Sensex remains expensive against world market

Trading at historical P/E average earning downgrade to continue as pressure on low growth remains

For 2012-13, domestic and foreign brokerages expect the net profit of Sensex companies to grow around 14 per cent, to Rs 222,512 crore. So, at the current market capitalisation of Sensex companies, the one-year forward P/E is just around 13.

The European and US markets are comparatively cheap, trading at a P/E of 12-13 times earnings for calendar year 2011 and eight to 13 times for CY11. However, the earnings growth for US and European markets are likely to be double-digit, marginally below ours. According to a Bloomberg estimate, the earnings of Dow Jones companies are likely to be up 11.1 per cent in CY12, compared to 14 per cent for the 30-scrip Sensex. The index-based companies in England, Germany and France are expected to show earnings growth of 11-12 per cent in CY12.

ESTIMATES FOR SENSEX COMPANIES
Name	Sales (Rs  crore)		Net profit (Rs  crore)
	FY 11-12	FY 12-13	FY 11-12	FY 12-13
Bajaj Auto	19751.47	22600.63	3152.8	3531.44
Bharti Airtel	71775.22	82483.76	4896.74	8133.2
BHEL	48481.66	49315.76	6462.33	6280.83
Cipla	7009.30	8022.72	1109.38	1339.09
Coal India	61743.62	67715.11	14658.40	16816.03
DLF	9545.13	10571.78	1438.23	1784.83
GAIL	39447.87	43662.90	3889.68	4107.76
HDFC	6060.90	7355.77	4020.37	4879.77
HDFC Bank	17448.92	21268.72	5157.95	6439.60
Hero MotoCorp	23187.23	26138.30	2386.11	2757.95
Hindalco	77579.57	80539.18	3100.16	3164.93
HUL	22752.47	25795.13	2698.59	3172.92
ICICI Bank	18078.79	21486.25	6365.50	7545.86
Infosys	34316.94	40234.47	8416.17	9843.22
ITC	24869.43	28735.17	5966.41	6808.99
JSPL	17257.85	19546.34	3989.73	4427.85
L & T	54040.38	61259.44	4240.50	4696.38
M & M	29891.70	34657.53	2666.44	2987.25
Maruti Suzuki	34821.80	42593.50	1508.28	2346.90
NTPC	61621.70	70797.24	8902.23	9724.55
ONGC	146602.30	162867.94	26887.29	28469.74
Reliance Ind	330858.54	327658.09	20712.11	21756.01
SBI	55552.24	62490.73	11437.92	14303.16
Sterlite Ind	39653.98	44617.93	5420.71	6153.16
Sun Pharma	7686.95	9015.70	2346.34	2706.71
Tata Motors	160261.79	181179.33	10600.79	11969.43
Tata Power	23556.35	27941.30