The price-to-earnings (P/E) ratio is a financial metric that compares a company’s current share price to its earnings per share (EPS). It helps investors assess whether a stock is overvalued or undervalued relative to its earnings, offering insights into the company’s growth potential and market sentiment.
A good P/E ratio typically ranges from 15 to 50, depending on the industry. A lower P/E may indicate undervaluation, while a higher P/E can suggest overvaluation or strong growth expectations. Comparing a company’s P/E to its peers and historical averages provides essential context for better investment decisions.
1. Nykaa (FSN E-commerce Ventures Ltd)
PE (Price to Earnings Per Share Ratio): 1,298
FSN E-commerce Ventures Ltd. popularly known as “Nykaa” is a digitally native consumer technology platform, that delivers a content-led, lifestyle retail experience to consumers. The company has a diverse portfolio of beauty, personal care, and fashion products, including owned brand products manufactured by it.
Nykaa is the largest specialty beauty and personal care platform in India in terms of the value of products sold in FY21 and one of the fastest-growing fashion platforms in India based on growth in GMV. It has the highest average order value (AOV) among leading online beauty and personal care platforms in India.
2. Allied Blenders & Distillers Ltd
PE (Price to Earnings Per Share Ratio): 3,737
Incorporated in 2008, Allied Blenders and Distillers is an Indian-made foreign liquor company offering four categories: whisky, brandy, rum, and vodka. Leading Liquor Manufacturer. Allied Blenders and Distillers is the third-largest Indian-made foreign liquor (IMFL) company by annual sales volumes from FY14 to FY22 with an 11.8% market share in the Indian whisky market in FY23.
It is one of only four spirits companies in India with a pan-India sales and distribution footprint. As of March 31, 2023, its products were sold in 79,329 retail outlets across 30 states and union territories. As of December 31, 2023, its product portfolio comprised 16 major brands across five main categories of IMFL, i.e., whisky, brandy, rum, vodka, and gin. The company also sells packaged drinking water under Officer’s Choice, Officer’s Choice Blue, and Sterling Reserve brands.
3. Bharat Global Developers Ltd (KKRRAFTON DEVELOPERS)
PE (Price to Earnings Per Share Ratio): 1,199
KKRRAFTON DEVELOPERS, a public limited company incorporated on June 15th, 1992 in Ahmedabad is a pioneering enterprise dedicated to facilitating global trade across diverse business sectors. With a keen focus on efficiency, reliability, and innovation, we specialize in sourcing, importing, and exporting a wide array of products spanning industries such as textile, agriculture, consumer goods, and beyond.
4. Eraaya Lifespaces Ltd
PE (Price to Earnings Per Share Ratio): 3,455
Incorporated in 1967, Just Ride Enterprises Ltd is in the business of digital marketing services
JREL (previously known as Tobu Enterprises Private Ltd) is a manufacturer and seller of engineering goods, automobile parts, indigenously made bicycles, and deals in securities.
The company has the following business divisions: Manufacturing Division: The company is a manufacturer of Bicycles, engineering goods, automobile parts, toys, etc. Trading Division: The company is a trader, merchant, commission agent, buying & selling agent, contractor, importer, and exporter of all types of engineering goods and electrical appliances including motors, insulators, refrigerators, etc. Securities: The company also deals in shares or securities of all kinds including loans, debentures, promissory notes
Also read…
5. Fischer Medical Ventures Ltd
PE (Price to Earnings Per Share Ratio): 1,832
Incorporated in 1993, Fischer Chemic Ltd does trading of chemicals and machinery. The company is in the business of processing, manufacturing, and trading of Laboratory Grade Chemicals. Fischer MVL specializes in producing cost-efficient Magnetic Resonance Imaging (MRI) systems and is the first company to manufacture such advanced medical imaging equipment indigenously in India through its wholly-owned subsidiary,
Conclusion
Companies with extremely high P/E ratios often signal unique market dynamics and growth expectations. These businesses, spanning diverse sectors from e-commerce to
medical technology, attract investor interest despite their unconventional valuations. However, investors should carefully evaluate the underlying business fundamentals and growth potential. Moreover, market sentiment and future earnings projections play crucial roles in justifying such high multiples.
Additionally, factors like market leadership, innovative business models, and sector-specific characteristics influence these elevated valuations. Therefore, thorough research and risk assessment become essential before investing in such high P/E stocks.
Written By: Dipangshu Kundu
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
Start Your Stock Market Journey Today!
Want to learn Stock Market trading and Investing? Make sure to check out exclusive Stock Market courses by FinGrad, the learning initiative by Trade Brains. You can enroll in FREE courses and webinars available on FinGrad today and get ahead in your trading career. Join now!!
