Top 100 Stocks with a lowest P/E

The list is generated as on 29th August 2010

But at the same time it should be remembered that P/E is not only a single factor that should be checked or considered while purchasing a stock, there are other factors involved too such as the YoY profits of the company, EPS, etc..

1 Kutch Salt & Al P/E 0.12
2 Bhagyodaya Mark P/E 0.24
3 Shree Rani S P/E 0.27
4 Guj Poly AVX P/E 0.3
5 Coromandel Agro P/E 0.42
6 Centennial Sutu P/E 0.48
7 Ras Propack Lam P/E 0.52
8 Combat Drugs P/E 0.53
9 Rose Investment P/E 0.54
10 Hind Composites P/E 0.55
11 Hindustan Udyog P/E 0.6
12 Apte Amalgam P/E 0.75
13 Shalimar Wires P/E 0.76
14 Polar Ind P/E 0.78
15 Siddhartha Tube P/E 0.8
16 Rubfila Int P/E 0.8
17 Bombay Cycle P/E 0.98
18 Crystal Softwar P/E 0.99
19 Blue Circle Ser P/E 1
20 Mansi Financ P/E 1.06
21 JMDE Packaging P/E 1.07
22 Winro Commercia P/E 1.16
23 Eastern Sugar P/E 1.17
24 Zicom Security P/E 1.21
25 Compac Disc P/E 1.34
26 21st Cen Mgt P/E 1.35
27 Temptation Food P/E 1.46
28 Samtel Color P/E 1.48
29 Parekh Platinum P/E 1.55
30 Triveni Glass P/E 1.62
31 Sand Plast P/E 1.64
32 Sri Ramakrishna P/E 1.74
33 Morgan Ventures P/E 1.81
34 Zodiac Ventures P/E 1.96
35 Pioneer Embroi P/E 2.01
36 Rama Phosphates P/E 2.01
37 Pasupati Acrylo P/E 2.04
38 Adarsh Deriv P/E 2.05
39 Hytone Synth P/E 2.07
40 Remi Elektrotec P/E 2.08
41 Promact Plastic P/E 2.1
42 Benzo Petro Int P/E 2.12
43 Audichem P/E 2.19
44 Apollo Finvest P/E 2.23
45 Amal Products P/E 2.24
46 Euro Finmart P/E 2.31
47 Omnitex Ind P/E 2.33
48 Ponni Sugars(E) P/E 2.37
49 Taparia Tools P/E 2.39
50 Indian Acrylics P/E 2.39
51 Wallfort Fin P/E 2.41
52 Signet Ind P/E 2.41
53 DCM P/E 2.41
54 Sakthi Sugars P/E 2.42
55 Mazda P/E 2.44
56 JK Synthetics P/E 2.52
57 Cybele Ind P/E 2.59
58 Rana Sugars P/E 2.63
59 Punj Woolcomber P/E 2.78
60 Amraworld P/E 2.79
61 Uniroyal P/E 2.81
62 Spenta Inter P/E 2.84
63 Southern Ispat P/E 2.85
64 Oswal Overseas P/E 2.91
65 Vikas WSP P/E 2.93
66 Nidhi Granites P/E 2.98
67 Jaysynth Dyestu P/E 3.01
68 Nila Housing P/E 3.05
69 Hariyana Ship P/E 3.06
70 Aditya Forge P/E 3.09
71 National Steel P/E 3.1
72 Nakoda Textiles P/E 3.12
73 Flawless Diamon P/E 3.13
74 Ashiana Ispat P/E 3.15
75 Gowra Leasing & P/E 3.15
76 Rama Pulp P/E 3.17
77 Sambandam Spin P/E 3.2
78 Ankur Drugs P/E 3.21
79 Tarai Foods P/E 3.25
80 Machino Plastic P/E 3.28
81 Euro Leder P/E 3.3
82 Katwa Udyog P/E 3.32
83 Toshika Chemica P/E 3.33
84 Sanraa Media P/E 3.33
85 RPG Cables P/E 3.34
86 Venus Ventures P/E 3.34
87 Raasi Finance P/E 3.35
88 Inducto Stl P/E 3.37
89 Dhoot Ind Fin P/E 3.37
90 Gomti Finlease P/E 3.38
91 Consolidated Se P/E 3.38
92 Jam Shri Ranjit P/E 3.41
93 Thiru Arooran P/E 3.42
94 Subex P/E 3.43
95 Pochiraju Ind P/E 3.44
96 Orchid Chemical P/E 3.46
97 Avon Corporatio P/E 3.46
98 National Plasti P/E 3.47
99 Ficom Industrie P/E 3.48
100 Tamil JaiBharat P/E 3.5

Top 100 Stocks with a highest P/E

Following is the list of stocks having the maximum P/E (PE). The list is generated as on 29th August 2010. But at the same time it should be remembered that P/E is not only a single factor that should be checked or considered while purchasing a stock, there are other factors involved too such as the YoY profits of the company, EPS, etc..

1 Geefcee Fin P/E 7,200.00
2 Raghav Ind P/E 6,400.00
3 GMR Infra P/E 5,820.00
4 KGN Industries P/E 3,929.17
5 Shree Global Tr P/E 3,750.00
6 Gujarat Natural P/E 6,440.00
7 Padam Cotton P/E 3,050.00
8 SV Electricals P/E 2,707.50
9 Nikki Global Fi P/E 3,400.00
10 Kailash Ficom P/E 2,135.00
11 Sterlite Projec P/E 1,800.00
12 Dhanprayog Inv P/E 1,652.50
13 Kappac Pharma P/E 1,468.75
14 Incap Financial P/E 1,425.00
15 Paran P/E 1,371.43
16 Guj Capital Ven P/E 1,492.22
17 Kadamb Construc P/E 1,675.00
18 Veritas P/E 2,166.19
19 Sterling Inter P/E 6,787.50
20 Splash Media P/E 1,226.67
21 Sigrun Holdings P/E 1,205.00
22 Interlink Petro P/E 1,364.00
23 Avance Tech P/E 1,017.00
24 Mahan Industrie P/E 897
25 New Bombay Mill P/E 855
26 Oregon Commerci P/E 876.32
27 Dalal Street In P/E 801.62
28 Tatia Global P/E 771.67
29 Shricon Ind P/E 867.5
30 Unisys Soft P/E 763
31 Rockon Fintech P/E 745
32 Mefcom Agro Ind P/E 700
33 Shri Ganesh Spi P/E 697
34 Spectacle Ind P/E 719.29
35 Prabhav Indust P/E 755
36 Sunteck Realty P/E 661.05
37 Jai Hind Synth P/E 732.5
38 Devine Impex P/E 800
39 Rajath Finance P/E 630.61
40 MMTC Ltd P/E 586.15
41 Moongipa Capita P/E 1,242.50
42 Urja Global P/E 533.33
43 Robinson World P/E 2,545.00
44 Rich Capital P/E 693.64
45 Nilchem Capital P/E 500
46 Jindal Capital P/E 2,980.00
47 Virgo Global P/E 486
48 Prraneta Ind P/E 483.33
49 NCL Research P/E 633.33
50 JMD Telefilms P/E 462.96
51 Parichay Invest P/E 389.23
52 Poonam Pharma P/E 386
53 Well Pack Paper P/E 1,023.57
54 Akanksha Finves P/E 350
55 PFL Infotech P/E 783.75
56 Sanket Internat P/E 540
57 SVC Resources P/E 336.33
58 Kalpena Plastik P/E 418.75
59 Monnet P/E 2,280.00
60 Essar Sec P/E 317.39
61 Cubical Fin Ser P/E 354.38
62 Blue Blends Fin P/E 311.5
63 Indiabulls Real P/E 357.29
64 Shristi Infra P/E 329.67
65 Subuthi Finance P/E 553.85
66 Shree Nath Comm P/E 280
67 Siddha Venture P/E 269
68 Farmax India P/E 266.67
69 Dazzel Confi P/E 346.5
70 Pressure Sen Sy P/E 257
71 GVK Power P/E 243.42
72 Jaybharat Texti P/E 801.82
73 NovaGold Petro P/E 233.5
74 Ken Financial P/E 337.73
75 Escorts Finance P/E 906
76 Libord Sec P/E 221.67
77 IRB Infra P/E 218.46
78 Dunlop India P/E 523.08
79 Le Waterina Res P/E 216.5
80 Swarna Securite P/E 290.71
81 Pharmasia P/E 686.86
82 Linear Poly P/E 200
83 Bio Whitegold P/E 192
84 Zenu Infotech P/E 284.38
85 Hind Copper P/E 205.98
86 Sampada Chem P/E 184.39
87 Birla Capital P/E 182.5
88 Shri Krishna P/E 242.78
89 Longview Tea P/E 181.88
90 Upsurge Invest P/E 349.33
91 Sarthak Global P/E 296.79
92 Arihant Super P/E 171.99
93 MP Agro P/E 170
94 Arihant Tournes P/E 165.8
95 Amani Trading & P/E 161.29
96 Shree Rang Mark P/E 159.67
97 Karuturi Global P/E 187.73
98 Artillegenc Bio P/E 154
99 TRC Finance P/E 303.33
100 Intellivate Cap P/E 150.43

Top 100 Stocks with the Highest P/E - on Jun 16, 2010

Following is the list of stocks having the maximum P/E (PE). The list is generated as on 16th June 2010

But at the same time it should be remembered that P/E is not only a single factor that should be checked or considered while purchasing a stock, there are other factors involved too such as the YoY profits of the company, EPS, etc..

1 Paran P/E 13,041.67

2 Gujarat Natural P/E 9,090.00

3 Sampada Chem P/E 9,011.67

4 Geefcee Fin P/E 8,185.00

5 Sterling Inter P/E 7,330.00

6 Raghav Ind P/E 6,035.00

7 Intellivate Cap P/E 5,045.00

8 KGN Industries P/E 5,005.71

9 Sai Capital Ltd P/E 5,000.00

10 Nikki Global Fi P/E 4,500.00

11 Precision Elec P/E 4,405.00

12 OCL Iron P/E 4,225.00

13 Pharmasia P/E 4,216.67

14 Advani Hotels P/E 3,960.00

15 Shree Global Tr P/E 3,669.17

16 ACIL Cotton Ind P/E 3,205.00

17 Kailash Ficom P/E 3,170.00

18 Veritas P/E 2,967.40

19 Axon Infotech P/E 1,885.00

20 Prabhav Indust P/E 1,770.00

21 Incap Financial P/E 1,666.67

22 Tribhuvan House P/E 1,635.00

23 Elder Healthcar P/E 1,631.00

24 PVR P/E 1,578.00

25 DJS StockandSha P/E 1,575.00

26 Interlink Petro P/E 1,503.75

27 Splash Media P/E 1,403.77

28 GMR Infra P/E 1,400.00

29 Beta-Kappa Inve P/E 1,385.00

30 Well Pack Paper P/E 1,161.00

31 TRC Finance P/E 1,090.00

32 Jindal Capital P/E 1,050.00

33 Adarsh Plant P/E 1,047.00

34 Oregon Commerci P/E 996.58

35 Hinduja Foundri P/E 942.5

36 Sterlite Projec P/E 937.5

37 Shree Nath Comm P/E 860.47

38 Unisys Soft P/E 860

39 Aryaman Fin Ser P/E 855

40 Kosha Cubidor P/E 826.5

41 Preeti Sec P/E 788

42 MMTC Ltd P/E 761.15

43 Devine Impex P/E 741.67

44 Kadamb Construc P/E 739.17

45 Tatia Global P/E 735

46 Biopac India P/E 731.5

47 Samyak Intern P/E 720

48 Shricon Ind P/E 713.13

49 Zigma Software P/E 709

50 Prraneta Ind P/E 694.17

51 Sanket Internat P/E 650

52 Marathwada Refr P/E 632.93

53 Subuthi Finance P/E 625.77

54 Pithampur Steel P/E 609

55 Ritesh Prop P/E 593.33

56 Jaybharat Texti P/E 577.9

57 Dalal Street In P/E 572.78

58 Spectacle Ind P/E 565.22

59 Sunteck Realty P/E 555

60 Rockon Fintech P/E 550

61 Urja Global P/E 546.36

62 Nouveau Finance P/E 531

63 Essar Oil P/E 530

64 Sparc Systems P/E 525

65 JMD Telefilms P/E 523.41

66 Dunlop India P/E 519.62

67 BPL P/E 518.57

68 Avance Tech P/E 513

69 Websol Energy P/E 477.14

70 Kuvam Intl P/E 476.84

71 Dollex Ind P/E 472.5

72 Rajath Finance P/E 459.38

73 Indo-Asian Proj P/E 447.5

74 Jai Hind Synth P/E 438.33

75 PFL Infotech P/E 431.25

76 JSW Holdings P/E 430.68

77 SVC Resources P/E 428.49

78 Harringtons Ind P/E 422.62

79 Centum Electron P/E 419.42

80 Shriram Needle P/E 407.14

81 Subhkam Capital P/E 400.92

82 Gyan Developers P/E 389.8

83 ACE India P/E 389.44

84 South Latex P/E 375

85 BF Utilities P/E 363.87

86 Zenu Infotech P/E 348.75

87 Cambridge Tech P/E 339.17

88 Cat Technologie P/E 331

89 Crest Animation P/E 325.18

90 IO System P/E 311.88

91 Blue Blends Fin P/E 311.5

92 GVK Power P/E 309.29

93 Vertex Spinning P/E 308

94 Scenario Media P/E 307.81

95 Cubical Fin Ser P/E 303.33

96 Artillegenc Bio P/E 302

97 Hind Copper P/E 300.56

98 Swarna Securite P/E 298.57

99 Amalgamated Ele P/E 290.11

100 Elegant Flori P/E 290

How P/E can be manipulated by the Bosses?

P/E (Price to earnings Ratio) is one of the important statistic that we usually look at to measure how attractive the valuation of the stock currently is. This ratio indicates the A valuation of a company’s current share price compared to its per-share earnings. Hence it indicates how the company has progressed its earnings in the past years, and it is extrapolated to get the future earnings too. Buying shares having too high P/E is not acceptable at any cause. If P/E has such high importance among the investors, do you think the real per-share earning can be obtained so easily? Lets see here how the big owners of the companies can manipulated this vital P/E ratio, so as to make the stock look attractive than it actually is.

1. The company may show a big sizable number as per-share earning, but in the foot note it may take away a major part of it as special charges and there by reducing per-share earning. Sometimes the special charges may not be really so special, and it may show all its operating expenses and even losses as special charges.

2. Check whether the per-share earning you are taking for valuation is fully diluted. The company may have other convertibles which public generally convert if the situation is friendly. At any condition, you should only take the diluted earnings. Also if possible, check whether the company has any plans to dilute further, which may take away your piece of pie.

3. “Anticipated losses” which sometimes occurs in the foot notes whispers that in the coming financial year, the company expects losses. The company however may not show those losses when it really occurs, as it has already accounted for those losses. This may project a worst year for the company as not so worse one. Moreover, the tax savings they obtained do to the losses (the one anticipated) may enter the next years accounts as a part of net-income

4. Depreciation has always been a very big opportunity where the officials may give their prestidigitatory hand a handsome work. Consider that you have bought a computer for Rs.25K. In the first 2 or 3 years, the computer loses all its value, and hence after that period, there depreciated amount is very less. What I mean is, depreciation is always not the same, and there are very complicated and unique ways of calculation. I will be writing a separate article on depreciation alone very soon. Just check whether the company has changed its way of accounting depreciation. And sometimes changes in the depreciation accounting may defer income tax payments too.

5. Company also has the choice to either show the full charges of R&D in the current year, or it can amortize it to may years.

6. The company generally projects “pro forma” earnings, which shows you the profit the company would have made in case some bad/extrordinary event didn’t happen. Consider the case of the attack on hotel Taj few months back. It would have surely affected its current earnings, but long term scenario remaining the same. Using Pro forma in those cases makes absolute sense to get an over all long term pictuer. But there are companies which excludes preferred stock dividends, taxes paid, bad investments, etc, and shows a very attractive pro forma earning. Hence in general, its always better to forget about the pro forma earnings as more companies have come to misuse it, than guiding the stock holders.

7. Change in accounting principles all of a sudden must be a sign of causion. Will a company change its accounting principles unless the new principles helps to project itself in a better way?

8. The company’s operating expenditure may go in as capital expences thereby showing a better figure for the net income. This will increase the net assets of the company (the operating expences has become net assets in this case)

9. The company can devaluate its inventories (and show it as special events), so as to show that there is no accumulation of inventories year after year.

10. Assumption of Unreasonable interest rate from the pention funds, and can expect a great return from that itself. Check how other companies expect the interest rate to be, and make conclusions.

List of Low P/E Value Stocks in India

Here is a list of Large Cap Value stocks in Indian stock market that are currently trading at Low P/E ratios. In compiling this list the Banking & Financial Sector stocks are omitted. This is because value of stocks in Banking & Financial Sector can not gauged using P/E ratio. Also we limited the list to only companies that have a minimum of 1000Cr market cap, and so are established companies with a robust business model.

These stocks can provide good long term value to investors as they are trading at attractive valuations. Investing in these stock only after your own careful research.

Company	P/E
Hindustan Petroleum Corporation Ltd (HPCL)	2.52
Bharat Petroleum Corporation Ltd (BPCL)	4.56
Gujarat State Fertilizers & Chemicals Ltd.	4.77
J K Cement Ltd	5.07
Kesoram Industries Ltd	5.39
S R F Ltd	5.50
Indian Oil Corp Ltd (IOC)	5.71
Madras Cements Ltd	5.83
Birla Corporation Ltd	6.06
Strides Arcolab Ltd	6.39
Electrosteel Castings Ltd	6.70
Graphite India Ltd	6.71
Binani Cement Ltd	6.76
Great Eastern Shipping Co.Ltd	7.16
Heidelberg Cement India Ltd	7.35
Alok Industries Ltd	7.37
Prism Cement Ltd	7.42
Deepak Fertilizers & Petrochemicals Corp.Ltd	7.71
Gujarat Fluorochemicals Ltd	7.71
Shree Cement Ltd.	7.97
Geodesic Ltd	8.00
India Cements Ltd	8.10

Nifty Stocks lowest PE Values Highest PE Multiple 16 April 2010

PE Values are Important Fundamental Inicator For Stock market Players

They tend to buy low PE Companies with high Growth with a belief that buying low PE stocks will Give High returns

Below is the List of PE Values of All Nifty Stocks lined from Lowest to highest PE Values

Stock	PE Value
BPCL	4
RELIANCE COMM	5.9
JINDAL STEEL & POWER	7.9
PNB	9.2
ACC LIMITED	10.9
SBI	13.3
BHARTI AIRTEL	13.9
TATA STEEL	14.2
ONGC	14.5
AMBUJA CEMENT	14.9
SAIL	15.3
DLF LIMITED	17.7
UNITECH	17.8
JAIPRAKASH ASSO.	18
GAIL	18.2
STERLITE IND.	19.7
AXIS BANK	20.2
NTPC	20.9
HCL TECH.	21.7
HINDALCO	22
REL. INFRA	22.2
SIEMENS	22.2
IDEA CELLULAR	22.4
RELIANCE CAPITAL	22.5
TATA POWER	22.6
POWER GRID CORP.	22.7
KOTAK BANK	22.9
RELIANCE IND.	23
HIND. UNILEVER	23.1
SUN PHARMA	25.3
HERO HONDA	25.4
M&M	25.6
INFOSYS	25.7
IDFC	25.9
ICICI BANK	26.3
WIPRO	26.4
TCS	29
MARUTI SUZUKI	29.2
CIPLA	29.5
TATA MOTORS	29.7
ITC	29.8
HDFC	32.7
L&T	33.9
HDFC BANK	35.1
BHEL	37.9
ABB	39
CAIRN INDIA	76.5
RANBAXY	loss
RELIANCE POWER	Loss
SUZLON	Loss

A medium term analysis

Performance of Low PE and High PE Picks in Indian Markets NSE BSE From 2007 To Jan 2010 A medium term analysis:

on June 12, 2007 an article was published on TheIndia Street giving List of 10 Lowest PE and 10 highest PE Stocks

First See the List of High PE Stocks

High PE Shares are those shares on which investors/traders have High Confidence

During Bull Markets they are normally stocks of Day

every TV channel ,every Paper ,magazine features them

High PE Stocks
Company	Market Price	EPS	PE
GMR Infrastructure	512.7	1.34	382.61
UTV Software	468.1	1.54	303.96
shree Cements	1113.35	4.58	243.09
Eicher	264.95	1.18	224.53
Educomp Solutions	1,789.80	8.5	210.56
Zee Entertainment	277.4	1.53	181.31
Kotak Mahindra	568.85	3.73	152.51
Aban Offshore	2,886.15	19.45	148.39
Polaris Software	162.5	1.18	137.71
Glenmark Pharma	678.25	5.43	124.91

We built the table again after adjusting For Split/bonus etc and then Calculated returns From Pricesin June 2007 to 29 jan 2010
Assuming we had invested 10000 in each Scrip( For sake of Calculation only )

So what we see ?

These Stocks posted 25 .6 percent returns Comfortably beating 15.8 percent returns of Sensex

High PE Stocks
Company	Adjusted Market Price in june 2007	Price 29 jan 2010	invested	Current Value	% return
GMR Infrastructure	51.2	60.25	10000	11767.6	17.7
UTV Software	468.1	502	10000	10724.2	7.2
shree Cements	1113.35	2000	10000	17963.8	79.6
Eicher	264.95	564.5	10000	21305.9	113.1
Educomp Solutions	357.96	702.75	10000	19632.1	96.3
Zee Entertainment	277.4	258.95	10000	9334.9	-6.7
Kotak Mahindra	568.85	780.4	10000	13718.9	37.2
Aban Offshore	2,886.15	1205.05	10000	4175.3	-58.2
Polaris Software	162.5	159.9	10000	9840.0	-1.6
Glenmark Pharma	339.125	243	10000	7165.5	-28.3
			100000	125628.2	25.6
Sensex	14131	16357	100000	115752.6	15.8

Now Lets See What Were low PE Stocks in June 2007 ?

Low PE Stocks
Company	Market Price	EPS	P/E
Tube Investment	75.85	46.21	1.64
AIembic	60.3	27.66	2.18
Graphite India	52.95	20.59	2.57
Nahar Exports	26	9.64	2.7
Guj NRE Coke	58.9	20.53	2.87
Atul	84.5	27.99	3.02
Alps Industries	44.5	14.53	3.06
Ponni Sugars	43.7	13.6	3.21
KEI Industries	84	25.49	3.3
Abhishek Mills	45	12.93	3.48

These Stocks Were having no interest at that time
Lets See their returns After Adjusting Base price For bonus Splits

High PE Stocks
Company	Adjusted Market Price in june 2007	Price 29 jan 2010	invested	Current Value	% return
Tube Investment	75.85	74.45	10000	9815.4	-1.8
AIembic	60.30	45.05	10000	7471.0	-25.3
Graphite India	52.95	85.55	10000	16156.8	61.6
Nahar Exports	26.00	25.05	10000	9634.6	-3.7
Guj NRE Coke	42.07	72.65	10000	17268.3	72.7
Atul	84.50	81.8	10000	9680.5	-3.2
Alps Industries	44.50	12.05	10000	2707.9	-72.9
Ponni Sugars	43.70	148.95	10000	34084.7	240.8
KEI Industries	84.00	34.7	10000	4131.0	-58.7
Abhishek Mills	45.00	18.7	10000	4155.6	-58.4
			100000	115105.5	15.1
Sensex	14131	16357	100000	115752.6	15.8

Education sector firms: new investment destination for PE

The market for e-learning is growing at a healthy clip

Private equity firm Helix Investments Co. has invested about $10 million (Rs48.9 crore) in LearningMate Solutions Pvt. Ltd, a Mumbai-based provider of electronic learning solutions.

E-learning market is peaking speed of late.

LearningMate will use the equity infusion to expand in the US and India, said chief executive and co-founder Samudra Sen. The company currently employs 200 people.

For Helix Investments, this is its second investment in an education company. In August 2007, the firm invested $12 million in Mahesh Tutorials, a Mumbai-based test prep company.

Helix is an India-focused investment fund backed by members of the Cullman and Bloomingdale families of New York.

Companies in the education sector—either as a provider of technology and content solutions to the industry or a direct provider of education—have emerged as investment destinations for private equity firms.

The market for e-learning is growing at a healthy clip. In the US, there has been a move in recent times towards online and digital courses and away from printed text books, which is being supported by large government funding.

This has attracted private-equity interest in a market that is worth about $1 billion a year in the US alone and growing at an annual 40%, according to industry estimates. Some companies providing e-learning solutions are trading at price to equity multiples of 25 to 30 in Nasdaq, the well-known electronic stock market in the US.

Recently in the US, there has been a move towards online and digital courses

LearningMate, founded in 2001 by Sen and Atul Sabnis, was a part of Educomp Solutions Ltd. The company was hived off as a separate entity in 2003 and Educomp was bought out by the TC Group Llc., a private equity investor. Carlyle later exited the company.

Sen and Sabnis had earlier helped establish and manage e-learning content development for Aptech Ltd, which later came to be known as Mentorix Learning Technologies Pvt. Ltd.

LearningMate’s services include content development and solutions related to learning applications and learning management systems. The firm’s customers include publishing firms such as the McGraw-Hill Companies, Pearson Plc and Oxford University Press. It has offices in the US and the UK, besides India.

E-learning came into prominence when in April 2008 the entire 35% stake of UTI Ventures in Mysore-based e-learning solutions provider Excelsoft Technologies Pvt. Ltd was purchased by private equity fund DE Shaw and Co. Lp for $31 million.

UTI Ventures had in 2001 invested about $600,000 in Excelsoft Technologies Pvt. Ltd. In September last year, Excelsoft raised about $10 million by diluting 10% stake to Singapore-based Arohi Asset Management Pte Ltd.

Recently, Tutorvista, another education company, raised $19 million in its third round of funding from Pearson and existing investors Lightspeed Venture Partners and Manipal Education and Medical Group. TutorVista provides online tuitions to students in markets such as the US and the UK, besides India, while it also provides curriculum support and technology solutions to schools in India.

Some other companies funded by private equity companies include Hurix Systems Pvt. Ltd, backed by Helion Venture Partners Llc., and Brainvisa Technologies Pvt. Ltd, backed by Sequoia Capital India Advisors Pvt. Ltd.

The US and India-based e-publishing firm PreMedia Global USA Inc. is also entering the e-learning segment. The company raised $18 million from JM Financial India Fund, a joint venture between JM Financial Ltd and Old Lane Fund, which is owned by Citigroup Inc., in January 2008.

Stocks Trading At All-Time High P/E Ratio

Some of the stocks are trading at their all-time high price to earning ratio. Rise in stock price in a declining market normally passes off as a sign of healthy fundamentals. But when the Indian and global markets were into a free fall last year, there was almost no stock in the domestic market that bucked the trend on the basis of business performance. Should you buy stocks at very high P/E ratio? Let's try finding it out.

Even though NIfty at 4400 levels is still 50-60 per cent short of its all-time high of 6287 on 8 January 2008, market exuberance has led to many companies’ share prices raising their price to earnings (P/E) ratios — number of times the market price is more than the ‘earnings per share’ — to extremely high levels.

While in the western markets, P/Es don’t go above 100 even at the peak of a bull run, in India P/Es are already going past the 100 mark even though the market is nowhere near its peak. Between 1 May and 10 June, the rampage in the market has caused at least 10 P/Es to go past 100 (see ‘Significant Numbers’), the reigning leader being MMTC. Another 11 stocks had P/Es between 50 and 100, including Aditya Birla Nuvo, Kotak Mahindra Bank, IRB Infrastructure Developers, Jai Corp., Adani Enterprises and Television Eighteen India. P/Es aside, the traded prices of five Sensex or Nifty stocks and 10 BSE-200 index stocks have crossed their earlier all-time highs during this period. “Five index stocks out of 50 total index stocks is a decent number to warrant notice,” says Anand Tandon, head of equities at Brics Securities.


Fundamentals can only partly explain the euphoric sentiments. “It may be due to performance over expectations by the market from these companies in the next two years,” says Nandan Chakraborty, vice president-research at Enam Securities. The stocks reaching their all-time P/E or traded peaks are not from two or three sectors alone. They are spread out across five or six sectors. But sectors such as consumer goods and pharmaceuticals, which were not exactly the darlings of the stockmarket in the bull rally of 2006-07, are standing out in the ongoing current rally much more than others.

So are some other sectors. Realty and infrastructure stocks are still registering extreme valuations similar to what they did about two years ago. In two-wheelers, Hero Honda touched an all-time high of Rs 1,588 on 19 May. “In cement and auto sectors, the demand growth has been outstanding,” says Chakraborty. “Such sectors relatively did not participate in the 2007 bull rally and in last year’s bear phase, they got knocked out like every other stock.”


So, should investors buy stocks at P/Es of 50 and above? Is there any further momentum left in these stocks? Under the current circumstances, restraint may be better than adventurism to avoid the blood bath of the recent past.
Source: Businessworld Issue Dated 16-22 June 2009

8 key ratios to spot the right stocks

It's a very common dilemma for first time stock buyers. You want to invest in 'safe' stocks yet have no idea about the process involved. Should you trust your broker? Or should you trust the markets analysts. And at the end of the day you are left confused by the myriad of opinions and advices that are thrown at you.

Instead, why not understand the parameters yourself so that you can make the best choice? To help you understand the intricate art of choosing the best stocks to invest in, here are eight key ratios. Read on, understand�and happy investing!

Ploughback/reserves: Every year, a company divides its net profit (profit left after subtracting various expenses including taxes) in two portions: ploughback and dividends. While dividends are handed out to the shareholders, ploughback is kept by the company for its future use and is included in its reserves.

Ploughback is essential because besides boosting the company's reserves, it is a source of funds for the company's expansion plans. Hence if you are looking for a company with good growth prospects, check its ploughback figures.

Reserves are also known as shareholders' funds, since they belong to the shareholders. If a company's reserves are twice its equity capital it can then reward its shareholders with a generous bonus. Also any increase in reserves will push the share price of your share.

Book value per share: This ratio shows the worth of each share of a company as per the company's accounting books. It is calculated as:

Book Value per share = Shareholders' funds / Total quantity of equity shares issued

Shareholders' funds can be computed by subtracting the total liabilities (money owed to creditors) of the company from its total assets. It can also be calculated by adding the equity capital to the company's reserves.

Book value is an old record that uses the original purchase prices of the assets. However it doesn't show the present market price of the company's assets. As a result, this ratio has a restricted use when it comes to estimating the market price of the shares, but can give you an estimate of the minimum price of the company's shares. It will also help you judge if the share price is overpriced or under-priced.

Earnings per share (EPS): One of the most popular investment ratios, it can be computed as:

Earnings Per Share (EPS) = Profit Post Tax / Total quantity of equity shares issued

This ratio computes the company's earnings on a per share basis. E.g. you own 100 shares of ABC Co., each having a face value of Rs 10.

Assume the earnings per share is Rs 10 and the dividend declared is 30 per cent, or Rs 3 per share. This implies that on every share of ABC Co, you earn Rs. 6 each year, but you actually get Rs 3 via dividend. The balance of Rs 4 per share goes into the ploughback (retained earnings). Had you purchased these shares at par, it implies a return of 60 per cent.

This example shows that instead of looking at the dividends received from to company as the base of investment returns, always look at earnings per share, as it is the actual indicator of the returns earned by your shares.

Price earnings ratio (P/E): This ratio highlights the connection between the market price of a share and its EPS.

Price/Earnings Ratio (P/E) = Price of the share / Earnings per share

It shows the degree to which earnings of a share are protected by its price. E.g. if the P/E is 40, it means the share price is 40 times its earnings. So if the company's EPS is constant, it will need about 40 years to make up for the purchase price of the share, after taking into account the dividends and the capital appreciation. Hence low P/E means you will recover your money quickly.

P/E ratio shows what the market thinks about the earnings potential and future business forecast of a company. Companies with high P/E ratios are the darlings of the investors and thus enjoy a higher market rating.

In order to use the P/E ratio properly, take into account the future earnings and growth projections of the company. If the current P/E ratio is low, as against the future prospects of a company, then the shares make an attractive investment option.

But if the company is saddled with losses and falling sales, stay away from it, despite the low P/E ratio.

Dividend & yield: Dividend is the portion of the profit that is distributed amongst shareholders. Companies offering high dividends, normally don't have much of growth to talk about.

This is because the ploughback required to finance future development is insufficient. Similarly, those companies in high growth sector don't give any dividend. Instead here they give sharp capital appreciation, which ultimately will lead to higher dividends.

So it makes much more sense to invest for capital appreciation instead of dividends. Rather it makes more sense to invest for yield, which is nothing but the association between the dividends and the market price of the shares. Yield (dividend yield) can be calculated as:

Yield = (Dividend per share / market price of a share) x 100

Yield shows the returns in percentage that you can expect via dividends earned by your investment at the current market price. It is more useful than simply focusing on the dividends.

Return on capital employed (ROCE): ROCE is the ratio that is calculated as:

ROCE: Operating profit / capital employed (net value + debt)

To get operating profit, add old taxes paid, depreciation, special one-off expenses, and special one-off income and miscellaneous income to get the net profit. The operating profit is a far better indicator of the profits earned by the company instead of the net profit.

Hence this ratio is the better indicator of the general performance of the company and the company's operational efficiency. It is one of the most useful ratio that lets you compare amongst the companies.

Return on net worth (RONW): RONW is calculated as

RONW = Net Profit / Net Worth

This ratio gives you an idea of the returns generated by investing in the company. While ROCE is an effective measure to get a general overview of the profitability of the company's business operations, RONW lets you gauge the returns you can earn on your investment.

When used along with ROCE, you get an overview of the company's competence, financial standing and its capacity to generate returns on shareholders' finances and capital employed.

PEG ratio: PEG is an essential and extensively used ratio for calculating the inbuilt worth of a share. It helps you decide whether the share is under-priced, totally priced or overpriced.

To derive the ratio, you have to associate the P/E ratio with the expected growth rate of the company. It assumes that higher the growth rate of the company, higher the P/E ratio of the company's shares. Vice versa also holds true.

PEG = P/E / expected growth rate of the EPS of the company

In general, a PEG lesser than 0.5 is a lucrative investment opportunity. However if the PEG exceeds 1.5, it is time to sell.

These are some of the most critical ratios that must be considered when purchasing a share. Extensive reading of the financial performance of the company in newspapers and magazines will help you get all the relevant information to get the correct decision

Powered by