Fundamental Outlook On Market

Image Source: capitalmind.in

The Sensex recently corrected from 30000 to 26500 down about 11.7%, The current Sensex EPS is at 1394 and The Price to Earnings Ratio Or P/E Ratio is at 19.01

Generally Sensex P/E is between 14-18 and anything above or below it is considered to be undervalued or overvalued.

Looking Things from a fundamental point, current global factors can affect the markets adversely, at the level of 24000-25000, the market will be fairly valued.

The growth of Sensex EPS is at 13-14% every year. At the current rate of growth and assuming that the valuation of Sensex won't have over-stretched, One can expect Sensex to trade in the range of 42500-47500 and in next 10 years the EPS Of Sensex at current growth will be around 5050, which means that at fail valuation Sensex Can trade in the Range of 75000-82500.


Note:  If the Earnings Pick-Up in coming quarters and if interest starts to come down, the markets have huge potential to grow at a better rate and offer a higher rate of return.

Image Source: thealphainvestor.wordpress.com