Valuation disparity broadens even as Sensex, Nifty hit all-time highs

Median P/E multiple of top 100 companies by market value is nearly 30 times their trailing 12-month earnings

The valuation differential in the market is widening as benchmark indices touch new highs. The median price-to-earnings multiple (P/E) of the top 100 companies by market value is nearly 30 times their trailing 12-month earnings. At the same time, that of the bottom 100 is less than nine times. 

Market players said the general weakness in the market, as well as the Securities and Exchange Board of India’s (Sebi’s) fund re-categorisation and reclassification norms, have led to disproportionate flows to the top 100 companies.

The battering of mid- and small-cap stocks, given their debt and corporate governance issues, has prompted investors to