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Anomalies in valuations

Stick to high-valuation blue chips or switch to low-valuation big stocks, or small caps?

Devangshu Datta 

Devangshu Datta

Sunil Singhania of Abakkus Asset Manager made an interesting point recently. Fast-moving consumer goods (FMCG) majors Hindustan Unilever and Nestlé have combined a profit of around Rs 7,600 crore and a joint market cap of around Rs 6 trillion. The entire steel, cement and metals sectors, with a combined profit of over Rs 74,000 crore, are available for roughly the same market value.

Singhania went further. He showed that even the best-performing 25 listed companies, with stable growth in revenues and profits have been disappointing. In the last 10 years, these companies have ...

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First Published: Sun, November 10 2019. 20:19 IST
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