One third of NSE 500 stocks now trade below their pre-Covid levels. Their price-to-earnings (PE) and price-to-book (P/B) ratios show this. Blue-chip companies like HDFC Bank, Bharti Airtel, and Maruti Suzuki are 10-60% cheaper. This makes them potential value buys despite recent market corrections.
Since October 1, the market has dropped sharply. Many blue-chip companies are now 10-60% below March 2020 levels by key metrics. These companies include HDFC Bank, Bharti Airtel, ICICI Bank, State Bank of India (SBI), Hindustan Unilever (HUL), Bajaj Finance, Kotak Mahindra Bank, Maruti Suzuki, Axis Bank, Bajaj Finserv, Avenue Supermarts, Coal India, and Asian Paints.
For banks, the price-to-book ratio determines their valuation. Higher PE and PB ratios usually mean a company is more expensively valued. Some stocks corrected due to weaker earnings. Others performed well over five years, but this isn’t shown in their valuation.
Out of 414 NSE 500 stocks, 120 are below pre-pandemic levels. India’s market valuation has been shrinking over the past three quarters due to stagnant earnings.
