Valuation Of NIFTY 50

Valuation Of NIFTY 50

Over the last two weeks, ย ๐—œ๐—ป๐—ฑ๐—ถ๐—ฎ๐—ป ๐˜€๐˜๐—ผ๐—ฐ๐—ธ ๐—บ๐—ฎ๐—ฟ๐—ธ๐—ฒ๐˜๐˜€ ๐—ต๐—ฎ๐˜ƒ๐—ฒ ๐—ฏ๐—ฒ๐—ฒ๐—ป ๐—ฟ๐—ฒ๐—ฑ, and many analysts attribute this correction to ๐ฉ๐จ๐ฅ๐ข๐ญ๐ข๐œ๐š๐ฅ ๐œ๐ซ๐ข๐ฌ๐ž๐ฌ ๐ฅ๐ข๐ค๐ž ๐‘๐ฎ๐ฌ๐ฌ๐ข๐š’๐ฌ ๐š๐ญ๐ญ๐ž๐ฆ๐ฉ๐ญ ๐ญ๐จ ๐ข๐ง๐ฏ๐š๐๐ž ๐”๐ค๐ซ๐š๐ข๐ง๐ž.

Thus, i ๐๐ž๐œ๐ข๐๐ž๐ ๐ญ๐จ ๐ฏ๐š๐ฅ๐ฎ๐ž ๐๐ˆ๐…๐“๐˜ ๐Ÿ“๐ŸŽ to check if this correction is due toย #macroeconomicย problems. If that is the case, it is an opportunity for me to invest money in stocks.

As of today morning, the ๐๐ˆ๐…๐“๐˜ ๐Ÿ“๐ŸŽ ๐ข๐ง๐๐ž๐ฑ ๐ฏ๐š๐ฅ๐ฎ๐ž = ๐Ÿ๐Ÿ•,๐Ÿ๐Ÿ—๐Ÿ.๐Ÿ๐Ÿ“

I looked at all the stocks in the NIFTY50, and i got the ๐—ฎ๐˜ƒ๐—ฒ๐—ฟ๐—ฎ๐—ด๐—ฒ ๐—ฅ๐—ข๐—˜ ๐—ณ๐—ผ๐—ฟ ๐˜๐—ต๐—ฒ๐˜€๐—ฒ ๐˜€๐˜๐—ผ๐—ฐ๐—ธ๐˜€ = ๐Ÿญ๐Ÿฑ.๐Ÿฒ๐Ÿฏ%


EPS = 777.90

Dividend Yield = 1.25%

Dividend Payout ratio = (Dividend Yield * Index value)/EPS = 27.63%

I assume that companies inย #nifty50ย engage in stock buybacks and pay dividends.

Thus i assume ๐——๐—ถ๐˜ƒ๐—ถ๐—ฑ๐—ฒ๐—ป๐—ฑ๐˜€+๐—ฆ๐˜๐—ผ๐—ฐ๐—ธ ๐—ฏ๐˜‚๐˜†๐—ฏ๐—ฎ๐—ฐ๐—ธ๐˜€ ๐—ฎ๐˜€ % ๐—ผ๐—ณ ๐—˜๐—ฃ๐—ฆ = ๐Ÿฏ๐Ÿฌ%

Last year’sย #eps growth was around 72%, which was a great year as companies posted impressive results after COVID. I assume the EPS growth for 2023 and 2024 as 35% and 30%, respectively.

When i factor the above inputs, ๐ˆ ๐ฏ๐š๐ฅ๐ฎ๐ž ๐ญ๐ก๐ž ๐๐ˆ๐…๐“๐˜ ๐Ÿ“๐ŸŽ ๐š๐ญ ๐Ÿ๐Ÿ“,๐Ÿ—๐Ÿ”๐ŸŽ.๐Ÿ’๐Ÿ‘ ๐ฌ๐ญ๐ข๐ฅ๐ฅ, ๐Ÿ•.๐Ÿ•๐Ÿ% ๐จ๐ฏ๐ž๐ซ๐ฏ๐š๐ฅ๐ฎ๐ž๐.

Thus, in my view, ๐—ก๐—œ๐—™๐—ง๐—ฌ ๐Ÿฑ๐Ÿฌ ๐—ถ๐˜€ ๐—ป๐—ผ๐˜ ๐˜‚๐—ป๐—ฑ๐—ฒ๐—ฟ๐˜ƒ๐—ฎ๐—น๐˜‚๐—ฒ๐—ฑ, and in the future, i assume that the index should trade around this figure.

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