Source: Kotak Institutional Research Report
The Indian market (Nifty-50 Index basis) is trading at 21X FY2018E ‘EPS’ (free-float basis) and 17X FY2019E ‘EPS’.
Note that we project a very strong recovery in earnings in FY2019 after flat net profits in FY2018.
However, we have limited confidence in our FY2019E estimates given (1) little evidence of a strong turnaround in the economy, which can drive volume growth and (2) high margin and profitability assumptions in several sectors, which may be at risk.
