Bulls make a case for book value

While price-earnings multiple is near all-time high, price-to-book value ratio is 45% lower than its peak

The bulls have now turned their attention away from corporate earnings and its derivative, the price-earnings (P/E) multiple, to valuations based on book value or net worth per share. While the P/E multiple of the market is near an all-time high, valuations still look reasonable on a price-to-book (P/B) value basis, say experts. 

The benchmark NSE Nifty50 Index is currently trading at 3.5 times, or 3.5x, its underlying book value (or net worth per share) of Rs 2,926. This compares favourably with the historical average P/B valuations of 3.5x. In the previous bull run, the index had peaked at around