Gautam Adani: What is PE ratio? Adani stocks are overpriced but… – gautam adani stocks with higher pe ratios see steeper fall

There has been a slight decline in these stocks

According to the price-to-earnings ie PE, the stocks which had relatively low valuations have fallen less. ACC, which had a PE ratio of 54, declined the least (26%) among the 10 Adani Group stocks. It is followed by Adani Ports (27%) and Ambuja Cements (31%). The PE ratio of a company is an indicator of how much a scrip is undervalued or overvalued in relation to its earnings. Technology and consumer brands other than technology and consumer brands and other high growth companies typically command higher valuations than infrastructure or state-owned companies. For example, TCS has a PE ratio of 31, but Tata Steel has 5. The PE ratio of Indraprastha Gas is 18, while that of Mahanagar Gas is 13. Both of them are in the same business as Adani Total Gas.

A month has passed since the Hindenburg report, Adani’s shares are still stuck in the locker circuit, know what is the price now

Adani’s shares ran like a rocket

Share price reflects market sentiment, but when a particular stock rises sharply, as was seen in the case of Adani shares amid the pandemic, alarm bells start ringing. In November 2022, VK ​​Vijayakumar, chief investment strategist at Geojit Financial Services, had also hinted at ‘stratospheric’ valuations. However, when contacted, a representative of Geojit Financial Services said that the firm does not track the Adani Group. Interestingly, Adani Total Gas, which has been stuck in the lower circuit ever since the report, is still trading at 156 times its earnings.

What is PE Ratio

PE ratio is also known as price to earnings ratio. It tells us how high the price of the company is compared to its earnings. In simple language, how cheap or how expensive a company is, it is known only by the PE Ratio of that company. It is known only after knowing.