PE ratio for Banking Stocks
This query is : Resolved
05 May 2010
There is a huge difference in the Price to earnings (PE) ratio of the Banks in the Public sector and the Private Sector.
The PE of the banks like SBI, PNB, BOB Ranges from 7-9 and that of Banks like ICICI, HDFC, Axis ranges from 20-25.
What does the market consider while pricing the Private Sector Banks and is there any specific reason for such difference in the valuation?
The PE of the banks like SBI, PNB, BOB Ranges from 7-9 and that of Banks like ICICI, HDFC, Axis ranges from 20-25.
What does the market consider while pricing the Private Sector Banks and is there any specific reason for such difference in the valuation?
05 May 2010
We all know how management differ between Government companies and Private companies.
Government companies are run with Conservative Concept and Private Companies run with Modern concept.
For example, ICICI bank open a branch within 7 days !
Recently RBI has permitted to appoint "Banking Representative" in rural areas so that huge possibilities are there for private banks to grow at much faster pace.
Where there will be a high growth possibilities in near future; the stocks will be quoted at higher PE Ratio.
Where there is no growth i.e. only Steady Returns; these shares will be quoted at low PE Ratio.
Government companies are run with Conservative Concept and Private Companies run with Modern concept.
For example, ICICI bank open a branch within 7 days !
Recently RBI has permitted to appoint "Banking Representative" in rural areas so that huge possibilities are there for private banks to grow at much faster pace.
Where there will be a high growth possibilities in near future; the stocks will be quoted at higher PE Ratio.
Where there is no growth i.e. only Steady Returns; these shares will be quoted at low PE Ratio.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- ITR 2 Short Term gain & Long term gain
- Reporting Income under Section 44ADA
- Off Market debit and credit transaction
- Itr 1 processing
- Share accounting-->fifo - capital gain - period as per fifo?
- INCOME TAX ON REDEVELOPEMENT OF FLAT
- ITR returnFY25-26
- Short Term Capital gain on shares bought and sold after 2018 onwards
- ITR validation error - Balance sheet is not filled
- ITR 1: Details for showing Exempt Income
- Article ship defecit
- Opting out" of regime provided under subsection (1A) of Section 115BAC but Form 10IEA is not filed.
- Difference in tax comparison report
- Gst invoice numbering and delivery challan numbering
- Sales amount in Gstr1
- E Commerce GSTR1 & 3B how to file
- GST Cancellation without jurisdiction
- Legal Opinion on Registrar's Refusal to Investigate a Society for Non-Renewal and Non-Compliance
- GST Refund_RFD-01
- Form10BD was uploaded successfully without any Error but after 24 hours, Form10BE are not available
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
