, forward earnings at 20.4 times), the trailing price-to-book ratio is still reasonable at marginally above the long-term average of 3.1 times, which reflects two decade low profitability in terms of trailing return on equity at 11.9% for the Nifty50 index.

However, for FY21, corporate profit cycle in the listed space is turning and improved to a seven-year high of 3.1% of gross domestic product while the earnings growth of the Nifty50 index defied a technical recession to grow in mid-teens largely driven by cyclicals.

Click on the attachment to read the full report:

ICICI Securities Strategy Weekly Memo 13 July 2021.pdf

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